Is Norwegian Olympic Success Linked To Support For Gambling Monopoly?

March 2, 2022
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A new Norsk Tipping TV commercial, Born With Skis, portrays Americans gnashing their teeth at Norway’s recent domination of the Winter Olympics and goes some way to explaining the country’s steadfast desire to protect its gambling monopoly.

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A new Norsk Tipping TV commercial, Born With Skis, portrays Americans gnashing their teeth at Norway’s recent domination of the Winter Olympics and goes some way to explaining the country’s steadfast desire to protect its gambling monopoly.

The advert asks, who can beat a country where they pole-vault, play hockey and even give birth, on skis?

The commercial can also be seen as celebrating not just Norwegian’s winter sports powerhouse but also Norwegian sports’ decades-long relationship with gambling at state monopoly Norsk Tipping.

The 45-second spot closes with the words, “there’s a lot the world doesn’t know about Norwegian sports. We’ve been a part of it since 1948”.

Then “give dreams a chance”.

Norway, population 5.5m, won 37 medals, 16 of them gold, finishing ahead of second-place Germany, plus China, the USA and the Russian Olympic Committee. The country also topped the Winter Olympics in 1994 and 2018.

Last year Norsk Tipping raised 3.2bn Norwegian krone (€321m) for sports, NOK750m (€75.2m) of it for Olympic and Paralympic sports.

The rest went for sports facilities, research, equipment and grants to clubs, including youth organisations. The country has about 12,000 sports clubs.

Last month, the Wall Street Journal zeroed in on Norwegian sports and Norsk Tipping in an article, “The Country Where Betting on Sports is Patriotic”.

About 64 percent of gambling proceeds are earmarked for sports and the Winter Games are Norway’s Super Bowl, according to the financial publication.

Norsk Tipping introduced sports betting in 1994, just in time for the Winter Olympics in Lillehammer, which was topped by Norway.

In any case, the wintertime success of a country with fewer people than the US state of Wisconsin, as the Journal puts it, may help explain why it defends its monopoly so fiercely.

The Norwegian Gambling Authority (NGA) has been given new powers to crack down on unlicensed operators and has ordered Stockholm-listed operators Kindred and Betsson to stop soliciting Norwegian residents or face “coercive fines”.

The downside of a monopoly, according to much of the European online gambling industry, is that citizens look for better deals elsewhere.

Only half of Norwegian online gambling stays in Norway, according to the regulator, while online gambling trade groups claim two-thirds of wagers go offshore.

But the advantage of a monopoly could be that, as the Journal puts it, Norwegian gambling is “tightly regulated to restrict potential losses and forestall irresponsible habits”.

The advantage of having all gambling with one single operator “is that it generates a financial incentive in keeping the wagers on number games”, said Henrik Nordal, director of gambling for the NGA.

By “number games,” Nordal means low-risk games such as Lotto, Keno or draw-based lottery games, which have a 40 to 60 percent return to player rate.

“Keeping the wagers on number games to the largest extent possible keeps risk low and the return high,” he said.

“If you separate the categories like many jurisdictions do with a monopoly on the number games and high degree of competition on riskier categories like sportsbook and online casino, you create revenue at the expense of rapidly increasing harm.”

A University of Bergen survey commissioned by the NGA will seek to measure the economic, social and health costs of problem gambling in Norway, with results due shortly.

The study will not, however, measure the possible social benefits of gambling, said one of the project managers, Joakim Hellumbråten Kristensen.

But he said, “the recent Olympic success might — in addition to the extreme preparative efforts by the athletes, coaches, and others — partly be attributed to the huge amount of resources spent on the Norwegian Olympic teams, which partly derives from the surplus of Norsk Tipping”.

Still, it would be hard to assess social benefits in monetary terms, because Olympic success would primarily be considered an “immaterial benefit” such as happiness or “increasing perceptions of being proud of being Norwegian” and "indirect benefits" such as motivating people to play sports and exercise and thus increase overall health in society, Kristensen said.

Norway is far from the only country that funds its Olympics efforts through gambling, although some such as the UK do so only through lotteries, considered a softer form of gambling.

Finland’s Veikkaus has a complete gambling monopoly and is considering severing the direct link between it and charities and the Olympic committee, with the money going to the government for distribution.

Sweden’s Svenska Spel has a six-year sponsorship agreement with the Swedish Olympic Committee for at least 100m Swedish krona (€9.4m), running through 2026.

Last year it signed a five-year SEK 125m deal with the Swedish Ski Association.

Svenska Spel is state-owned but the country has not had a gambling monopoly since January 2019.

The UK’s National lottery funds a large portion of funding for Team GB’s Olympics effort.

The National Lottery funded about two-thirds of Britain’s £276m cost of the Tokyo Summer Olympics, or about £184m (€219.5m), and the same percentage of the Beijing Winter Olympics, or about £18m.

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