It’s time to move from product-based to customer-based thinking

I have written this column for, and Ted Menmuir has edited it. This was, at least for now, the last column I wrote for Lottery Daily.

As lottery operators move to expand their product offerings, Lottery Daily’s Jari Vähänen identifies that too many businesses are stuck on a legacy approach when evaluating their product offerings and customer impacts.

Gambling companies, including lotteries, have traditionally been built based on their specific product groups. The reason for this is the gambling companies’ origins and background, which usually focuses on a particular product area.

As such, lotteries began with the sale of lottery draws, casinos with their games, and horse and sports betting companies with wagering markets. However, over the years, most operators have diversified their operations to other areas to enlarge their business units – hence a product-based organization almost automatically leads to product-based decision-making, which does not produce optimal results for gambling operators.

We often hear gambling companies announce that they are utilizing a ‘customer-based strategy’. In my previous company, Veikkaus, we launched a customer-based business strategy almost twenty years ago, in 2004 – in retrospect, it wasn’t a real customer-oriented strategy, even though we were very serious about it.

The problem then was the inability to adapt to a new way of thinking. Our internal approach emphasized that customer orientation carried a lot of weight, but in reality, the measurement and the control of operations were ultimately still based on the products.

As a business consultant, I have observed several companies’ operations from the sidelines for a few years now. Unfortunately, many seem to be in the same situation as Veikkaus was decades ago. There is a lot of talk about customers, and the aim is to use customer data in all decision-making processes. Yet, in reality, they remain quite far from developing their desired real customer-oriented solutions.

It’s easy to notice, for example, by reading annual reports of lottery operators, in which the reporting continues to be based on sales and GGR of individual products.

When applied, product-based thinking and management can lead to partial optimization, which naturally does not produce optimal results. Worse still goals can be based on product areas or even individual products that generate wrong business decisions that can go unnoticed.

For example, many gambling companies end their customer relationships with winning sports bettors, even though, in some cases, those same customers lose money in other product areas. A customer can be productive for the business. Still, for the manager responsible for betting, the same customer can produce a loss and be defined as a risk regardless of his overall qualities.

These types of negative decisions will cause a decrease in income for the entire company, yet it appears that no one cares about it due to the absence of total customership.

The dominance of online gambling and its compliance duties should see operators have sufficient customer data; thus, a better understanding of customers should be achievable. In addition, several gambling companies have also acquired the necessary resources for processing customer data, but this is not enough if there is no understanding involved in processing customer data.

Customer planning must start from a business case based on the overall data feedback, on which a practical objective and goal setting must be assigned. Of importance, employees do well in what they are rewarded for. Because of this, partial optimization is still far too common.

With the help of management decisions based on customer data, results should outperform standard business practices and improve customer care. These improved outcomes are based on customer-specific offerings, which increase sales and improve customer satisfaction.

In a well-functioning model, the customer does not feel he is faced with sales measures but receives better personal service. With the help of customer data, it is possible to identify players suffering from gambling problems and those who seem to be at risk of getting into harms – and of course, sales and marketing measures should never be aimed at these problematic customer groups.

Lotteries are usually based on lotto games and scratch cards, both of which have a high rate of return. For a long time, the payout percentages of lotto games were around 40%, and they are still around 50-60%.

In a product-based business model, this can lead to the idea that players of other product groups are recognized as worse customers since payout rates of sports and casino games are now more than 90%

However, this kind of thinking causes lotteries to make wrong business decisions, which should be eliminated using customer data.

Lotteries should use a model based on customer data, in which customers are separated into groups according to which product they play the most.

Customer segmentation is therefore based on the primary game product that could be considered the main reason to be a customer. Based on such a straightforward division, it is easy to notice the shortcomings and errors of traditional product-oriented thinking.

The information I have received from lotteries offering multiple products expresses that the value of customers who mainly play betting is many times higher than those who play lotto games as their primary product.

This dynamic should be accounted for when comparing the importance of lotto games and betting products in traditional product-based thinking. Lottery games generate more money for lotteries than compared to sports games. With this kind of thinking, you can end up with a solution where you don’t invest and develop betting products because they generate just a small profit.

