Norwegian Lotteries Authority Addresses Gambling and Crypto Pyramid Schemes

Wherever there is an opportunity to make money from something legitimately there will be some bad actors who look to make a quick buck illegally. One of the more commonly known forms of this is the “pyramid scheme”.

Not The Gamble You Want

What has become such a common occurrence in Norway that the government has stepped in to address it, is the practice of offering would-be investors casino and cryptocurrency-based business opportunities.

Senior Lottery Authority lawyer Silje Sægrov Amble said:

“We believe it is important both to stop pyramid schemes and to stop and react against regulars who introduce international pyramid schemes in Norway.”

One of the major concerns with connecting pyramid schemes to gambling and crypto products is that it undoes all the work done by the Gambling Regulator with regards to anti-money laundering, tax evasion and other forms of financial crime.

Protect Your Bankroll

The Norwegian Authority offers a simple test on their website which you can use to determine if the gambling or cryptocurrency investment opportunity you’re being offered qualifies as a pyramid scheme.

Here are the questions they ask and the insights they provide on each:

Does the company have a pyramid structure? By pyramid structure, we mean that the company is built up in several levels where the participants can recruit new participants at a lower level. Does the company have such a structure?
Must you pay to participate? A condition for a company to be considered a pyramid scheme is that you can pay a fee to participate. The consideration can be a fee or a monthly subscription to participate, without you immediately receiving a good or service in return that has the same value.
Do You Make Money Recruiting New Participants? What is special about pyramid companies is that all or a large part of the income in the company comes from recruiting new participants and not profits from the sale of real goods or services.
Where does the income of the individual participant come from? A company engages in pyramid schemes when more than half of the revenue of the individual participant or company (typically commissions and bonuses), mainly comes from recruiting participants.

In short, if the only way you can make money is to bring in other investors after you yourself have had to make a cash investment yourself, you should probably avoid the offer. There is no income being made from sales but from getting new participants to spend money, and existing participants get a portion of this revenue.

Avoid Get Rich Quick Offers

As fans of online gambling know there is no such thing as a real “get rich quick” offer. While some people do get lucky playing Mega Moolah progressive slots or other casino games there is no guarantee that this will be the case.

As we have heard many times “if it sounds too good to be true, it probably is”, with this in mind always read the terms and conditions of any offer, don’t spend more than you can afford to lose and when you’ve had enough, stop!

This is both great advice for dealing with online gambling and for reviewing any other offer where you will be investing your time and money.