Version: 15012003
Editor: Franka Pals
Publisher: Novamedia
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The lottery act (Word-document).
A thousand years ago the Norse, Swedes and Danes frequently traveled, disguised as Vikings, far from home on raiding or trading expeditions, colonizing Iceland and even reaching the Americas. They also fought each other and allied with each other over the centuries to define and redefine the nations of Scandinavia. Now we consider as the Scandic countries: Norway, Finland, Sweden and Denmark.
The 'Scandinavian Gambling Files,' a five parts series, will provide information on the operators and the main supporting companies of the North European countries: Norway, Finland (including Arland), Sweden, Denmark and Iceland.
Gambling in Scandinavia is a favorite pastime. As of December 31, 1999 the four above mentioned Scandinavian countries are present on the list of top seven countries in terms of average amount wagered per person per year on European lotteries:
| Population: | 4,525,000 (1 January 2002) |
|---|---|
| Age Structure | Age structure: 0-14 years: 20% (male 464,789; female 439,117) |
| Currency: | Norwegian kroner, NOK |
| GPD | year 2001: 1,510,866 million NOK purchasing power parity – $138.7 billion (2001 est.) GDP – real growth rate: 1.3% (2001 est.) GDP – per capita: purchasing power parity – $30,800 (2001 est.) (Statistics Norway) |
| Internet: | Internet Service Providers (ISPs): 13 (2000) |
| Telecom | Telephone main lines – 2.735 million |
Website: www.lotteritilsynet.no
The Norwegian Gaming Board (Lotteritilsynet) was established on January 1st 2001 and took over many functions formerly shared between 54 different police districts nationwide and the Ministry of Justice. The Gaming Board during 2002 employed 49 employees including a new mobile control unit and a section controlling Norsk Tipping. The Norwegian Gaming Board consists of three sections: fully updated, the technical department counts 18 persons including the control unit. The judicial section has reached the planed seven legal consultants, while the rest of the staff will have different administrative functions. Fees from the gambling industry finance the Norwegian Gaming Board, which is placed under The Ministry of Culture.
Besides being responsible for control and supervision of private and public gambling, the Gaming Board also is a directorate with responsability to evaluate legislation and give advice to the authorities about gambling issues.
All lotteries in Norway give a percentage of income to humanitarian or volunteer organisations, and there are aproximatly 5000 small and large organisations gaining money from national lotteries and gaming.
The turnover in the legal Norwegian gaming industry, passed 22 billion Norwegian Krone (aprox 2,5 billion US Dollars) in the year 2001. In addition in 2001 Norwegians spent aproximately 600 million Krone on Internet gaming worldwide.
Internet gaming is in general forbidden in Norway, but three organisations have been given permission to test time limited gaming in a smaller scale on the Internet, and the first one started in May 2001.
Around 50 percent of the turnover comes from gambling in the state owned companies Norsk Tipping and Norsk Rikstoto organizing gaming on among others horse racing, odds gaming, sports betting and lotteries.
Norway also have relatively many slot machines compared to the population of 4,5 million inhabitants. Aproximatly 21.000 slot machines are in use nation wide. The turnover on the slot machines, was estimated to 8,4 billion NOL in 2001.
The Norwegian government wants to establish a monopoly in the national gaming machine market.
The Norwegian Ministry of Cultural and Church Affairs has proposed amendments to The Sportsbetting Act of 28th August 1992 no. 103 and The Lottery Act of 24th February 1995 no. 11.
It has been proposed that regulations regarding gaming machines with prizes be removed from The Lottery Act, and the right to operate such machines be established as a monopoly for Norsk Tipping AS pursuant to The Sportsbetting Act.
The proposal implies that revenues to organisations promoting humanitarian or social-benificial causes be secured through incorporation as recipients of revenues from Norsk Tipping AS along side sport and culture, and that public authorities be responsible for the distribution of revenues.
The proposal's planned implementation is 1st January 2004 with a transitional period until 31st December 2005, whereby existing machines will gradually be removed from the market as the time limited licences run out.
There are apox 21,000 gaming machines in the Norwegian market, but the governement wants to reduce the number of machines to 10,000.
Gaining control of the slot machine market, has been an important task for The Norwegian Gaming Board so far. During year 2001 all slot machines were registered in a new data base established by The Norwegian Gaming Board. This data base, "Lotteri–registeret", is a very important tool for both The Gaming Board and the police. Within months, the whole administration of the gaming industry took place in the new data base which will gives the authorities new information and better control with all aspects of gaming in Norway.
