Norway to supervise nine banks to restrict payment transactions with illegal operators

The Norwegian Lottery Authority (Lotteritilsynet) has informed nine banks about the supervision of compliance with the "payment intermediary ban," which restricts banks from processing transactions with unlicensed operators.

Section 5 of the Gambling Act states it is prohibited to mediate payment transactions for deposits to and payouts from gambling operators that do not have the necessary license. "The Norwegian Lottery Authority has the right to make decisions and order the banks to reject transactions to and from specific account numbers and companies," the regulator noted in a statement.

Rannveig Gram Skår, lawyer and senior adviser in the Norwegian Lottery Authority, said: “For a long time, we have focused on dialogue with Norwegian banks and financial institutions. For the first time, we have now chosen to open a more thorough inspection of compliance.”

She added: “We know that the payment intermediary ban is an important tool to protect the Norwegian sole proprietorship model. The purpose of the model is to prevent gambling problems and other negative consequences of gambling.”

The ban aims to reduce problem gambling in the country. The Norwegian Lottery Authority is taking this decision in order to ensure gambling transactions are supervised and to obtain knowledge to ensure that the ban is effectively maintained.

Lotteritilsynet did not reveal the banks' identities and did not say whether they breached the ban. The banks must present internal processes for compliance with the ban and information on the measures in place to stop transactions with unlicensed sites.

A population survey from this spring revealed that stricter requirements for enforcing the ban on payment intermediaries are one of the reasons that can explain the decline in problem gambling. This is because the ban makes it more difficult to participate in gambling with foreign providers, the regulator pointed out.

Earlier this month, the European Gaming and Betting Association (EGBA) urged Norway to switch to a licensing model. The association said that Norway should follow the example of other European markets, like neighboring Sweden and Finland, and switch to a licensing system, in opposition to the current state gambling monopoly system. 

EGBA secretary-general Maarten Haijer noted that this would help combat issues such as consumers gambling with unlicensed sites. Currently, Lottery Norsk Tipping has the rights to online casino gaming and sports betting in Norway, while Norsk Rikstoto operates horse racing.