Kindred Group challenges Norsk Rikstoto licence exclusivity in Norway
Latest industry legal battle heads to Luxembourg court for clarification as operator leans on anti-competition and public procurement law
Kindred Group has challenged the legality of Norsk Rikstoto’s exclusive licence to offer horseracing betting in Norway.
The Stockholm-listed firm has pushed back against Norsk Rikstoto’s position under anti-competition and public procurement rules in the latest legal challenge in the market.
Under Norwegian gambling regulation, online casino and lottery and horseracing betting are split into two separate exclusive licences.
According to the country’s Gambling Act, in respect to the online casino licence, Norsk Tipping is explicitly mentioned and has been granted the licence.
However, Kindred is challenging Norsk Rikstoto’s position as the Gambling Act includes no mention of the operator deigned to hold exclusive rights to offer horseracing betting in the market.
Looking at the Norwegian Gambling Act 2023, Chapter Three details the legislation around “exclusive providers and their gaming offers”.
In the chapter, Norsk Tipping is mentioned 12 separate times throughout the act. Norsk Rikstoto is not mentioned.
In the relevant chapter for horseracing betting, the Gambling Act does not disclose any one specific operator as it does with Norsk Tipping in the section/chapter for online casino and lottery, opening up the contention from Kindred.
While Norsk Tipping is state-owned, Kindred claims that Norsk Rikstoto is a private operator that has been handed the licence without a due competition process.
Additionally, the fact Norsk Rikstoto was awarded the licence without competition was detailed in a proposed update of the country’s Gambling Act in June 2021.
The update noted: “Norsk Rikstoto’s exclusive right is awarded directly without open competition from other applicants. As mentioned above, EEA law allows for a such allocation method, as long as the authorities have sufficient control options with the provider.”
On 17 September 2022, Kindred’s Trannel subsidiary, through which it operates in Norway, delivered a writ of summons to the Oslo District Court claiming the licence award to Norsk Rikstoto breached competition and public procurement rules under the EEA Agreement.
Kindred noted that it was not disputing the exclusivity of the licence but the fact the Norwegian government had failed to open it up for a tender process.
The writ, as seen by EGR, claims that the award of the licence to Norsk Rikstoto is “rigged in the favour of a specific national actor” and is “discriminatory”.
However, in December, Norsk Rikstoto was granted a 10-year extension to its licence.
In the latest twist to the case, on 6 July, the Oslo District Court requested an advisory opinion on the interpretation of EEA law from the EFTA Court in Luxembourg.
The EFTA Court is a supranational judicial body responsible for Norway, Iceland and Liechtenstein.
The Oslo District Court has asked whether the awarding of the licence to Norsk Rikstoto constitutes a services concession under EU Directive 2014/23, as challenged by Trannel in its writ of summons.
The directive lays out a framework to allow “effective access to the concessions market for all European businesses”.
The directive states: “Concessions are contracts for payment whereby one or more contracting authorities or contracting entities entrusts works or the provision and management of services to one or more companies.”
While Norsk Rikstoto is a non-profit organisation, Trannel argues that the licence handed to the firm is a mutually beneficial agreement which constitutes a services concession.
Trannel noted that Norsk Rikstoto had not applied for a licence and despite being a private operator, albeit non-profit, it was still awarded the tender by the Norwegian government.
The second point the Oslo District Court is looking to clarify comes into effect should the EFTA Court find Directive 2014/23 applies.
The court is looking to establish if the awarding of contracts on the basis of exclusivity is applicable given the lack of confirmation in Norway’s existing gambling regulation for horseracing betting.
Speaking to EGR, Trannel’s lawyer for the case Thomas Nordby noted the fact the case had been sent to Luxembourg was a positive step for Kindred.
Nordby said: “We are very pleased with the decision made by Oslo District Court to send a request for an advisory opinion to the EFTA Court, and we look forward to the proceedings.
“The District Court’s decision to send the request for an advisory opinion has strengthened our belief that the case will be successful for Trannel.”
Nordby went on to clarify the latest challenge would not impinge on the previous cases involving Kindred’s presence in Norway.
The Norwegian Gambling Authority and the operator have had a long-running dispute relating to Kindred’s presence in the market under the guise of its Maltese licence.
The lawyer continued: “The case does not impact the previous decisions handed down in Norway related to the gambling regulation.
“In this case, Trannel does not challenge the fact that the licence to offer horseracing betting services is exclusive.
“Trannel merely wishes to compete for the licence and the background for the case is the Norwegian government’s lack of processing a licence application submitted by Trannel.”
The case continues.
EGR has contacted the Norwegian government for comment.