Within year 2004, all the slot machines in the country are expected to be controlled on the net from The Norwegian Gaming Board.
From January 1st 2001, the age limit for playing slot machines, was raised to 18 years in Norway. The owner or proprietor of the location is responsible for controlling the age limit, but there is so far no sanctions connected with breaking the law. A survey made in 1999, concludes that 1,0 percent of Norwegian youth between 12 and 18 years have a pathological attitude towards gaming and lotteries.
The Gaming Board has financed a broad survey to uncover the amount of gambling addiction in the Norwegian population. The survey cost three million Nkr and was started in the automn of 2001, and the result is expected to be ready by June 2003.
Norway will in the future drop taxation on lottery prizes won in other countries. The change in taxation is decided by the Norwegian government after a protest from the EFTAS Surveillance Authority. EFTA means the Norwegian taxation of lottery prixes is in breach om the EEA fundamental freedom on provision of service.
The Gaming Board has given a one year temporary licence to arrange a SMS lottery on mobile telephones. Only persons from 18 years of age are allowed to participate in the lottery, which is pre drawn. The licence is given for one year to ten volunteer or/and humanitarian organisations.
There are also given three temporary licences to arrange Internet gaming in Norway. The licenses are given to
Internet gaming is growing rapidly in Norway, but The Gaming Board so far lacks exact information about the turnover. Norsk Tipping estimated that Norwegians in the year 2000 spent 400 million Nkr on Internet gaming – increasing from an estimated 150 million the year before.
The Norwegian Gaming Board is closely watching Norwegian owned companies running games via servers in other countries, among others Great Britain.
A.o. CasinoLux ( www.casinolux.com), operating in 17 languages, is targeting the Norwegian casino players and William Hill Sportsbook (www.ws1.willhill.com/iibsnw/ sportsbook.asp) is not only targeting the Norwegian gaming society in the Norwegian language, but above that one may bet on results of Norwegian football matches.
William Hill, founded in 1934, is universally recognized as one of the world's leading bookmakers. They have 65 years experience of offering betting services. Currently they operate over 1,500 licensed betting offices in the U.K. and they have over 300,000 telephone clients worldwide, making them the world's largest telephone betting organization. According to William Hill, they operate the fastest growing Internet gambling site of any U.K.-based betting company.
The Norwegian Government has demanded a complete evaluation of all kinds of gaming and lotteries in the country. The work led forward to a political treatment of the existing and the future gaming industry.
In March 2001 the Norwegian Ministry of Cultural Affairs set up a Specialist Committee to report on a number of aspects relating to the current and future market for money games in Norway. Among other things, the committee was asked to consider how Norway should respond to the technological developments and foreign competition in the gaming market, and to present their recommendations.
The Specialist Committee was also asked to assess which good causes should be worthy of future lottery support in Norway, and to analyse the revenue taken from Norwegian money games over the last decade in order to establish any changes experienced by state-run games as well as private lotteries.
The report entitled "Norwegian money games in a digital future" was submitted to the Ministry of Cultural Affairs on 3rd December 2001. Below is a summary of the Specialist Committee's conclusions and recommendations.
The Specialist Committee has carried out an extensive analysis of both the private and state-run sectors of gambling Norway, and is now in a position to present new figures as well as summarize the trends found within the industry over the last decade. These are some of the committee's findings:
The technological development is in the process of introducing new methods of distribution for games and lotteries. This represents a challenge for the government, in terms of licensing as well as regulation. Consequently, the Specialist Committee has drawn the following conclusions:
Games should therefore be subject to controls coordinated by the Criminal Investigation Department/ the National Authority for Investigation and Prosecution of Economic and Environmental Crime.
Competition from foreign games and lotteries is increasing considerably. In order to respond to this competition in the Norwegian games market, the Specialist Committee makes the following recommendations:
In order to gain access to the lottery market, associations and societies currently need to have an objects clause which can be described as either charitable or humanitarian. This allows for a high degree of discretion, and in order to clarify the rules for access to the lottery market in the future, the Specialist Committee has submitted the following recommendations:
The Specialist Committee was chaired by Director Atle Hamar of the Norwegian Gaming Board (Lotteritilsynet).
Other committee members were: Jon Langballe (10H), Jonny Haugseth (Norsk Rikstoto), Jon Olrud (Norsk Tipping), Anne-Kari Holm (Health and Rehabilitation), Bernt G. Apeland (SUNHA), Ivar Egeberg (the Norwegian Sports Federation) and Bjørn Tore Østeraas (FRISAM).
