Payment Processing Ban for Norway Online Casinos

The Norwegian government has passed a law, the Payment Act, which has made it illegal for payment processors to carry out transactions for unauthorized online casinos and other online gambling sites. Those that assist in payment processing will be considered accessories to a crime.

The Payment Act was given royal assent last week, and while this is necessary to institute the law, it is more of a formality, since all laws that the government has passed have received assent since 1905, when Norway separated its monarchy from Sweden.

Although the Payment Act is now officially law, it is only due to be enacted on 1st June 2010. Ironically, this is the same date that the UIGEA (Unlawful Internet Gambling Enforcement Act) will officially become legislation if it is not abolished by Barney Frank’s online gambling bills. The Payment Act and the UIGEA are similar laws, both attempting to prevent online gambling sites from operating by preventing financial transactions to take place.

Norway is hoping to get rid of any competition that will affect revenue for Norske Spil, the state-owned gambling monopoly, since a number of European online gambling operators that are privately owned are managing to take business away from the state-owned gambling operation.

Even though Norway is not an European Union member state, it does form part of the European Economic Area. This means that Norway can enjoy the free trade that characterizes the EU. The European Commission, however, holds that countries that form part of the European Economic Area also need to follow the same constraints and guidelines as those that are members of the European Union.

Many are skeptical as to whether the payment processing ban will actually work effectively in Norway or not, since it is fairly difficult to implement the ban at the transaction level, and because the overseas operators, such as Betsson from Sweden, do not seem at all phased by the impending ban.

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