Earlier reports had indicated that Norway was set to introduce the new restrictions - which have already been approved by parliament - as early as the end of next (August) month.
The Surveillance Authority of the Association has advised the Norwegians that such a law would break free trade rules for the internal market of member nations. Norway is one of four EFTA members, the others being Iceland, Lichtenstein and Switzerland. Members are committed to European free trade and partnership agreements, and the European Economic Area Agreement with the European Union that creates a single and unified Internal Market, ensuring the free movement of goods, services, and capital throughout the EU and EFTA.
Gambling is among the services specifically included in the free trade deal, and if the Norwegians persist in introducing the controversial legislation, the country could face infringement procedures before the EFTA courts.
Protestations that such a law is necessary to protect Norwegian players from the ills of gambling are unlikely to succeed, given the aggressive player acquisition and marketing campaigns being operated by the Norwegian gambling monopolies Norsk Tipping and Rikstoto.
Commenting on the latest developments, the CEO of the Remote Gaming Association, Clive Hawkswood, said: "The Norwegian authorities appear to be more motivated by the need to protect [their] revenues from gambling [than Norwegian gamblers] but this is not a valid justification to restrict the internal market rules." The RGA counts most of Europe's larger online gambling companies among its membership.
The warning from the EFTA Surveillance Authority was issued following a consultative process on the issue, after the Norwegians tabled their proposals before EFTA in April 2009, advising that the law will ban all gambling financial transactions other than those to Norwegian licensed operations - in other words Norsk Tipping and Rikstoto.
Private gambling companies have voiced opposition to the Norwegian plans, pointing out that its implications extend far beyond Norway's borders in respect of Internet and cruise ship gambling transactions.
The Norwegian Financial Services Association and Norwegian Savings Banks Association have also expressed reservations about the legislation, which they will inevitably be required to enforce. The fear is that, like the UIGEA in the United States, confusion will lead to over-zealous blocking, resulting in severe disruption both within and outside Norway. Government estimates on the value of payments stopped from leaving the country by the new law are in the region of 5 to 10 billion Norwegian kroner a year.
With a general election looming on September 15, the current government will probably take a more cautious line, and there is always the chance that a change of government may bring about a practical review of the proposals.
Latest reports indicate that the Norwegians are unlikely to respond to the EFTA warning until after the July holiday period.
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