A lot has been said and a lot will be said about the potential of the Scandinavian region to become a successful gambling destination and a place where online gambling, which has already established itself as a big thing within the overall industry, is expected to thrive. However, of all four countries – Denmark, Finland, Norway, and Sweden, only Denmark seems to have tackled the issues that have prevented it from developing and growing its iGaming market and has, indeed, been posting excellent results since liberalizing its online casino regulations in 2012.
As for the other three countries of the Scandinavian bundle, they are still holding the monopoly system dear. In other words, iGaming services are still legally provided by state-owned organizations. The EU has put quite a lot of pressure on Finland and Sweden to create online gambling legislative frameworks, ones that would allow private operators to apply for gaming licenses and ones that would tackle all pending issues related to the current state of affairs in the two countries.
But why is the Scandinavian region believed to be a place where online gambling will most certainly be a profitable industry? Three main points may be listed as possible answers to this question.
+ In the first place, the region is the birthplace of some of Europe’s biggest providers of gaming software and gambling operators alike, with NetEnt, Cherry AB, Betsson to name a few.
+ Another important thing to take into account is the fact that the gambling spending rates per capita are among the highest in Europe. For instance, gambling customers from Sweden annually spend an average €237 per individual.
+ Last but not least, the Scandinavian region is home to extremely tech-savvy people that are open to new and innovative technology and certainly know how to implement it in their everyday life. Residents of Nordic countries are known to be among the heaviest Internet and mobile users not only in Europe but on a global scale. Here it is also important to note that modern technology and innovations have become an indispensable part of gambling, particularly its online segment. With all that said, online gambling provided by privately-held operators is really expected to be welcomed quite well by residents and to, indeed, turn into a profitable business.
What prevents this from happening is the current regulatory situation in most of the Nordic countries. As mentioned above, legislators from Finland, Norway, and Sweden are still not sure whether removing the monopoly system would be a good thing for their countries. There is pressure from the European Union and following Denmark’s lead in liberalizing the licensing process for international iGaming operators has been among the legislative topics to be discussed over the past several years. It all shows that a lot is to be done and the markets in the above-mentioned three countries may be opened for more diverse foreign operations at some point in future.
Although Scandinavian countries are often considered as one inseparable whole, mainly due to the obvious language and cultural similarities, the four countries have their particularities and in order to understand the overall online gambling situation in the region, it is a good idea to have some understanding of what is happening in each of the four jurisdictions.
Here is a brief overview of the online gambling industry within Denmark, Finland, Norway, and Sweden and the measures local legislators and regulators have been taking in order to tackle the issues that have arisen or may arise in relation to the introduction of more liberal yet effective and efficient online gaming legislative frameworks.
Denmark
Since breaking the state-held monopoly over gambling operations in early 2012, Denmark has been pointed as a good example of what comes from the implementation of a more liberal yet effective enough regulatory system.
Following the ever-increasing pressure from the EU and given the fact that a number of online gambling sites had already offered online casino options to residents of the country, Danish authorities decided that something needed to be done, in order for a portion of the money generated by those sites to enter the country’s coffers.
Denmark’s most recent Gambling Act, a 19-page document providing comprehensive explanations of how gambling operations, online ones included, should be conducted within the country’s borders, came into effect in January 2012. After what has been called the liberalization of the country’s gambling industry, privately-held international operators were allowed to apply for a license from Spillemyndigheden, or the country’s gambling regulator, and to provide their services to Danish gambling customers.
Breaking the state-owned monopoly and providing the opportunity for more operators to offer their products has resulted in a considerable increase in the gross gaming revenue generated. It could be seen in the table below how much exactly proceeds from online betting and casino options have increased over the three years between January 2012 and December 2015.
