Lessons on internet gambling liberalization from the Nordics BY NICOLE MACEDO
SCANDINAVIAN SUCCESS
Lessons on internet gambling liberalization from the Nordics BY NICOLE MACEDO
The Nordics have long presented a shining beacon of pragmatic and well-executed social and liberal policies . Think quality of life , gender pay and parental leave equality , work / life balance and better social benefits for everyone .
But the Northern Europe region ’ s approach to liberalizing its online gambling markets has been anything but pragmatic . Across Sweden , Denmark , Norway and Finland , a longstanding monopoly model has historically been in place , giving the state-owned operator exclusivity over lottery , horse racing and land-based gaming machines .
Sure , this model worked before the widespread adoption of the internet , but once gambling moved online , private operators started entering these gray markets to provide a service that the monopolies weren ’ t equipped , or competitive enough , to provide .
This went on in the background for years , until in 2012 Denmark became the first Nordic country to open its online gambling market , establishing a licensing system to encourage competition and protective measures for players . Overall , the launch of the open market was a success , and to this day , Denmark remains the Nordic country with the highest rate of channelization at 90 percent , meaning that ’ s how many players are using licensed operators versus illegal ones .
The Secret to High Channelization
When looking at channelization , Denmark is widely used today as a leading example of a successful open market . Morten Ronde , CEO for the Danish online gambling trade body Spillebranchen , says it ’ s the Danish regulator ’ s careful use of data on player behaviors and operator performance that has helped it to maintain a high rate of channelization .
“ One thing they have done really well is they use data a lot ,” Ronde says . “ From the beginning , a system was implemented where all the licensed operators needed to deliver transactional data to the regulator so they could monitor products and tax payments .
“ It really enables them to investigate how the market is reacting to various measures or changes .”
A notable example was during the Covid 19 pandemic , when neighboring Sweden hit the sector with mandatory online casino limits to ensure players , who were locked down at home with little to do , did not overspend and overuse gambling apps . From July 2 , 2020 , players were also required to set time limits . These measures were in place until November 2020 .
Meanwhile , Denmark ’ s regulator ( Spillemyndigheden ) saw from its tracking of player behaviors that gamblers weren ’ t drastically increasing their playing time , despite being stuck in a lockdown .
“ That prevented the government from intervening and placing similar restrictions on players like they did in Sweden where they were only predicting there was going to be a problem ,” Ronde adds .
As for channelization , Ronde believes the unwavering rate in Denmark is in part due to the pragmatic regulations in place . “ I think it ’ s been the same for the last five or six years ,” he adds . European peers like Sweden , the Netherlands and the U . K . face a growing black-market problem as new regulations to check player affordability , restrict gambling ads and enforce deposit limits are brought into action , and players are increasingly turning to illegal operators to avoid these new friction points .
But Denmark has largely maintained its original regulations . Ronde says a discussion around restricting gambling ads has rumbled on in Par-
14 Global Gaming Business NOVEMBER 2024