The worst scenario is that your solution transfers profitable players to your competition… I can’t tell the concrete figures of any lottery, but I dare to give one example because the information is already so old.

Fifteen years ago, Veikkaus ran two large pool-based horse betting products in Finland. At the same time, Fintoto, a company focused on horse betting, wanted those games. The decision-makers wondered why Veikkaus opposed that move, even though Veikkaus’ annual profit from horse betting was around 10 million euros, only about 1% of the company’s profit.

At that time, we already had customer data available. We noticed that the total revenue for Veikkaus from customers who primarily play horse betting was 6–7 times bigger than the money collected from horse betting alone. We were afraid of losing the customers who were valuable to us.

This granular understanding is available to all gambling companies with modern data systems, so use them to develop your overall business, as benefits are tangible and long-standing.

Happy New Year!

I have written this text initially for, and Charlie Horner has partly edited it.

In the last three years, the world has suffered from significant problems. First, Covid-19 messed up the world, and when we were getting over it, Russia started a war in Ukraine. The war continues and causes great harm in Ukraine and other parts of the world. The world economy is threatened by a particularly embarrassing problem, stagflation, against which no effective “medicine” has been developed. In any case, inflation is at an exceptionally high level, and on top of that, there is a risk that the economy will plunge into recession.

Along with others, the gambling industry has also suffered from these global problems. The Covid-19 pandemic caused the biggest problems for gambling companies operating in the retail channel and for operators focused on sports betting. The retail channel still makes up a substantial share of the lotteries’ business, so lotteries were in big trouble in 2020 and 2021. Due to competition law reasons, the lotteries’ financial data for 2021 will be published now, and we have to wait for the data for 2022 until the end of 2023. So, unfortunately, accurate information about the lottery business’s current state is unavailable.

In any case, it seems that lotteries have recovered from the effects of Covid-19 and gotten their business back on track for growth. The difficulties in the retail business have accelerated the transition to digital sales, which will certainly increase the companies’ competitiveness. In this case, adversity has ultimately been beneficial.

In these lottery columns, I have tried to highlight areas of development where lotteries should invest more than they currently do. Recently, it has been great to notice that lotteries have been ready to change their operations and invest in finding new innovative solutions. The basis of the operation is still lottery games and highly responsible operations, but these things have been managed to be implemented even better by utilizing modern technologies.

However, there are new challenges ahead. The difficulties of the world economy cause problems for everyone. In addition, lotteries have found themselves in a situation where people’s attitudes towards gambling have turned in a more negative direction. As a result, politicians and regulators limit the visibility and marketing of gambling more than before. The risk might even be a total marketing ban on gambling, as has already happened in Italy. In any case, gambling companies, including lotteries, must find new ways to maintain and increase customer interest in gambling without the support of mass media marketing.

Lotteries face more and more competition not only from other gambling operators but also from other gaming companies. Because of this, lotteries must keep up with development and utilize the possibilities of technology better than at present. We have to be present in the devices that customers use anyway. Although the transition from the retail channel to digital sales has started at a good pace, it is no longer enough because digital development is moving forward rapidly and brings new ways of playing and entertainment to the market, which lotteries must also respond to.

The key to future success is understanding the competitive situation through the eyes of the customer. So what options are available, i.e., who are the lotteries competing against for the popularity of their customers? Companies must know the most significant consumer trends for this understanding to emerge. So it’s no longer enough to know where the development is at the moment; we also have to know how to look ahead. This still requires a significant change in the lotteries’ way of thinking, which was based on their “own bubble” and defending their own position for a long time. A successful company must constantly be able to develop its products and services to maintain customer interest.

Lotteries still have the challenge of arousing the interest of young consumers in lottery games, and why not also in other gambling products. The social importance of lotteries is probably no longer as familiar to young people as it is to us, who are a little older and hardly faced any other gambling companies besides lotteries in our youth. In addition to emphasizing the social role, supporting beneficiaries, and running responsible activities, lotteries must also be present in young people’s everyday lives. Therefore, monitoring and utilizing consumption trends is critical from a business perspective.

