EGBA chief calls for Iceland to “rethink” monopoly market

In an opinion piece published on Icelandic news website Visir, Haijer called for a “rethink” of the nation’s monopoly-based market.

The only six entities in Iceland that have been granted a gambling licence must invest their proceeds into social causes, squeezing out the private sector. A report earlier this year by the Iceland Review magazine claimed that Icelanders spend about ISK20bn (£112m/€134m/$146m) on unregulated foreign gambling websites annually.

He warned that the current system is “at odds” with almost all other European countries, as well as Icelanders themselves.

“It is the nature of monopolies to limit consumer choice,” he said. “Online gambling is a price-driven market. People play for their own money and naturally want to maximise their potential returns.

“Attempts to limit consumer choice through monopolies therefore create more problems than they solve.”

Nordic liberalisation

Haijer cited the experiences of Denmark and Sweden, which launched regulated gaming markets in 2012 and 2019, as inspiration for Iceland.

“Over the past 15 years, a well thought out and consumer-oriented regulatory framework has been gradually established in Denmark and Sweden,” he said. “The experience from both countries shows that ending monopolies and introducing a licensing system had a positive effect on the market and did not lead to an increase in unhealthy online gambling.

“The companies that used to have patents in these countries have also prospered… Iceland can achieve comparable results to Sweden and Denmark, but it requires political will and courage to change direction.”

A path to follow?

According to Danish regulator Spillemyndigheden, gambling rates increased by 7% in the 10 years following the market opening up. However, average gambling expenditure represented about the same percentage of monthly spending, with channelisation rates reaching an impressive 90%.

However, challenges remain in Sweden, where channelisation rates are lower and visitor traffic to unlicensed operators has increased tenfold since 2019.

Finland’s government also revealed plans to open its online gambling market via a draft proposal released in July.

Haijer noted that any licensing regime in Inceland would improve customer safety and would not encourage more people to gamble.

“On the contrary, such a change is about creating a regulated environment that is safer for players than the current environment in Iceland,” he said.

“The implementation of a licensing system is not without its challenges, as the experience from other European countries shows. It will require careful work that assesses the consumer, regulatory and economic benefits of implementing a new system. These challenges are inevitable, but almost all European countries have managed to solve them successfully.”