EGBA chief calls for Iceland to “rethink” monopoly market – Gaming regulation
In a recent discourse on the future of Iceland’s gambling landscape, Martin Haijer, Secretary-General of the European Gaming and Betting Association (EGBA), advocated for a transformative approach to the country’s existing monopoly system. He posits that Iceland can align its regulatory framework with its Nordic neighbors, Denmark and Sweden, by adopting an open licensing model for gambling operators.
Haijer emphasized this need for change in an opinion piece featured on the Icelandic news platform, Visir, urging stakeholders to reconsider the current framework, which heavily restricts market participation.
Currently, only six operators in Iceland are licensed to conduct gambling activities, with obligations to channel their profits into social causes. This dynamic significantly limits private sector growth. A report from Iceland Review earlier this year highlighted a stark reality: Icelanders are estimated to spend around ISK20 billion (£112 million/€134 million/$146 million) annually on unregulated foreign gambling platforms.
Haijer articulated that such a monopolistic approach contradicts prevailing trends across Europe, as well as the preferences of Icelandic consumers. “Monopolies inherently restrict consumer options,” he noted. “In a price-sensitive online gambling market, individuals seek to optimize their returns on personal investments. Attempts to constrain choices through monopolistic structures often exacerbate existing challenges rather than resolve them.”
The Nordic Shift: A Model for Success
As a pivotal reference, Haijer pointed to the regulatory progress in Denmark and Sweden, which transitioned to regulated gaming markets in 2012 and 2019, respectively. “Over the past 15 years, these countries have cultivated a consumer-focused regulatory framework that has effectively replaced monopolies with a licensing system, yielding positive market outcomes without noticeably escalating issues of unhealthy gambling,” he explained.
He noted that the former monopolies in these markets were able to thrive in this new ecosystem. “Iceland can mirror the success observed in Sweden and Denmark; however, it necessitates the political resolve to embark on this new trajectory.”
Charting a Progressive Course
The Danish regulatory authority, Spillemyndigheden, reported a 7% increase in gambling rates in the decade following the market liberalization, showcasing that average gambling expenditures remained consistent within monthly budgets, achieving remarkable channelization rates of 90%.
In contrast, challenges persist in Sweden, where channelization has declined, and traffic to unregulated operators surged tenfold since 2019. Meanwhile, Finland is also progressing toward opening its online gambling market, evidenced by a draft proposal issued in July.
Haijer reiterated that implementing a licensing regime in Iceland would enhance player safety and not necessarily lead to increased gambling participation. “On the contrary, this change aims to foster a regulatory framework that inherently provides a safer gambling environment for players than what currently exists in Iceland,” he asserted.
“While establishing a licensing system is fraught with challenges—as demonstrated in other European jurisdictions—it is crucial to engage in comprehensive evaluations that weigh the consumer, regulatory, and economic advantages of such a shift. Although hurdles are inevitable, the vast majority of European nations have successfully navigated these complexities.”
In conclusion, as Iceland contemplates its gambling framework, embracing a well-regulated licensing system could represent a significant leap toward modernization, aligning with global standards and consumer expectations, ultimately benefiting both the industry and its participants.