Being at the forefront of technological development usually costs a lot. Because of this, it probably makes economic sense for lotteries not to try to develop new solutions first. Instead, a good course of action is to monitor developments actively and acquire technology partners who can react quickly enough when a new technology begins to reach a level considered to be something of general use. The utilization of machine learning and AI is already starting to be at this level, so they should already be at least on the active planning table of lotteries. Virtual reality and metaverse are emerging technology trends we must prepare for soon. However, it must be remembered that simply offering technology is not enough; the content must also be relevant and exciting to customers.

In my own “crystal ball”, 2023 seems to be full of possibilities from lotteries’ perspective. The companies have sufficient resources and know-how to succeed in the ever-increasing competition for customers’ money and interest. Now you need to increase your understanding and courage to join the competition. It is excellent to note that, for example, European Lotteries actively organizes development-oriented seminars for its member companies, with well-known speakers from other business sectors as well. This kind of information sharing certainly promotes the development and improvement of member lotteries’ business.

Good luck and success in the upcoming challenges to all my lottery friends!

Suomen rahapelijärjestelmä-keskustelutilaisuus

Perustimme yhdessä juristi Minna Ripatin kanssa jo noin vuosi sitten Suomalaisen Rahapeliyhdistys ry:n, mutta emme oikein saaneet aikaiseksi sen tuon yhdistyksen toiminnan aktivointia. Yhdistyksellä on kyllä nettisivut , mutta ainakin toistaiseksi niiden sisältö on hyvin vähäistä. Nyt kuitenkin ryhdistäydyimme ja saimme järjestettyä keskiviikkona 30.11. keskustelutilaisuuden suomalaisen rahapelijärjestelmä nykyitilasta ja tulevaisuudesta. Tässä tekstissä on omia nostojani tilaisuuden puheenvuoroista.

Jarmo Kumpulainen, Veikkaus: Rahapelijärjestelmästä keskusteltaessa ei pidä keskittyä vain kiistelemään siitä, onko lisenssijärjestelmä parempi kuin monopoli. Sen sijaan pitää keskittyä miettimään, miten rahapelijärjestelmällä saadaan luotua mahdollisimman hyvä kokonaisuus vastuullisen pelaamisen ja rahapeleihin liittyvien taloudellisten asioiden välille. Mahdollisella järjestelmän muutoksella on saatava kanavointiaste mahdollisimman korkeaksi, jotta pelaaminen pysyy viranomaisten säätelyn piirissä. Veikkauksen markkinaosuuden kehitys on huolestuttava. Veikkauksen pelikate on pudonnut kuudessa vuodessa 1,8 miljardista eurosta 1,1 miljardin euron tasolle. Samalla yhtiön markkinaosuus on laskenut 67 %, ja digikanavissa tapahtuvassa pelaamisessa noin 50 prosenttiin. Rahapelijärjestelmän muutoksen valmistelu on saatava käyntiin nopeasti. Suomeen on kuitenkin pystyttävä luomaan meille parhaiten sopiva oma rahapelimalli, eikä siis suoraan kopiota esimerkiksi Ruotsin järjestelmästä.

Sverker Skogberg, PAF: PAF on ilmoittanut jo melko pitkään kannattavansa Suomen siirtymistä rahapelien monopolimallista lisenssijärjestelmään, vaikka yhtiön oman arvion mukaan sen tuotto tulee lyhyellä tähtäimellä laskemaan tämän muutoksen seurauksena. Tärkeitä asioita Suomen rahapelijärjestelmässä ovat mm. korkea kanavointiaste ja valtakunnalliset tappio- ja talletusrajat. PAF:lla on kokemusta lisenssimarkkinoilla toimimisesta. Yhtiö on ollut alusta alkaen mukana Ruotsin vuoden 2019 avautuneilla markkinoilla. Ruotsin markkinaa kannattaa analysoida huolella. Skogbergin mukaan Ruotsin rahapelijärjestelmässä hyvin toimivia asioita ovat mm. verotus (verotulot ovat kasvaneet), valtionyhtiöiden Svenska Spelin ja ATG:n menestyminen, valvovan viranomaisen Spellinspektionen toiminta sekä valtakunnallinen vastuullisuusjärjestelmä Spelpaus, jolla asiakas voi estää itseltään kaiken rahapelaamisen. Kaikki ei kuitenkaan ole Ruotsissa täydellistä, sillä markkinointisäännökset ovat epäselvät ja B2B-lisenssi olisi pitänyt ottaa käyttöön heti järjestelmän muutoksen yhteydessä.

