A dedicated and affluent player base, a strong focus on responsible gaming, many regulated markets and a handful of state monopolies: Slotegrator takes you on a tour of the Nordic and Baltic region.
The northern edges of the old continent are home to many interesting markets. Despite lacking the sheer size of the Western European giants, the region presents highly regulated wealthy markets like Denmark and Sweden and fast-growing economies with liberal regulations – Estonia first and foremost – on the eastern shores of the Baltic Sea.
While some of these markets are subject to state monopolies, the region remains one of high interest for prospective investors in the online gambling sector. Among its key features are high rates of internet penetration, notable levels of disposable income, and the locals’ well-known love for gambling as a form of entertainment.
To get an overview of the regulatory and financial aspects of the Nordic and Baltic markets, keep reading this article.
With a 28.65% year-on-year growth in Q1 2021, the Denmark online casino sector is in excellent health. With a gross gaming revenue (GGR) of around €330 million for 2020, this vertical has overcome the equally sizable online betting one, that raked in €308 million during the same year.
The Danish online gambling market is fully regulated. Operators can acquire local licenses to provide both casino and betting services; lotteries, on the other hand, are subject to a state monopoly and run by Danske Lotteri Spil.
The casino license covers gambling machines, card games like poker and blackjack, roulette, baccarat, and bingo. As for the betting license, only virtual sports products are excluded from those that can be offered online, as they fall under state monopoly. Regulations draw no distinction between online and offline services in terms of permits required.
The number of licenses available in the country is uncapped; the permits are valid for 5 years, but it's also possible to acquire one-year licenses in case of limited revenue or turnover (respectively about €135,000 and €670,000 with a payout ratio below 20%).
To apply for a license, it's necessary to have an established presence in Denmark or any other EU/EEA country; fees depend on the permit acquired and the operator's gaming income.
The application fee for individual casino and betting licenses runs at just under €40,000, whereas a combined permit commands a €55,000 fee. One-year income- and turnover-restricted licenses stand at €7,800.
In addition to this, operators are subject to an annual payment dependant on their GGR, ranging from €7,800 for GGR lower than €670,000 and capped at about €700,000 for GGR above €67 million.
For all types of gambling, taxation stands at 28% of the monthly GGR.
The application process has been simplified for both new licenses and renewals in early 2021.
Greenland and the Faroe Islands
Both Greenland and the Faroe Islands are autonomous, self-governing territories within the Kingdom of Denmark. While Danish law doesn’t automatically apply in these jurisdictions, in 2016 Greenland chose to implement the mainland’s Gambling Act. Meanwhile, online gambling remains unregulated in the Faroe Islands.
In Iceland, most forms of gambling are formally illegal; the only exception is made for charity lotteries. These can only be run by the University of Iceland (since 1933) and Íslandsspil, an organisation co-owned by the Icelandic Red Cross and the Icelandic Association for Search and Rescue (ICE-SAR). All the proceedings are used to finance the operations of these voluntary associations.
While talks of legalising casinos in the country surface every now and then, there is currently no formal proposal on the government’s table.
20 September, 2022
Central Europe takes centre stage
Since the 1990s, online gambling in Norway has been subject to two state monopolies. Norsk Tipping holds exclusive rights on lotteries, casino-style gaming, and sports betting; horse racing is the domain of Norsk Rikstoto.
Between 2019 and 2020, the government carried out a review of the gambling legislation to consolidate the existing acts and introduce further norms on social responsibility and gambling addiction prevention.
Following the review, a group of Norwegian MPs proposed stripping Norsk Tipping and Norsk Rikstoto of their monopolistic rights, reintroducing an open gambling market. This proposal was rejected in early 2021.
Interestingly, the Norwegian Gaming Authority states explicitly that it is not illegal for Norwegian players to gamble on websites run by foreign operators.
The Swedish online gambling market experienced notable growth in 2020, offsetting the losses of brick-and-mortar operations during the first year of the Covid-19 pandemic. The total gambling revenues in the country for 2020 amounted to €2.44 million.
Online gambling was regulated in Sweden in 2019 with the Gambling Act and Gambling Ordinance, giving operators the opportunity to acquire casino gaming and betting licenses. Unlike most other jurisdictions, Sweden allows bookmakers to take bets on any type of event, including virtual and non- sport related ones.
There is no cap on the number of licenses available, and the permits are valid for a maximum of five years. Both casino and bookmaker licenses cost just under €40,000; on top of these, operators are subject to recurring annual fees dependant on the turnover, ranging between €3,000 and €50,000. Taxation amounts to 18% of the monthly GGR derived from stakes placed by players who are resident in Sweden.