In 2001 the turnover in the Norwegian gaming and lotteries market amounted to NOK 22.4 billion. Of this gross turnover, players collected NOK 13.9 billion in prize money.
This left an expenditure of NOK 8.5 billion to be distributed among the market participants, i.e. operators, entrepreneurs, site owners, agents, as well as associations and organisations.
3.4.2 Key figures on the gaming market in Norway
| Year 2001 | NOK (Mln.) | EUR (1) (Mln.) |
|---|---|---|
| Gross turnover (total wagered) (2) | 22,411 | 2,784 |
| Prizes | 13,891 | 1,726 |
| Net turnover (expenditure/loss) | 8,520 | 1,058 |
| Amount_wagered | Expenditure | |||
|---|---|---|---|---|
| Year 2001 | NOK | EUR | NOK | EUR |
| Per capita (3) | 4,965 | 617 | 1,887 | 234 |
| Per capita, 15 and older | 6,209 | 771 | 2,360 | 293 |
| Per household (4) | 11,420 | 1,419 | 4,341 | 539 |
| % of disposable income (5) | 3.32% | 1.26% | ||
On average, each Norwegian citizen (young or old) wagered NOK 4,965 in 2001.
After deduction of prizes, each citizen spent NOK 1,887. This amounts to 1.26 % of the disposable income per household.
Turnover in NOK million in 2001
Norwegians spent the largest amounts on gaming machines, i.e. nearly 9 billion NOK.6 7 In addition, they spent nearly 7.9 billion NOK on games provided by Norsk Tipping, and 0.75 billion on Extralotteriet, also operated by Norsk Tipping. Norwegians spent approximately 2.6 billion on horses through Norsk Rikstoto.
In addition to gaming machines, bingo and lotteries make up the private sector of the market. Bingo had a turnover of some 1.6 billion NOK, with entrepreneur bingo accounting for the major portion at slightly more than 1.3 billion. Also included here are side games (electronic8 and paper). Non–entrepreneur bingo is estimated at nearly 0.3 billion NOK.
Among the lotteries, the nationals have the highest turnover at nearly 0.5 billion9. For the other lotteries the turnover is estimated for NOK 0.1 billion.
*Annual statistics report from The Norwegian Gaming Board
lotteries and sports betting
Key figures:
Beneficiaries: sports, culture and research
Jurisdiction: Norway
Lotto is by far the most popular of Norsk Tipping's offerings. The numbers game had a turnover of NOK 1,830 million in the first half of 2002, 28% of Norsk Tipping's total volume. And those numbers represent a 15.3% increase from the year before.
The average Norwegian lotto player is 49 years old. On average 1.1 Norwegians buy a lotto coupon each week, and it is the sum of small bets from such a wide base that creates the nation's enormous betting tab.
While Lotto is the clear favorite, betting in general is popular enough to propel the Norwegian National Lottery Norsk Tipping to number five of the world's state gambling companies.
Lotto is nearly a regional obsession with Finland and Denmark also in the top ten, with Sweden a notable exception down in 68th place. According to a local media report statistics from Swedish Gaming show that Norwegians spend more money on lotto than any other country, having de–throned Malta for this honor.
Oddsbetting was introduced to the Norwe–gian people by Norsk Tipping AS in 1994, just before the Lillehammer Winter Olym–pics. And, after a great increase in sales during the Salt Lake City games, it's proven that Norsk Tipping has found its way onto a hot, new track.
During the recent Winter Olympics the Oddsbetting on sports has steadily in–creased. The public interest in upcoming events rose accordingly to the number of Norwegian medal winners. The great interest taken nationally in the different contests with Norwegian medal aspirations seems to be a trigger for eager sports enthu–siasts to also participate in Oddsbetting. It also brought excitement into events without Norwegian favourites. To top the excite–ment when watching the events unfold on live television, the possibility to place a bet on your personal favourite athlete or team has become a hit.
Norsk Tipping provides players with three options for Oddsbetting. The most popular alternative by far is Longlistodds, a game that allows you to bet on the outcome of a maximum of ten matches, out of a list of a hundred. There is also Resultsodds, where you have the possibility to bet on the score in a single match. The third option called Winnerodds, is synonymous with the game that has provided the Norwegian people with a great share of extra excitement during the recent Olympics. The player activity around this particular game in–creased fourteen times during the Salt Lake City Olympics. Alongside with this rather dramatic increase in sales, the introduction of single and double Oddsbetting in Decem–ber 2001 realised a greater share of prize money to the participants. After the Olym–pics Norsk Tipping operates with 68% disburse. Since the introduction of singles and doubles in December 2001, the sales in regard of Oddsbetting as a whole, has been doubled.