Riitta Matilainen, EHYT: Tämän hetken rahapelihaittojen tilanteesta ei ole tarkkaa tietoa. Viimeisen valtakunnallinen peliongelmatutkimus on tehty vuonna 2019 ja THL:n seuraava tutkimus toteutetaan ensi vuoden aikana ja sen tuloksien saanti kestänee vuoden 2024 puolelle. Peliongelmien kehitys kuitenkin seurataan koko ajan, ja nyt näyttää siltä, että vakavia ongelmia on aiempaa enemmän. Perinteisesti paljon ongelmia aiheuttaneiden raha-automaattien määrää on vähennetty merkittävästi, minkä ansiosta niiden aiheuttamat haitat ovat vähentyneet. Valitettavasti online kasinojen, nopearytmisen vedonlyönnin ja jonkin verran kryptovaluuttakaupan aiheuttamat ongelmat ovat lisääntyneet. Mikä tahansa tuleva rahapelijärjestelmä on, niin olisi tärkeää, että myös seuraavassa hallitusohjelmassa olisi erillinen rahapelihaittaohjelma.

Rahapelihaittojen näkökulmasta siirtymisellä lisenssijärjestelmään on sekä positiivisia että negatiivisia vaikutuksia. Oletettavaa on, että lisenssijärjestelmän myötä sekä rahapelien tarjonta että markkinointi lisääntyy, mikä voi lisätä peliongelmien määrää. Toisaalta kanavointiasteen nouseminen mahdollistaa pelaamista koskevien rajoitusten nykyistä paremman tehokkuuden. Rahapelijärjestelmän muutoksen valmistelu tulee tehdä huolellisesti. Haittojen ehkäisyn näkökulmasta lisenssimallissa tulee olla käytössä rahapelihaittoja vähentäviä tekijöitä, markkinoinnin volyymin säätelyä, vastuulliseen pelaamiseen liittyviä pelirajoja, veroasteen optimointi, ja riittävästi lisäresursseja viranomaistoimintaan.

Aki Pyysing, Suomen Pokerinpelaajat: Rahapelijärjestelmän muutos pitää toteuttaa nopeasti. Tärkeää on, että valmistelussa kuunnellaan asiantuntijoita ennen päätöksentekoa, eikä vasta sen jälkeen niin kuin tapahtui nykyisen lain valmistelussa. Lisenssijärjestelmän ehtojen tulee olla sellaiset, että peliyhtiöitä kiinnostaa hakea Suomen rahapelilisenssiä. Huonojen ehtojen, esimerkiksi liian korkea veroaste, seurauksena voi olla kanavointiasteen jääminen edelleen alhaiseksi. Uudessa järjestelmässä ei välttämättä tarvita markkinointirajoituksia, ja blokeerauksen tulee välttää kokonaan, koska ne eivät kuulu länsimaiseen ideologiaan. Paljon peliongelmia aiheuttavat raha-automaatit pitää poistaa kokonaan avoimista paikoista ja siirtää varta vasten pelaamista varten tarkoitettuihin suljettuihin tiloihin.

Kari Rajainmäki, Suomen Urheiluvedonlyöjät: Lisenssijärjestelmän vaikutusarvioinnit olisi pitänyt jo tehdä. Muutoksella on kiire, eikä valmistelu saa viedä liian kauan. Hyvin toimivassa rahapelijärjestelmässä asiakkailla ei ole tarvetta pelata järjestelmän ulkopuolisille yhtiöille, koska järjestelmän sisällä tarjonnan laatu ja monipuolisuus ovat riittävän hyvät. Hyvässä rahapelijärjestelmässä ei tarvita blokeerauksia, veroaste ei ole liian korkea, ja pelivolyymi on riittävä suuri, jotta myös ammattimainen pelaaminen on mahdollista.

