A Norwegian gambling company is facing a period of increased scrutiny after a Gambling and Foundations Authority (GFA) probe uncovered a number of legislation breaches that have led to the organisation hitting the company with a nearly half-a-million dollar fine.
Norway’s Norsk Tipping is the online sportsbook, lottery provider, and casino in question. The company was fined by the Norwegian GFA following an incident in March of 2024, in which the operator reportedly overpaid a player. The incident in question saw the player receive a payout of around $2.25 million (NOK25m) from a KongKasino game. This broke the state agency’s Money Gambling Act, which restricts the amount of money gambling companies can pay out to customers.
According to the Act, and the country’s Gambling Scheme Act, the player should not have received anything close to the multi million payout they ultimately collected. On the contrary, Norsk Tipping should have abided by the legislative limitations which state that players can’t receive more than $9,500 (NOK100,000) from casino game winnings. While many were quick to assume that the sanctions were due to anti-money-laundering regulations, the agency was quick to state that their concerns lay with player safety.
The director of the agency, Atle Hamar outlined why his department chose to act so swiftly and seriously, stating in a press release: “This is a big wrongful payment. There is a relatively high chance that the money could have gone to a player with a gambling problem or at risk of getting it.”
$2.25M Incident Not a Standalone Occurrence
Once the dust had settled on the initial furore surrounding the hefty fine, focus turned to how such an incident happened, the steps taken to resolve the breach, and the future developments to ensure that it was not repeated. In doing so, some concerning trends were uncovered that further reinforced the GFA stance in issuing such a large fine to one of the region’s leading operators.
It was established that the player who had received the $2.25 million payment had returned the majority of their winnings in line with the legislation. However, of more concern to the authorities was the revelation that Norsk Tipping had discovered the root cause of the problem in the form of a technical error with the KongKasino game, which allowed players to receive much higher payouts than should be possible if the correct procedure was followed.
In doing so, the operators ultimately discovered that the incorrect payment that had brought the ire of Norwegian authorities to their doorstep was in fact not an isolated incident. Instead, they were able to uncover a number of outgoing transactions that were of concern. This has led to them implementing extra security where they will check all prizes awarded over the threshold of $9,500 to ensure that legislation is strictly followed. It marks a significant jump down from their previous $4.5 million (NOK50m) limit, which alongside their other controls was labelled inadequate by authorities.
That is not to say that Norsk Tipping is fundamentally a company with poor security measures or unsafe practices. The Nordic countries largely follow similar models in which a monopoly controls the gambling offerings and the governments maintain a strict overseeing role and implement strict regulations on them. This in turn ensures a much safer environment but a more evident example of issues when they do occur. It’s a model that other countries are also looking to explore.
Nations Looking to Follow Model of Online Casinos in Norway
At a time where the liberalisation of the gambling industry appears to be in a state of uncertain flux, many formally highly liberal nations are looking to a Nordic model of regulation to create a more certain framework. In particular, the UK and Ireland are establishing much stricter regulations to combat what they see as a culture of problem gambling in their respective nations.
The Irish government announced on October 17 that their long-awaited Gambling Regulation Bill 2022 had officially passed both houses of the Oireachtas — the collective legislative government of the Republic of Ireland — and established the Gambling Regulatory Authority of Ireland (GRAI) that will oversee every level of legal gambling in the country. It follows years of discussions in parliament on how to improve the safety of Irish gambling and provide extra protection for young and vulnerable people in particular.
The need to protect players and the public at large is reflected in the response of Norway’s authorities to the legislative breach and its subsequent large fine — a move that proves that there is a clear focus on safe online casinos in Norway and the wider Norwegian casino market. In its evaluation of the incident, it identified that around 27% of players at the operator were at risk of gambling harm. This was a large deciding factor in the level of punishment meted out and their strict and firm response, along with the tightening of controls by Norsk Tipping.
In Ireland, the Economic and Research Institute estimates that around 1 in 30 adults suffer a gambling problem, underlining the legislative power thrown behind the recently-approved gambling bill. It is largely the same in its neighbour across the Irish Sea, where the United Kingdom government has established a white paper on gambling that outlines a number of gambling-related reforms that it expects to see implemented by the gaming industry, as well as others as diverse as sports and advertising. It’s clear to see that nations are taking these concerns seriously.
Potential for Regional Reform in Nordic Nations
While other nations in Europe are looking to countries like Norway, Denmark, and Sweden in an effort to establish a much more secure industry, there could be change afoot in those countries if Finland’s recent expansion of its gaming regulations is anything to go by. This could spell a more lenient approach to breaches of any regulatory framework established and perhaps less significant fines for companies like Norsk Tipping.
As it stands, in the Nordic nations, the governments hold all the power when it comes to their gaming industries. However, Finland has set 2027 as the year that it ends its government monopoly on gambling and opens the market up to the private sector, much like the rest of Europe. This would mean that the state, while retaining some of its own exclusive gambling products, would begin to offer both B2B and B2C licences to companies looking to enter its market.
With the Finnish draft gambling act setting the winds of change blowing, it appears likely that it will influence the markets in the nation’s immediate vicinity. With this, we would likely see a much more liberalised market than has been the norm in that part of Europe, allowing more freedom to operators and their offerings. Whether that will spell the end of major crackdowns on payment errors or an increase to allowable winnings for countries like Norway is yet to be seen.