Commercials on national television at focusing on making somehow uninteresting contests worth seeing by placing bets in advance have made its point. Large interna–tional championships draw attention away from national sports events and remove focus from – or even stop – ongoing leagues and series. Making all kinds of sports events viewable for the majority of the people is also of a great benefit to the broadcasting media. Increasing the interest will upper the ratings. Games betting on more exotic contests like for instance ski -jumping and biathlon, has proven to be of great interest as well.
In June 2002 the Norwegian National Lottery Norsk Tipping has launched its wide range of games on the Internet. From May 21, Norwegian players are enabled to register their sports and lottery coupons directly from their own computer. By this strategic move the Norwegian National Lottery aims to meet with customer demand on freedom of choice and digital entertain–ment. Simultaneously, the Norwegian National Lottery, Buypass and Europay Norway introduce a uniquely new card, Norsk Tipping MasterCard. This card provides secure payment and identification on the Internet and may be used on all MasterCard locations worldwide.
By the use of his own computer, an Inter–net-connection, a smartcard and a smart–card reader, the customer can play the games from his own home. To become a digital player he registers on the Norwegian National Lottery's homepage on www.norsk-tipping.no and then receives the card and the card reader.
As an Internet customer at the Norwegian National Lottery, the player can play when it suits him, on a simple and secure manner by the use of Smartcard technology. The solution / platform is developed by Buypass AS, which is owned by the Norwegian National Lottery and Norway Post, each with a 50 percent. The Smartcard contains a qualified electronic ID code from ZebSign AS for secure electronic identification and a Mondex electronic valet for cash payment of gaming. The customer can choose Smartcards with or without MasterCard. The Smartcard with MasterCard can be used on any MasterCard location all around the world. The Smartcard is also a regular player-card and can be used to play at any of the retailers when this suits them best.
Until 2001, there were hardly any regula–tions on slot machines in Norway. Young and old played in 2000 for approximately NOK 9.1 billion, which should be 150 NOK million more than 1999. However, exact statistics do not exist. The Norwegian gaming market is characterized by a large number of gaming machines per capita (higher than any other nation in Europe): 19,000 for a population of 4,524,000 which makes Norway amongst the more liberal countries on this area. To give an example, to which extent, we can compare with the neighbor Sweden, which has 7,500 slot machines and a population of 8.9 million.
It makes gaming machines in Norway the largest segment by a sizable margin, with a turnover of NOK 850 million more than Norsk Tipping's games and a market share of around 40 percent in 2000.
Despite gambling was never meant to be beneficial to others than charitable organi–zations, a large amount of the profit gener–ated from these machines falls into the pocket of private investors. Despite the liberal regulation there has been established several violations on the premises of setting up slot machines. It's also proven difficult to maintain the age limit of eighteen years. These circumstances evidently have led to an increase of problem gambling.
Due to the situation, the government suggested in October 2002 that Norsk Tipping is given the exclusive right to run VLT machines in Norway. Norsk Tipping can contribute to reduce the number of machines from the existing 19,000 down to 10,000 without decreasing the amount of money given to benevolent organizations. One of the reasons for that is the fact that Norsk Tipping will run the VLTs on a non–profit basis. They can also see to it that the machines are removed from uncontrollable public areas into restricted areas, so that the set age limit is maintained. New and less aggressive VLTs will replace the existing slot machines. These will be specially designed to fit the standard required of the government and Norsk Tipping.
The new machines will be network-operated with total control of the cash flow and how the machines are functioning. This will provide the government with better condi–tions for proper political control of the development of regulations.
If the proposition passes Parliament, Norsk Tipping will gradually take over the market from January 1st 2004 and have total market control by January 1st 2006. In the transitional period from 2004 until 2006 the charitable organizations, which depends on their income from slot machines, will be compensated their loss with other govern–ment funds.
4.1.5 Instant Games
The scratch cards sales is slowing down. This is confirmed both by trends in Norsk Tipping's Flax game and other games in the market. Overall turnover decreased ap–proximately 10 percent.
For other games like bingo, various lotteries and telemarket games, the situation is relatively stable. The bingo turnover, for example, remained at NOK 1.2 billion in 2000.