Asiantuntijoiden puheenvuorojen jälkeen äänessä olivat kansanedustajat, jotka kommentoivat kuultuja puheenvuoroja ja esittivät omia ajatuksiaan mahdollisesta rahapelijärjestelmän muutoksesta. Merja Kyllönen, Vasemmistoliitto, totesi, että rahapelijärjestelmän muutos on mahdollinen, mutta se analysoitava todella tarkasti. Valmistelua ei saa tehdä liian kiireellä, jotta asiassa ei tehtäisi virheitä. Muutoksen valmistelussa on myös noudatettava parlamentarismin periaatteita. Sinuhe Wallinheimo, Kokoomus, kertoi, että hänen puolueensa kannattaa siirtymistä lisenssijärjestelmään. Kokoomus on ollut yhteydessä SDP:hen ja pyytänyt pääministerin kansliaa asettamaan rahapelijärjestelmän valmisteluun virkamiestyöryhmän mahdollisimman pian, jotta aikataulua saataisiin kiristettyä. Wallinheimo arvioi, että lisenssipohjainen järjestelmä voisi olla nopeimmillaan voimassa vuonna 2025 ja viimeistään vuoden 2026 alusta alkaen.

Marko Asell, SDP, myönsi kannattaneensa vankasti Veikkauksen monopolia, mutta tämän vuoden aikana tulleet uudet tiedot mm. Veikkauksen tuoton ja markkinaosuuden laskusta ovat aiheuttaneet sen, että myös demarit ovat valmiita aloittamaan selvitystyön rahapelijärjestelmän muuttamisesta. Asell ei kuitenkaan tiennyt tai halunnut arvioida muutoksen nopeutta eikä sitä, asettaako nykyinen hallitus valmisteluryhmän vai siirtyykö tämä eduskuntavaalien jälkeiseen aikaan. Pasi Kivisaari, Keskusta, korosti, että hyvässä rahapelijärjestelmässä peliyhtiöillä on oltava mahdollisuus hyvään liiketoimintaan, mutta silti vastuullisuusvaatimuksista ei pidä luopua. Tärkeää on löytää hyvä balanssi näiden kahden asian välille, eikä jompaakumpaa saa ylikorostaa. Kivisaari piti tärkeänä Veikkauksen edunsaajien aseman turvaamista, mutta totesi, ettei tällä asialla ole enää tekemistä uuden rahapelijärjestelmän valmistelussa, koska jatkossa edunsaajien avustukset tulevat valtion budjetista.

Lotteries don’t have to do everything by themselves

I have written this text for, and Nick Ware has partly edited it.

Almost all lottery companies have started their operations with a monopoly position. Because of this, the cost-effective operation has traditionally not been at the top of the companies’ priority list. Lotteries are usually owned by states, and the operating culture has been similar to state agencies. Instead of actively developing operations, the main focus has been securing operational operations continuity.

Over the years, the situation has changed for the better, but the background described above still affects the operation of lotteries. An inefficient corporate culture focused on protecting one’s position is not the best strategy to succeed in a competitive market, where you are faced with companies operating on purely commercial principles. I believe that lotteries have understood the need for change, but the risk is that they focus on fixing individual issues and not on changing the entire corporate culture and mindset.

It has been proven in economics that a monopoly always causes operational inefficiency. Unfortunately, lottery executives have typically refused to believe this. They have shown high productivity numbers to prove to stakeholders that lotteries are far more efficient than cash-minded private gambling companies. In this argumentation, it has been ‘forgotten’ to say that the numbers of a lotto operation with a 40-50% payout cannot be compared to the numbers of a casino operation with a 95% payout – at least not if it is a question of comparing the efficiency of the operation.

State ownership and state office-like operations have increased the bureaucracy of lotteries. This can be seen from the slowness of decision-making which, in turn, prevents timely and quick reactions to the changing situation. The slow rate of change in lotteries practically did not hinder productive operations as long as customers did not have other gambling options available. Today, customers are quick to vote with their feet if a company is unable to offer new products that other companies have. Lotteries’ luck is still the practical monopoly of lotto games, but on the other hand, this same reason slows down companies’ willingness to change – this can cause significant problems for lotteries in the long run.

