What could new Finnish regulation look like?

In theory, the state-owned gambling monopoly operator Veikkaus has had a monopoly both online and in retail since its formation in 2017. However, at the same time, it has been legal for foreign gambling operators to accept Finnish customers and for Finns to gamble on their sites.

The strict responsible gambling features of the Lotteries Act (1047/2001) only bind Veikkaus, making them uncompetitive in the online market. Veikkaus’ share of the Finnish online gambling market was just 53% in 2022 and is falling at an alarming pace.

Since 2017, Veikkaus has lost a staggering 40% of its overall gross gambling revenue (GGR) with no stop to the trend in sight. As a result, Veikkaus withdrew its support of its own monopoly last autumn, after seeing the benefits of bringing all gambling under the same regulation.

It did not take Veikkaus long to convince the politicians, and now the only questions remaining are when the change will take place and what the new system will look like.

Licensing system seen as the solution

The findings of the preliminary study on the alternatives to the current monopoly system, initiated by the Ministry of the Interior in January, were published on 17 April this year. It was the first time ever that Finland has officially examined the licensing system as an option.

After narrowly winning the general elections, the new conservative government, which is to be formed within the next few weeks, will use the study to draw up the outlines of the gambling policy in the government programme. The study recognises the problems related to the falling channelisation rate and proposes a partial licensing system, covering online casino games and sports betting, as the most viable solution.

The need for a swift change is underlined along with the necessity to prevent gambling-related harm. When it comes to the recommendations of the licensing system characteristics, the study focuses on responsible gambling and harm prevention, while simultaneously stating (several times) that the system must not be too restrictive. Otherwise, there is no incentive to obtain a licence and the main aim of achieving a high channelisation rate would not be achieved.

The outline of the new system

The overall Finnish gambling market is expected to grow with the system change, and taking into consideration the strong digitalisation trend, most of the growth will go to the licensed part of the market. Average customer value is already among the highest in Europe at over €500.

Predictions for the future

The shift to a licensing system is still in its early stages and nothing has been officially decided yet, but here are my predictions regarding some of the key characteristics:

• The most significant influence will come from the Swedish and Danish systems.
• The licensing system will come into force in 2025-26.
• Only online casino games and online sports betting will be included in the licensing system; other verticals will remain under Veikkaus’ monopoly.
• A 20%-25% tax on GGR will be imposed.
• The licence price will be in the region of €50,000 to €75,000 and be valid for five years. The number of licensees will be unlimited.
• A centralised blocking system for problem gamblers akin to Sweden’s self-exclusion register Spelpaus will be introduced.
• A cooling-off period will be implemented (but not as strict or as long as in the Netherlands).
• B2B licensing will be introduced at the same time.
• Cryptocurrencies or playing on debt will not be allowed.
• Notable restrictions will be placed on marketing and advertising, especially towards children and young adults.
• PSP (payment service providers) and DNS (domain name system) blocking will be imposed on unlicensed operators.