Finland to Transition from Gambling State Monopoly

Finland is on the cusp of a dramatic shift in its gambling landscape, transitioning from a monopoly-based system to a competitive licensing structure. The Finnish government's ministerial economic policy committee has charted a course for this change, targeting January 1, 2026, as the official start date for the new market. This aligns with the government's reform goals. Horse race betting, previously monopolized by Veikkaus Oy, will be integrated into the competitive market, accompanied by regulatory reforms to minimize gambling harms.

Under this planned overhaul, specific gambling activities such as horse race betting will no longer hold a monopoly, a decision that has sparked debate among policymakers and industry specialists. Funding for horse racing events, breeding, and related support will shift from monopoly profits to direct state budget allocations. According to the Ministry of the Interior, these funds will support essential services and development initiatives through Hippos ry, the supervisory body of Finland's horse industry. The revised legal framework will permit licensed operators to engage in distinct markets, including electronic betting, casino games, and bingo. At the same time, Veikkaus Oy will continue managing lotteries, physical casinos, and some in-person games.

These changes are aligned with Finland's aims to reduce gambling issues and ensure high channelization, keeping Finnish gamblers engaged with regulated platforms.

Revised Draft Law and Economic Impact

On November 1, the revamped gambling proposal was presented to the European Commission (EC) for a three-month review, during which its compliance with European laws, particularly those concerning the free movement of services, will be assessed. Legal experts have viewed the updated 357-page draft favorably, noting its business-friendly adjustments, such as eased marketing restrictions and some relaxed bonus bans. Antti Koivula, a legal expert on Finnish gaming law, highlighted these revisions as appealing for businesses looking to enter Finland's upcoming competitive market. However, Koivula also mentioned increased costs, specifically the significant rise in the GGR-based annual supervision fee, which could impose additional financial challenges for operators. Although the GGR tax rate remains at 22%, this added fee might influence operator profitability.

Originally scheduled for earlier opening, the competitive market's launch may now occur by July 2026 if licensing processes proceed smoothly. Finland's regulatory approach takes cues from the models in Nordic countries like Denmark and Sweden, which Morten Ronde of Nordic Gambling notes will be familiar to operators already active in those markets. Ronde praised the moderate bonus policy and tax rate as potential strengths in Finland's evolving gambling framework.

Controversies in Marketing Regulations

A notable area of contention in Finland's regulatory overhaul is the management of influencer and affiliate marketing. Finnish iGaming consultant Pasi Koskela pointed out limitations imposed on Veikkaus Oy, which cannot employ influencers for promotions, even without monetary compensation. The proposal allows public figures in Veikkaus advertisements but restricts them from sharing these across personal platforms. Koskela expressed concern that such regulations might inadvertently drive customers towards unregulated gambling sites. He remarked, 'People also won’t suddenly stop googling ‘online casinos’ when the new law takes effect, which means the traffic these affiliates have been directing to somewhat reputable and regulated casinos will now go elsewhere.' Without appropriate oversight, this could lead players towards unregulated sites that lack fair gaming standards or customer protection.

The Finnish government plans to present the finalized proposal to parliament by early 2025, aiming for discussions in the spring session and potential approval by midsummer. The Ministry of the Interior highlighted the plan’s alignment with EU legislation: 'The purpose of the procedure is to get possible feedback from the Commission and other EU member states on the proposal’s consistency with EU legislation and the principles of free movement.' While the government strives for a balanced system, some regulatory details await refinement through secondary legislation. Finland intends to join a broader European trend towards competitive gambling frameworks, with positive industry feedback and adaptation as key indicators of the system's success.

Source: "TFinland’s Gambling System Prepares for Competitive License Market Shift", lcb.org, November 05, 2024.

By GamesAndCasino