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:
- Italy - US$225
- Spain - $198
- Norway - $184
- Finland - $175
- Sweden - $158
- United Kingdom - $132
- Denmark - $127
Norway
Key figures
Norwegian kroner, NOK
1 USD = 8.88 NOK as of 24 January 2001
Population: 4,481,162 (July 2000 est.)
Age structure:
0-14 years: 20% (male 459,608; female 434,809)
15-64 years: 65% (male 1,472,974; female 1,430,526)
65 years and over:15% (male 283,741; female 399,504) (2000 est.)
GDP: purchasing power parity - $111.3 billion (1999 est.)
GDP - real growth rate: 0.8% (1999 est.)
GDP - per capita: purchasing power parity - $25,100 (1999 est.)
The Norwegian Gaming Board
The Norwegian Gaming Board (www.lotteritilsynet.no) was established January 1, 2001 and has taken over many functions formerly shared between 54 different police districts nationwide and the Ministry of Justice. The Gaming Board will, during this year, employ 33 officials. In addition, a new external and mobile control unit will be established later this year.
Fees from the gambling industry finance the Norwegian Gaming Board, which is placed under the Ministry of Culture. Beside being responsible for control and supervision of private and public gambling, the Gaming Board also is a directorate with responsibility to evaluate legislation and give advice to the authorities about gambling issues.
Complete Political Evaluation
The Norwegian government has demanded a complete evaluation of all kinds of gaming and lotteries in the country. The research will lead to a political treatment of the existing and the future gaming industry. Two different committees will survey different sides of gaming and will, among other things, consider whether or not Norway shall open for casinos in the future.
The Gaming Board is hoping to be able to finance a broad survey to uncover the amount of gambling addiction in the Norwegian population. Hopefully a survey can start within the end of 2001.
The Ministry of Culture has appointed an expert committee to evaluate several of the issues concerning existing and future gaming. The tasks given the committee, includes:
- give a full survey of the cash flow in gaming controlled both by the state and private lotteries,
including the slot machines. (Norway has relatively many slot machines--approximately 25,000 in a population of 4.5 million);
- consider the expected development in the technological sector, and the consequences this will
have on the different kind of gaming and the money going to the good causes;
- survey how competition from foreign gaming effects state and private gaming in Norway and propose how to meet the expected competition in the future;
- define better how the humanitarian and volunteer causes may qualify for money from gaming;
- propose changes in the rules concerning the certified organizations.
The Norwegian Gaming Board is closely watching Norwegian-owned companies running games via servers in other countries, among others from Great Britain.
All lotteries in Norway give a percentage of income to humanitarian or volunteer organizations; there are approximately 5,000 small and large organizations gaining money from national lotteries and gaming.
The turnover in the legal Norwegian gaming industry passed 22 billion Norwegian Kroner (approximately US$2.5 billion) last year. In addition, Norwegians spent several hundred million Kroner on Internet gaming worldwide. Internet gaming is in general forbidden in Norway, but three organizations have been given permission to test time limited gaming in a smaller scale on the Internet, and the first one started to be operational in May this year.
Around 50 percent of the turnover comes from gambling in the state-owned companies, Norsk Tipping and Norsk Rikstoto, which organize gaming on, among other things, horseracing, odds gaming, sports betting and lotteries.
Norway also has relatively many slot machines compared to the population of 4.5 million inhabitants. Around 25,000 slot machines are in use nation wide. The turnover on the slot machines, is likely to have passed nine billion NOK a year.
Mobile and Internet gaming
The Gaming Board has given a one-year temporary license to arrange lottery on mobile telephones.
This so called "SMS lottery" is only based upon the GSM mobile platform. And according to Cee.tv AS spokesman Steinar Brændeland (COO sales and marketing), there will be several other SMS lottery operators, but only three on the Internet. The lottery will also be available on mobile devices, when the GPRS mobile platform is launched later this autumn. This is also the case when Interactive TV with internet browser will start next year.
