Norway's Lotterinemnda upholds Kindred blocking order

14 May 2020

Kindred Group subsidiary Trannel International’s ban from operating in Norway has been upheld by the country’s Lottery Board (Lotterinemnda) and the operator must now stop offering online gambling to Norwegian customers.

Lotterinemnda, an independent body that adjudicates on complaints and operates under the Ministry of Culture, rejected Kindred's appeal against a ruling by Norwegian gambling regulator Lotteri-og Stiftelsestilsynet (Lotteritilsynet), issued in April 2019.

That saw Kindred ordered to cease operations in Norway, after the operator was accused of illegally targeting Norwegian players with brands including Unibet, Maria Casino, Storspiller and BingoLottstift. This outright ban came after Lotteritilsynet had imposed payment-blocking orders on the Kindred sites, and six other operators.

The regulator noted that the sites can be viewed in Norwegian, with deposits and bonuses are in Norwegian currency and pointed out Kindred offers Norwegian-language customer support. In addition, it marketed its offerings through TV commercials that aired in Norway - but were broadcast on satellite channels based in other countries - and used Norwegian ambassadors, Norwegian press release services and Norwegian social media channels.

The regulator said at the time that Kindred would have to remove all Norwegian language services and imagery from the site if it was to avoid being blocked by internet service providers. It was also ordered to stop processing deposits and withdrawals in Norweigan Krone, stop advertising in local media and using local public figures as ambassadors. Finally, it said Kindred must not use payment solutions specifically designed for the Norwegian market.

Lotteritilsynet pointed out that Kindred had also been running various other sites used by local players, but it was of the opinion that the operator had been actively targeting Norwegian players via Unibet, Maria Casino, Storspiller and BingoLottstift.

Kindred said at the time it would appeal the ruling to both the Ministry of Culture and Lotterinemnda.

In its response, Kindred argued Lotteritilsynet had been inconsistent in whether it was referring to gambling directed “to Norway” or gambling that takes place “in Norway”. The regulator did not have the authority to make decisions against games offered from Malta, Kindred claimed, without interfering with another nation’s sovereignty.

In addition, Kindred argued that Norsk Tipping's exclusive right to offer certain games and lotteries is a restriction on the free movement of services.

Lotterinemnda ultimately ruled in favour of Lotteritilsynet, citing guidance from the Datakrimutvalget, a government committee formed to develop best practice for tackling cybercrime, including online gambling.

“In normal cases where a website is made by foreigners abroad and published on a foreign server, this will fall outside Norwegian jurisdiction,” the Committee wrote in 2007. “Exceptions to this principle can be envisaged if, for example, there are sites that are specifically designed for use in Norway and where the negative consequences mainly or exclusively manifest themselves here.

“An example is websites with gaming services that are marketed directly to the Norwegian market, for example by the site having Norwegian text. This could then be considered as crime that has been committed abroad, but which has an effect in Norway and must therefore be punishable here where the effect occurs.”

Lotterinemnda said that if this jurisdiction abroad applies to law enforcement it should also apply to regulators.

Kindred’s argument that the decision interfered with Maltese sovereignty was also rejected, with Lotterinemnda saying it did not hold up to scrutiny.

“Lotterinemnda also does not believe that Lotteritilsynet's decision interferes with the sovereignty of another state,” it said. “The relevant websites will continue to exist and may still be directed at customers in other countries where such gaming activities are permitted.”

In addition, the board said it had ruled on Norsk Tipping’s exclusive rights model in the recent past and said it “cannot see that there are circumstances that warrant a different assessment today”.

Kindred's appeal was already rejected by the Ministry of Culture, on 7 January 2020.

Lotteritilsynet senior advisor Trude Felde said the regulator would now ask Kindred whether it intends to comply with the ruling. 

Felde added that the ruling confirmed that enforcement action against offshore operators should target those that explicitly adapted their offerings in order to target Norwegian customers.

"This is an important confirmation that we are interpreting regulations correctly," she said.

The operator is yet to comment on the ruling.