Updating the strategy every five to ten years, and acting according to long-term plans, annual action plans, budgets, fixed organizations and job descriptions, etc., are no longer enough in today’s fast-paced business. Nevertheless, such an operating model is still prevalent in many lotteries. It may even sound funny when the explanation is that something cannot be done now because it is not in this year’s action plan, and no money has been allocated for it. However, the speed of reaction to changing situations should be completely different, but the bureaucratic operating model often prevents it.

On top of all that, due to their monopoly position, lotteries have had no reason to think about the impact of other companies’ activities on their own. Lotteries have not needed to try to stay at the forefront of development; often, such an operating model has even been perceived as irresponsible. So, the goal has not been to bring things to the market first, not to innovate new products and services, not to offer customers excellent service, or anything else to be at the forefront of development. Lotteries have mainly compared their operations to the operations and results of other lottery companies, although they have not represented the world’s most developed gambling companies.

Avoiding mistakes has been the general guideline for official behavior. Civil servants are rarely rewarded for successes, but instead, failures cause problems. This kind of corporate culture means it’s not worth investing in developing something new because you don’t get praise for it, only barking when you fail. Because of this, lotteries have often introduced new products and services only after they have been proven to work elsewhere. This operating model helps the companies to keep up with the development, but by no means to gain a competitive advantage compared to others.

Lotteries are used to doing everything themselves, and outsourcing operations have rarely been used, especially in Europe. In addition, lotteries are used to buy the technology they use for themselves. US lotteries have deviated from this significantly because almost all of them have outsourced their technology functions to large suppliers, and the contracts have been based on a revenue share model. In recent years, European lotteries have had to change their operating models because it has become more difficult to buy technology, as suppliers have no longer agreed to enter into agreements other than those based on revenue sharing.

As I have often stated before, lotteries today are a very heterogeneous group of companies whose operating methods and strategic choices differ from each other. Fortunately, an increasing number of lotteries have developed their operations, and the business operations of these companies already resemble real business enterprises. As operations develop, lotteries can succeed in competitive markets without the protection of a monopoly.

Modern companies know how to use external resources well, which helps avoid unnecessary increases in fixed costs. Such an operating model makes sense in sizeable one-off development projects. Typically, companies also use external help in big change situations, such as when legislation changes (transition from a monopoly to a license-based model) and business expansion (new product verticals alongside lottery games).

Based on my almost three years of consulting experience, it has been noticeable that lotteries use us, gambling industry consultants, much less than other gambling companies and technology suppliers. I think lotteries are not yet familiar enough with the services we can provide them. An exciting and valuable model for lotteries could be the consulting networks developed for the gambling industry, which can provide cost-effective and professional services for large development projects. An example of such a network is Way2Go, whose consultants focus on helping the lottery world. Using external help in significant change situations would undoubtedly improve the competitiveness of lotteries. Not all know-how should be acquired within the company.

Monopolin loppu

Julkaisin tämän tekstin jo englanniksi, mutta tässä on vielä suomenkielinen versiokin, koska asian luulisi kiinnostavan erityisesti suomalaisia lukijoita.

Kotimaani, Suomi, on Norjan lisäksi ainoa läntisen Euroopan maa, jossa vielä koko rahapelitoiminta perustuu monopolijärjestelmään. Joitakin vuosia sitten Norjassa harkittiin vakavasti järjestelmän muuttamista, mutta lopulta maa päätyikin päinvastaiseen ratkaisuun ja alkoi vain vahvistaa yksinoikeusjärjestelmää. Suomi päätyi samaan ratkaisuun, jonka seurauksena mm. aiemmat kolme rahapeliyhtiötä yhdistettiin yhdeksi monopoliyhtiöksi. Tuo uusi yhtiö, Veikkaus, on nyt toiminut pian kuusi vuotta, ja tulokset ovat olleet kaikkea muuta kuin toivottuja.

Mikä monopolijärjestelmässä on vikana ja mitkä ovat epäonnistumisen syyt Suomessa? Ensin on syytä selittää muutama perusasia.

