Court Gave The Partial Victory In Payment Blocking Suit To Norwegian Government

Norwegian Ministry of Culture, Agriculture and Food does have the right to block payments to offshore iGaming operators, according to the ruling of the Oslo District Court. According to court, this move does not contravene EU law.

However, all isn’t lost for the plaintiffs in the case.

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

The case was split into two…

The first hearing focuses on the following two elements:

• Whether payment blocking violates the European Union Payment Services Directive
• Whether the governments lack the legal authority to implement the ban

Via the court ruling, the block does not violate the EU Payment Services Directive since member states may still apply national laws which “may affect the functioning of the common [payment] market.”

District Court Judge, Anne Cathrine Haug-Hustad, said that the State is acquitted 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.

The court also decided…

… that the Ministry did have the legal authority to block payment services.

“There is no doubt that the regulations, and thus the decision, is 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,” adds judge Haug-Hustad.

The second hearing can go either way.

The first hearing brought a partial win to the Norwegian government. However, it could not claim victory in the case due to the second hearing, which is yet to be scheduled. The court will then make a final ruling on whether the payment blocking measures are suitable, necessary and consistent with rules governing the free movement of services within the EEA.

This means the EGBA and Entercash could still turn the tables to their advantage, through legal action.

“As a result, it is not possible now to determine whether any of the parties have ‘won the case’ or ‘been granted a significant claim’,” concluded Haug-Hustad.

EGBA and Entercash filed a lawsuit against the Ministry in June this year.

The Association reacted right after efforts to block transactions between Norwegian banks and financial institutions and offshore gaming operators were stepped up.

These actions came as part of a wider enforcement drive by the Norwegian authorities to stamp out offshore activity to preserve the gambling monopoly of the state-owned operator, Norsk Tipping.

“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.

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,” said EGBA secretary general, Maarten Haijer, said at the time.

Source:

“Norwegian govt wins partial victory in payment blocking suit”, igamingbusiness.com, August 20, 2019.