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Norwegians Closer to "Nordic UIGEA"

September 26, 2008 (InfoPowa News) — The Norwegian government initiative to disrupt online gambling financial transactions with legislation stopping financial houses from processing such arrangements moved a step closer to implementation this week with a proposal sent to Parliament for a vote.

If the proposal is accepted by Parliament, the Minister for Culture and Church Affairs Trond Giske will have achieved something of a Nordic equivalent to the highly controversial American Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006. It is understood that Giske's proposal applies to payment processing of online gambling transactions, effectively criminalizing any Norwegian financial institution that processes such payments. Norwegian law prohibits the marketing, promotion, or facilitation of Internet gambling services, and the amendment seeks to extend that activity to include payment processing.

Giske will be remembered for his 2006 actions to ban all land slot machines except those controlled by the state monopoly Norske Tipping. Giske and his officials have had online gambling in their sights for some time, and last year appeared to be aiming for an amendment to existing gambling legislation so that payment processors fall within it rather than an entirely new law.

Under the guise of a "clarification", the proposal went forward for public comment until mid-February 2008, after which it was subjected to legal drafting by Giske's officials prior to being placed before Parliament. At the time Giske was said to be aiming for Parliamentary approval in the summer. Since then there have been demands from the anti-online gambling lobby that the proposal should be widened to include ISP blocking and other draconian moves that have failed elsewhere in Europe.

The European Commission is already keeping a close eye on Norwegian developments. While Norway is not a full member of the European Union, it is part of the E.U. market and EFTA, located in the European Economic Area. Senior law practitioners in the country have reportedly cautioned that the proposed ban could result in European Court of Justice proceedings.
Online poker in particular is a popular pastime among Norwegian and indeed Scandinavian players, many of whom have shown a world-class capability in the game by winning tournaments and large prize purses at events both online and around the world.

The "justification" for a ban of financial transactions with online gambling companies will probably be the protection of Norwegian problem gamblers, but there can be little doubt that the state gambling monopoly Norske Tipping is being protected.

Studies late last year showed that up to 71,000 Norwegians — 1.5 percent of the population — have a serious gambling problem and 133,000 are considered to be in the risk zone. The average problem gambler in Norway was spending €5,000 a year on gaming at that point. The Norwegian Gambling Commission said earlier this year that an estimated 244,000 Norwegians gambled online in 2007, spending €961 million. The Norwegian Lotto was the preferred online game by 48 percent of respondents, followed by online poker at 28 percent, sports betting at 27 percent, and casino games at 7 percent.