Partial Victory for Norwegian Government in Payment Blocking Suit

The Norwegian Government has won a partial victory in payment blocking suit. The Oslo District Court has ruled that the Norwegian Ministry of Culture, Agriculture and Food does have the right to block payments to offshore igaming operators.

However, Entercash and the European Betting and Gaming Association (EGBA), the plaintiffs in the case, could still prevail in a second hearing. This will examine whether the blocking measures constitute an illegal restriction on the provision of services within the European Economic Area (EEA).

EGBA and Entercash filed the lawsuit against the Ministry in June this year, after efforts to block transactions between Norwegian banks and financial institutions and offshore gaming operators were stepped up. This comes as part of a wider enforcement drive by the Norwegian authorities to stamp out offshore activity to preserve the state-owned operator Norsk Tipping’s gambling monopoly.

The court ruled that the block does not violate the EU Payment Services Directive, as member states may still apply national laws that “may affect the functioning of the common [payment] market.”

“The State […] is acquitted in so far as the allegations are based on the assertion that the decisions are invalid because they lack internal legal authority and contravene the Payment Services Directive,” Anne Cathrine Haug-Hustad, the District Court Judge said.

“There is no doubt that the regulations, and thus the decision, are based on law. The regulations are laid down on the basis of Section 2 of the Gambling Act, Section 11 of the Lottery Act and Section 3 of the Totalizator Act,” Haug-Hustad continued.

“In today’s digital age it is virtually impossible to enforce national borders on the internet but that’s what the Norwegian authorities are trying to do by introducing payment blockings for online betting. Rather than being a tool to benefit consumers, such restrictive measures are aimed at protecting the revenues of the state-owned monopoly by cutting off outside competition from reputable EU-licensed operators,” EGBA secretary general Maarten Haijer said.

“This is not only in breach of the EU’s internal market principles but out of step with the reality of a consumer-driven betting market, where players will inevitably search around the internet for value and choice in the games they play,” he added.