Impact of the potential DNS-blocking in Norway

After posting the Betsson 2021 December update, some of the feedback I got, was, what about Norway.

I just started to read up on the subject. There might be parts that I misunderstood, so please correct me if I am wrong.

Norway has a legislative proposal to use DNS blocking for I-gaming sites. When writing for example Betsson.com into your browser, a request is sent to your internet service provider´s DNS server, which translates the letters into an IP address. An IP address is a series of numbers, pointing to the actual server hosting the website. It is also possible to write the IP address directly into the web browsers address bar. With the legislative proposal, Norway wants to force the internet service providers not to translate the web address into an IP for their customers.

The proposal is supported politically by a majority, according to an article from the gambler magazine. The proposal is also supported by the voters, as reported by e24.

Betssons comment is that method is only used by states that censor their citizens, by states like North Korea and China. But the fact is that a long list of countries, for example, the UK have during the last decade blocked Pirate Bay after requests/legal processes from the copyright owners.


The pirate bay ban

The dynamics are probably different for Betsson than for Pirate Bay, but the action the was taken by the government are the same. Possible the outcome could be similar.

  • After 6 years of legal debates, Norway in 2015 blocked The Pirate Bay.org. Directly after new domain names were created, the new domain named forwarded the users to Pirate Bay. A search on Google provides me with these links that should work also in the banned countries, for example, https://thepiratebay.unblockninja.com. If Norway also wants to stop this address, they need to start the process all over again. The legal community is slower than the internet community.

  • The impact on the Pirate bay was limited, link to the article countries blocking pirate bay. Even though torrenting was illegal, people kept on sharing files on Pirate bay after the ban.

In mid-July, ISP data suggested that P2P traffic in the UK had dipped 11% just after the block, but then swiftly recovered to nearly the level before the block was enforced. "...volumes are already pretty much back to where they were before." The ISP released the figures anonymously to the BBC.[108]


Technical solutions to avoid any kind of DNS-blockings

There are solutions to handle DNS blockings that circumvent any attempt to stop users from reaching a certain site. The only countries that successfully block their citizens are where they rather have a white list than a black list. The few countries using this are for example North Korea.

Defining your own DNS server

You can use a DNS server of your own choice. Google provides a product called, Public DNS, that provides a DNS service without any blockings, that is easy to change by the user. Link to Public DNS. There are many similar services.

VPN tunnel

An popular solution to protect your integrity on the internet is a VPN tunnel. It booth encrypt all your information and bounce your traffic on a server somewhere in the world of your choosing. If you not would like to be blocked in Norway you can decide to instead appear as a citizen in, for example, Switzerland. This is also popular if you would like to have the Netflix offering from another country compared to where you live.


Potential size of the Norwegian market

It is not known how big the Norwegian market is for Betsson. One approach is to relate it to how many people are living in Norway compared to the other Nordic countries. 20 % of the Nordic population are living in Norway. The revenue coming from the Nordics is 2,2 billion SEK per year. Assuming linearity between the inhabitants and the revenue, the Norwegian market would be 440 million SEK. Assuming 20 % of the revenue disappears, that would be 88 million of missed revenue. Assuming average profitability that would imply a drop of EBIT of 17 million SEK.


Summary

I am not too worried about the DNS blocking, after comparing it to the Pirate bay blocking and looking at the potential solutions. It seems like the effect should be limited. But if we want to be conservative, as we do. The effect on the bear case is sketched in the December update would be 17 million SEK for 2022. But I see it more probable that the users already are well aware that the Norwegian government rather want them to play at the state-owned site and that the users will find a way to continue to play where they want to play. I think the payment limitations recently applied had a greater impact and that could barely be noticed in the figures since the Swedish market share was growing at the same time.

Written by: Johan - 2021-12-14