In early 2021, the Swedish government delineated its intention to limit access to gambling to tackle addiction and underage gaming, on top of providing support to problem gamblers. It is still unclear what steps the Swedish Gambling Authority (Spelinspektionen) will take to achieve these objectives.
14 September, 2022
Western Europe: big bet, big payoff
Gambling in Finland is regulated by the Lotteries Act of 2001 and is subject to a monopoly. The state-owned gambling agency results from the fusion of three previously existing companies: Finland’s Slot Machine Association (RAY), Fintoto, and Veikkaus, of which it retains the name.
A reform of the Lotteries Act is currently being pursued; however, this is not expected to open up the market to private operators. Instead, the stated aims are to intensify player identification checks and extend the ban on the advertising of gambling products.
The Åland Islands, an autonomous archipelago off the southern coast of Finland, have a local monopolistic operator in Ålands Penningautomatförening (Paf).
Paf runs both online and brick-and-mortar operations on the islands, raking in a yearly net income north of €20 million. Profits are redistributed to local non-profit organisations supporting the islands’ community. Paf is a leading voice in the responsible gaming conversation, and it was the first online operator to introduce loss limits for its customers.
Per the 2008 Gambling Act and its amendments, online gambling in Estonia is legal and fully regulated. Online lotteries are subject to state monopoly (Eesti Loto), whereas games of chance and betting products can be offered by operators holding a relevant license.
The number of available licenses is uncapped; validity is of up to five years. Permits to organise games of chance command an application fee of €47,940; for sportsbooks, the fee stands at €31,960. In addition to this, operators have to pay a €3,200 review fee.
For casinos, the minimum capital required is €1 million, whereas betting operators are required to hold only €130,000.
Taxation amounts to 5% of the operator's net gaming revenue and is due monthly.
The Estonian iGaming market has experienced a sizable growth during the past year, growing from €60.2 million in 2019 to €78.13 in 2020.
For a more in-depth look into this promising market, make sure to read our dedicated article on the topic.
18 May, 2021
How to start an online casino or sportsbook in Estonia in 2023
Much like Estonia, online gambling in Latvia is regulated and open to licensed private operators, except for lotteries, which are run by Latvijas Loto. The GGR for the Latvian gambling market amounted to €307 million for 2019, for a 10.5% year-on-year increase.
The offering of land-based and online gambling products in the country is regulated by the Law on Gambling and Lotteries of 2005, amended as recently as April 2021. The local gambling authority is the Lotteries and Gambling Supervisory Inspection of Latvia (IAUI).
Operators can acquire licenses to provide both casino-style gaming (slots, roulette, cards, dice, bingo) and sportsbook services.
The number of available licenses is uncapped, and applications are currently being accepted. Permits do not expire; however, they must be formally renewed annually.
A license to provide both offline and online services costs €427,000, whereas an online-only permit stands at €200,000. Yearly renewals currently run at €37,000. Taxes are fixed at 10% of the GGR.
While the Latvian government intends to reduce access to gambling to alleviate the effects of problem gaming on society, the proposals currently being discussed only affect brick-and-mortar establishments.
Driven by the rise of online betting, the Lithuanian iGaming market exploded in 2019, registering a 44.5% year-on-year growth and causing a 13.1% increase to €112.6 million for the country’s overall GGR.
The market is regulated by the 2001 Gaming Law and supervised by the Gaming Control Authority. Operators can offer all classic casino games and betting services; an amendment was submitted in 2020, adding virtual events to the list of viable betting products.
A handful of further amendments are entering into force in 2021, covering advertising regulations, money laundering prevention, and requirements for live table games performed through remote devices.
While online gambling licenses are available, operators can only acquire one if they run brick-and-mortar services in the country (a casino, ten slot machine halls, or multiple betting stations).
The number of available licenses is uncapped, and applications are currently being accepted. The permits have no expiration date.
In the case of a casino with the minimum number of slots and tables (respectively 30 and 3), the combined fees to acquire both a land-based and an online permit amount to about €260,000. The fees increase with the number of tables and machines in the brick-and-mortar casino. Companies must maintain a guarantee of €72,400, and the minimum capital required to operate is slightly over €1 million. Taxation is set to 13% of operators’ GGR.
The government has recently floated the possibility of introducing flat fees for licenses and issuing online-only permits; these are expected to cost €500,000. If the proposed amendments are to be implemented, they will enter into force on January 1, 2022.
How can Slotegrator help?
Starting an online casino or sportsbook isn't easy, and choosing the proper jurisdiction in which to operate is perhaps the trickiest part.
Our jurisdictional advisory services can help you understand each country's legal and financial requirements to zero in on the right market for your project and then assist you in obtaining the licenses necessary to operate.
For further information, drop a line to our sales team – we'll be happy to provide you with a free consultation.