Norway-crypto

Is crypto a way out for Norwegian payment ban?

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Norway is cracking down on gambling. The country recently initiated a ban on several gambling companies, Bloomberg reports.

After warning 4 companies back in November 2018 and the other two earlier this month, Norway’s gambling authority now officially targeted these organizations. The officials say the gambling companies were practicing illegally on Norway’s territory. The government took issue with the fact that these companies were reportedly targeting Norwegian citizens specifically in order to get them to engage in the illegal practice.

The Norwegian government has since ordered the country’s banks to immediately cease operating the accounts linked to the companies. Transactions to and from the accounts are blocked.

The six companies named in the regulatory move are as follows: Betsson Group, Co-Gaming, L&L Europe Players, Gaming Innovation Group, Kindred Group, and Lucky Dino Gaming. Regardless of what Norway alleges, all six of these companies appear to hold valid EU operational licenses. This might give the move colors of a somewhat political statement.

Scandinavia and gambling

According to the article by Casinopånett.eu, Scandinavian countries famously discourage gambling practices. Norway too is a monopoly when it comes to the gambling business. Just a measly two companies are allowed to offer their services to the public within the country’s borders. Norsk Tipping and Norsk Rikstoto. The former operates sports betting and the casino business, while the latter specializes in race betting.

Recently Sweden’s government loosened its grip on the industry. At this point, nearly 70 companies in Sweden hold valid gambling licenses. The price to obtain the license is currently 75 000 USD. This money will buy you a five-year permit to practice online gambling and betting services within the country’s territory.  However, it’s still unclear what Norway will do. It’s unknown if the country will react at all. The possibility exists that Norway will stay on the course it has chosen.

Bans create a breeding ground for illegal activity

Due to their practices in regards to the gambling business, Scandinavian countries and Norway, in particular, have faced widespread criticism. Experts say establishing monopolies or straight up restricting access to high-demand activities like gambling creates a supply vacuum in these industries. Then the vacuum promptly fills with illegal companies. This practice also encourages government corruption. In some countries, high-ranking officials involve themselves in these ventures. Sometimes they provide protection to these companies. At other times the involvement is more direct.

These companies operate from both inside these countries and outside. They don’t pay taxes, they prey on citizens by abusing their finances or information. Websites like that usually change their addresses every so often. This helps them stay under the radar of the authorities.  Situations like that exist all around the World. Russia is another example of a gambling ban being an ineffective measure of gambling addiction control. Gambling is Russia isn’t a monopoly like Norway, it’s illegal. Authorities in the country have been powerless in their fight against internet casinos that aggressively advertise to the local population. A lot of these ads in Russia come from TV show and movie streaming websites. The latest regulatory measure will see Russia expand The Internet censorship degree. The decision likely didn’t stem directly from efforts to discourage gambling. However, it’s safe to assume that it was a factor.

What about companies with transparent business practices?

Obviously, not all such companies want to illegally take advantage of the population. Not necessarily. As mentioned, all six companies Norway banned are licensed providers. This means that apart from contradicting Norway’s regulation, they weren’t directly scamming the customers they attracted.

People want to gamble. And Norway’s move will force these companies to make a decision. They can abandon the market they spent time and money cultivating, or they can turn to cryptocurrencies. Crypto can potentially provide them with the means to continue their operations in a manner similar to Russia’s.

How will Norway respond if gambling turns to Crypto?

If the gambling business in the country adopts cryptocurrency, Norway’s authorities will face two choices: They can restrict cryptocurrency trade for individuals or they can restrict/censor the Internet.  Norway imposed reporting laws to virtual currency providers last year. Therefore, it’s not outlandish to think that they might expand upon that regulation. So far, an average Norwegian citizen isn’t obligated to comply with the regulation imposed in order to stop money laundering. It’s unknown if that will be the case for long. If Norway’s regulator chooses to be adamant about the path it took, events might unfold in an interesting but unpredictable manner.

It’s important to say that even if the companies do turn to cryptocurrency based transactions as their means of exchange, they will likely still lose some customers. We don’t know how that decision might impact their licenses. It’s hard to say whether the companies will take that risk.

Giorgi is a news reporter and financial analyst at www.forexnewsnow.com He has 3 years of experience in analyzing the financial markets of Forex and cryptocurrencies. He also likes making hidden jokes in his articles.