Beyond the Finnish monopoly model

Finland’s relationship with gambling is an interesting one. For decades, the state has held a monopoly on land-based and online betting with Veikkaus running the show. However, Finnish players are free to wager at offshore sites if they wish.

And that is something they are doing at scale. Veikkaus itself estimates that around 50% of Finnish players gamble with other brands (meaning more than half of all digital revenues are going abroad) with that percentage continuing to climb at a steady pace.

This, and other factors, has led to the monopoly being brought into question.

In fact, a recent survey of all political parties in Finland found that the majority favoured abolishing the monopoly and regulating and licensing the market so that other brands can operate within the country. The only exception was a small party, which likely wants to learn a little more.

Late last month, The National Coalition Party, which looks set to be the biggest political party in the country in 2023, officially proposed dismantling the gambling monopoly and opening up the market.

This would be a great move for the country and for Finnish players, but also for operators, suppliers and of course affiliates, all of whom have had to tread very carefully around the market, the last gambling monopoly in the European Union, for many years now.

But it has been an interesting journey to this point, and the situation in Finland should be cause for concern for other markets that have, or are considering, adopting the monopoly model.

The downfall of Veikkaus has been brewing for many years but the catalyst was the publication of a well-researched book, Veikkauskratia, at the beginning of 2021. The journalist questioned the partiality of the monopoly and highlighted the challenges it presents, including the risk of corruption.

This led to the Finnish parliament changing how the monopoly was funded, moving profits directly into the government budget instead of allowing Veikkaus to control how and where it was spent. This, combined with the fact that half of all players wager on offshore sites, has finally led to action.

So, what are the benefits of regulating and licensing the market?

Protect more players from gambling harms

The first, and most important, is to lower the rates of problem gambling. Veikkaus undoubtedly does a good job of promoting safe gaming and giving players the tools they need to stay in control of their play, but with half of all players wagering on offshore sites, that puts a large number at risk.

This is why problem gambling rates are often much higher in monopoly markets. In Norway, for example, the problem gambling rate has doubled over the past seven years and is more than four times higher than in Spain or the UK – countries that have open regulated markets.

Indeed, the UK Gambling Commission has just published stats that show it has a historically low problem gambling rate of just 0.2%.

More choice for the Finnish people

Consumers demand choice and that is why so many Finnish people wager on offshore sites. They simply do not like what Veikkaus has to offer and can enjoy a better experience elsewhere.

To be able to offer Finnish players the choice to wager at more gambling brands, but safe in the knowledge they are reputable and responsible by awarding those that meet the required criteria a licence, is absolutely the best way forwards.

This is also good for the Finnish government and the wider economy. Not only do regulation and licensing open up revenue streams in the form of tax, but it also encourages businesses to set up offices in the country which in turn generates investment and also stimulates employment.

And these are businesses that are not just serving the Finnish market, but organisations with a global reach that want to gain access to talent in the country. The igaming industry in particular has a shortage of talent, and regulating a market helps businesses access highly skilled individuals.

Time to invest

Given the legal ambiguity in Finland, there is nothing stopping operators and affiliates from accepting players from the country – they are free to spend their money at the gambling brands they wish to play with. But this should come with a word of caution.

That is why now is the time for operators and affiliates to invest in the market and build up share while they can. Acquisition and marketing will only become more expensive once a market is regulated so now is very much the time to double down on efforts.

But I say that with an air of caution…

Other markets that have embraced regulation, the Netherlands in particular, imposed a cooling-off period on those that were active in the market prior to enabling laws coming into force. This might have handed some advantage to rivals that had not accepted Dutch players prior to that moment.

However, this situation is unlikely in Finland. I imagine that any regulations and licensing requirements will be incredibly similar to Sweden, and there was no cooling-off period there. So as I said, it’s time to put the pedal to the metal.

Joonas Karhu has been a driving force behind Bojoko since it first launched in 2017. As a founding team member, he has helped to establish Bojoko as a leading online casino affiliate brand in the UK, Canada and the US.