Website: www.rikstoto.no
Norsk Rikstoto (horsebetting), WAP enabled Norsk Riks–toto, the horse betting operator, achieved income from games of NOK 2.5 billion in 2000, up 10.4 percent from 1999, probably due to more direct broadcasting of horse racing. The market-share is 11.5 percent. In 2000 Norsk Rikstoto had a turnover on 2.6 billion NOK.
Norskespill.no has been granted one of three test licenses for Internet wagering in Norway. This is the exclusive license for instant lottery type games in Norway. The other two licenses are for betting (Norsk Tipping) and pari-mutuel wagering (Norsk Rikstoto). The company is 51 percent–owned by a coalition of the 10 largest humanitarian organizations in Norway and 49 percent-owned by Cee.tv AS, a Norwegian company specializing in interactive digital TV and content development.
Norskespill.no was founded in early 2001 for the specific purpose of establishing and operating an Internet gaming operation for the humanitarian organizations. These organizations will actively support the marketingof the gaming operation.
Norskespill.no will launch their website and operations in August forthcoming.
Website: www.cee.com
Cee.tv AS was founded in the summer of 2000 by four former top management executives at TV 2, Norway's largest commercial television station. Cee.tv is involved in a wide range of projects in the following areas:
Cee.tv AS and the 10 Norwegian humani-tarian organizations have established Norskespill.no AS to take advantage of a professional license granted by the state to run a lottery on the Internet. Cee.tv owns 49 percent of Norskespill.no AS, while the 10 humanitarian organizations own 51 percent. Cee.tv AS is responsible for managing Norskespill.
Cee.tv's owners are:
MyLuckyWorld is a supplier of secure games for companies as well as charity organizations and is creating, operating and marketing entertaining and profitable games. MyLuckyWorld is representing Access in Scandinavia. Access is the leading supplier of Internet-based money games in the world. Several countries in Europe are in operation with lotteries based on Access technology.
Owner's Shares Percentages:
Website: www.telenor.no
Telenor is the former state-owned Norwegian telecommunications group with extensive and fast growing business operations in a number of countries in Europe and South–east Asia. The company is Norway's leading distributor of voice, information, knowledge and entertainment through a broad range of modern communications services. Telenor became a listed company in December 2000.
Telenor Broadband Services' (TBS) new Content and Interactive Services business area deals with the development of interactive services, as well as the management of content and rights. They negotiate with major content providers in the Nordic region to ensure the continuing availability, development and variety of content and interactive services, as well as manages TBS's portfolio of ownership interests in foreign and domestic content providers.
Following Telenor's introduction of digital cable television services in early 2000, interactive services and expanded programming have become available to an increasing number of people. To serve this growing audience of 'active users,' Telenor's new interactive servicesportalfortelevision,
Zonavi (www.zonavi.com) develops and offers such interactive digital services as line games, e-commerce, betting and e-mail.
| Top Ten shareholders | # shares | Based in | % |
|---|---|---|---|
| Norwegian Government | 1.4 billion | Norway | 77.68% |
| Telenor | 30 million | Norway | 1.66% |
| Bank of New York | 22,730,495 | Cayman Isl. | 1.26% |
| Folketrygdfondet | 21,405,895 | Norway | 1.19% |
| State Street Bank (NOM) | 13,041,284 | USA | 0.72% |
| Goldman Sachs (NOM) | 11,887,258 | Great Britain | 0.66% |
| Chase Manhattan Bank (NOM) | 9,140,209 | Great Britain | 0.51% |
| Vital Forsikring SA | 7,715,100 | Norway | 0.43% |
| KLP Forsikring aksje | 7.4 million | Norway | 0.41% |
| Chase Manhattan Bank (NOM) | 7,055,228 | USA | 0.39% |
| Citibank N.A. (NOM) | 6,333,290 | Great Britain | 0.35% |
| Other | 265,448.14 | ||
| Total Shares | 1,802,151,899 | ||
| Total number of shareholders | 56,917 |
Viking Lotto, the joint lotto game of the Nordic countries: Denmark, Finland, Iceland, Norway, Sweden and Estonia.
Viking Lotto, founded in 1993, is promoted as a chance to win big money and offers a weekly joint top prize starting at USD 550,000.
EestiLoto (www.eestiloto.ee),the state lottery of Estonia, became the sixth partner in The Viking Lotto Board of Directors approved Eesti Loto partnership on January 19, 2000, and Estonian lotto players took part in the draw for the first time on March 22, 2000