Gross Gaming Revenue (DKK Million)
| GGR | Betting | Online casino | Total | |
|---|---|---|---|---|
| Games with commission | ||||
| Q1 2012 | 285 | 185 | 55 | 470 |
| Q2 2012 | 265 | 235 | 55 | 500 |
| Q3 2012 | 270 | 215 | 55 | 485 |
| Q4 2012 | 355 | 235 | 55 | 590 |
| Total 2012 | 1,175 | 870 | 220 | 2,045 |
| Q1 2013 | 370 | 240 | 55 | 610 |
| Q2 2013 | 335 | 250 | 50 | 585 |
| Q3 2013 | 300 | 240 | 45 | 540 |
| Q4 2013 | 380 | 260 | 45 | 640 |
| Total 2013 | 1,385 | 990 | 195 | 2,375 |
| Q1 2014 | 415 | 255 | 50 | 670 |
| Q2 2014 | 445 | 270 | 40 | 715 |
| Q3 2014 | 495 | 265 | 40 | 760 |
| Q4 2014 | 425 | 285 | 40 | 750 |
| Total 2014 | 1,78 | 1,075 | 170 | 2,895 |
| Q1 2015 | 440 | 310 | 45 | 750 |
| Q2 2015 | 470 | 335 | 40 | 805 |
| Q3 2015 | 560 | 330 | 40 | 890 |
| Q4 2015 | 560 | 350 | 40 | 910 |
| Total 2015 | 2,03 | 1,325 | 165 | 3,355 |
*Table taken from Spillemyndigheden
Denmark has turned into an example for the positive effects a balanced regulatory framework may have on the overall gambling industry. Although providing strict and comprehensive provisions for the licensing process through which all interested operators should pass, the country has regulated its gaming market in a relaxed and welcoming manner that really makes it a desirable destination for operators.
Finland
Finland is among the Scandinavian countries that still holds the monopoly system dear and has been heavily scolded by the European Union for its unwillingness to liberalize its gambling market. Up until recently, three organizations were in charge of the country’s gambling operations – both online and land-based, with those being Raha-automaattiyhdistys or else known as RAY, Fintoto Oy, Veikkaus Oy. The first is known to be in charge of casino operations, the latter manages pari-mutuel betting, and the third regulates the national lottery industry.
Late last year, the Finnish government announced that the three organizations would be merged into one so as to ensure the more effective operation of gambling options provided within the country. The whole merger is expected to be completed by the end of 2016 or early in 2017.
Country officials also seem to be determined to prevent any other operators apart from the state-run organizations from offering their gambling products and services within Finland’s borders. Here it is also important to note that despite criticizing the country and its gambling regulations, the EU eventually declared that these regulations did not contradict the overall European gambling framework.
Norway
Gambling options in Norway are provided by two state-owned gaming companies – Norsk Rikstoto and Norsk Tipping. Products and services provided by any other entity are considered illegal. It could be said that the country’s gambling regulations are particularly stringent and the government has explained its decision to impose such regulations with its determination to protect the vulnerable part of the population from falling victim to gambling addiction.
The case with Norway is a bit different from the rest of the countries within the Scandinavian region as it is not an EU member state. In other words, the country cannot be forced by European legislators to introduce measures compliant with the overall gambling framework on the continent and international operators cannot complain to EU regulators about Norway preventing them from providing online gambling services within its borders.
Sweden
Of all three Scandinavian countries that have not opened their online gambling markets to other operators, Sweden seems to be the closest to doing this. Yet, this may not happen too soon.
Currently, Svenska Spel, a state-run company, is the only entity that is authorized to issue gambling licenses. Here it is also important to note that such licenses are not granted to privately-owned gambling operators. Svenska Spel has been holding the country’s gambling monopoly for years now and officials have pointed out that in this way, they want to secure public order for residents, to protect them from gambling addiction, and to promote responsible gambling.
However, Sweden has been facing quite a lot of pressure from the EU about the way it provides online gambling options. According to EU officials, the manner in which such options are provided is “inconsistent with EU law.”
Swedish lawmakers have recently said that measures will be taken towards the introduction of a more liberal gambling regime and that the market is expected to be opened for new operators some time in 2018. Last fall, an inquiry about the current state of the country’s online gaming industry and the possible effects from the market’s liberalization has been initiated. The results from the said study are expected to be announced towards the end of 2016 or early in 2017. If everything goes as planned, Sweden is likely to present an online gambling bill late in 2017.
Conclusion
The Scandinavian online gaming market is indisputably one with quite a lot of potential and has long been eyed by international remote gambling operators. It cannot be said with certainty whether and when Finland, Norway, and Sweden will eventually relax their gambling regulations. However, what is known for a fact is that all Nordic countries discussed in this article have everything needed to enjoy thriving iGaming markets that will likely welcome and assimilate innovations more quickly than other parts of the world.