Additionally, three temporary Internet gaming licenses have been issued in Norway:
- Norsk Tipping (lotteries and sports betting) - From May 2, 2001, Norsk Tipping AS started its pilot project for Internet gaming. The pilot players have been randomly chosen among their customers;
- Norsk Rikstoto (horse betting) - currently running a pilot Internet project;
- Norskespill.no - an organization including 10 volunteer/humanitarian organizations.
Internet gaming is growing rapidly in Norway. Norsk Tipping estimates that Norwegians in the year 2000 spent 400 million NOK on Internet gaming-increasing from an estimated 150 million the year before. A.o. Casino Lux (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 gaming market continues to grow. Strong growth in 1999 (8.4 percent) was followed by more moderate growth in 2000 of 3.4 percent.
The total market in 2000 was worth 22.4 billion NOK.
Operators
Norsk Tipping, www.norsk-tipping.com: lotteries and sports betting
Key figures:
Year Lottery Founded: 1948
Sales 1997: NOK 6.7 billion
Sales 1998: NOK 7.6 billion
Sales 1999: NOK 8.0 billion
Sales 2000: NOK 8,2 billion (+ 2.9 %)
Paid out prizes in 2000: 4,294,3 NOK million
Average Norsk Tipping's wager per person per year: 1,842 NOK
Market share 1999: 37.1 %
Market share 2000: 36.9 %
Number of Employees: 267
Games Offered:
Lotto
Viking Lotto*
Extra (Bingo-type gaming)
Tipping (Sports betting)
Joker (game on the player card)
Oddsen (Odds betting)
Flax (Instant game)
Beneficiaries: sports, culture and research
Jurisdiction: Norway
Norsk Tipping's Internet Activities
The EL European Lotteries and its Internet Active State Lotteries in Europe's "Survey of the New Media and Internet Working Group" received the following confidential information from Norsk Tipping on their newly started internet operation:
The test period started May 2, 2001. On June 12, the number of players was 2 million. Weekly turnover is US$4,000, which is 0.025 percent of total of lottery turnover.
Games Played: lotto and odds betting (long list)
Type of Access: personal computer with a smart card reader
Means of Payment: Smart Card
Norsk Tipping's e-business project, known internally as "Hermes," has required considerable resources. Total investments will amount to Nearly NOK 100 million over two years. Thirty of Norsk Tipping's employees are directly involved, in addition to external expertise within specific areas. The site is only available in the Norwegian language.
Norsk Rikstoto, www.rikstoto.no (horsebetting), WAP enabled
Norsk Rikstoto, 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
Slot machines
Until 2001, there were hardly any regulations 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): 25,000. This makes gaming machines 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. From January 1, 2001, an age limit of 18 years was introduced for playing gaming machines.
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 approximately 10 percent.
Others
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.
Norskespill.no
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 marketing of the gaming operation. Norskespill.no will launch their website and operations in August forthcoming.
Supporting Companies
Cee.tv 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:
solutions for interactive TV;
quiz shows/knowledge-based games (see: Cross the World)
Cee.tv AS and the 10 Norwegian humanitarian 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:
- Telenor Broadband Service (www.telenor.com);
- Møller-Investor (www.moller.no);
- Alma Media (www.almamedia.fi);
- e.Scienza (www.escienza.com);
- the founders (www.cee.tv).
Myluckyworld www.myluckyworld.com
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:
- Norsk Aller AS 982.260 40.4 (www.transnationale.org/anglais/);
- Vindeggen AS 232.000 9.5 (www.uio.no);
- Telenor Plus AS 227.900 9.4 (www.telenor.no);
- Jastin Invest Ltd. 153.600 6.3
- Founders 987.280 34.4
Telenor 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 Southeast 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 services portal for television, Zonavi (www.zonavi..com), develops and offers such interactive digital services as online games, e-commerce, betting and e-mail.
Top Ten shareholders/No. of Shares/Country/Percentage of Total
Norwegian Government**, 1.4 billion, Norway, 77.68%
Telenor, 30 million, Norway, 1.66%
Bank of New York, 22,730,495, Cayman Island, 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 ASA, 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, 265,443.14
Total shares: 1,802,151,899
Total number of shareholders: 56,917 (updated July 02. 2001)
* 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. Eesti Loto (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
** Ministry of Trade and Industry (NHD)