Yleinen tosiasia on, että monopoli vähentää liiketoimintaa, koska markkinatalous ei pääse toimimaan parhaalla mahdollisella tavalla. Monopoli siis aiheuttaa tehottomuutta, jota itse asiassa on pidetty rahapeliliiketoiminnan kontrolloinnissa hyvänä asiana. Rahapelaaminen on liiketoiminta, joka monen maan lainsäädännön mukaan on ollut lähtökohtaisesti kiellettyä, ja jonka valtio on sitten poikkeusluvalla antanut jonkun yhtiön hoidettavaksi. Perusajatuksena on ollut rajoittaa toimintaa merkittävästi ja näin suojella ihmisiä rahapelaamisen lieveilmiöiltä. Tällainen toiminta tuotti tuloksia tilanteessa, jossa liiketoimintaa tehtiin vain asiamieskanavassa, mutta internetin myötä tilanne muuttui radikaalisti.

Yleisesti ajatellaan, että rahapeliliiketoiminnan tekeminen ja vastuullinen toiminta ovat toisiaan poissulkevia asioita. Tämä on lähtökohtaisesti virheellinen ajatusmalli. Rahapelien myynnin suuruudella ja peliongelmien määrällä ei ole suoraa korrelaatiota keskenään. Lisääntynyt rahapelien myynti ei automaattisesti lisää pelaamisesta aiheutuvien ongelmien määrää. Rahapelaamisen estämiseen pyrkivät vastuullisuustoimenpiteet eivät ole paras mahdollinen tapa peliongelmien ehkäisemiseen. Ongelmia pitää ehdottomasti pyrkiä vähentämään, mutta sitä varten on oltava tehokkaampia välineitä kuin pelaamisen vaikeuttaminen.

Perusajatus siitä, että monopoli itsessään ehkäisee peliongelmien syntymistä, on totaalisen väärä. Jos tuo oletus pitäisi paikkaansa, pitäisi Norjassa ja Suomessa olla vähiten peliongelmia koko Euroopassa. Näin ei kuitenkaan ole, vaan tilanne on jopa päinvastainen.

Yleisellä tasolla väärät oletukset aiheuttavat virheellisiä toimintamalleja ja epärealistisia tavoitteita. Hyvän rahapelijärjestelmän toimivuus ei riipu siitä, onko järjestelmä monopoli- vai lisenssipohjainen. Uskon, että monopoli voi olla hyvä malli, mutta se vaatii toimiakseen erinomaisen regulaation, joka ymmärtää liiketoiminnan perusedellytykset oikein. Pelkkä toiminnan rajoittaminen vie järjestelmältä sen legitimiteetin asiakkaiden silmissä. Tällaisessa tilanteessa viralliset rajoitukset eivät enää toimi. Aivan vastaavasti lisenssipohjainen järjestelmä voi aiheuttaa turhia ongelmia, jos regulaatio ei ole ajan tasalla.

Mikä Suomessa on mennyt pieleen? Olen tässä asiassa hieman jäävi, koska olin itse vahvasti mukana suunnittelemassa monopoliyhtiön toimintaa, kun uusi Veikkaus aloitti vuoden 2017 alussa. Uskon silti, että pystyn analysoimaan virheitä riittävän neutraalisti, varsinkin kun olen nyt ollut jo 2,5 vuotta pois yhtiön toiminnasta.

Suomessa valtio pyrki suojaamaan monopoliin perustuvaa rahapelijärjestelmää, kun se päätti yhdistää aiemmat kolme yhtiötä (Fintoto, RAY ja Veikkaus) yhdeksi yhtiöksi. Tavoitteena oli mahdollistaa tehokkaampi liiketoiminta, kun ei enää tarvinnut ehkäistä suomalaisten yhtiöiden keskinäistä kilpailua. Oletuksena oli siis lisääntyvät rahapelituotot ja tyytyväiset asiakkaat, jotka saavat kansainvälisen tason tuotteet ja palvelut omasta yhtiöstään. Yhden yhtiön mallin uskottiin myös auttavan rahapeliongelmien ehkäisemisessä, koska asiakkaiden kokonaispelaamista ja siitä aiheutuvia haittoja voidaan seurata yhdestä järjestelmästä.

Vuoden 2017 alusta voimaan tulleessa Arpajaislaissa painotettiin vahvasti vastuullista pelaamista. Lakitekstissä todettiin, että Veikkauksen tehtävänä on rahapelihaittojen ehkäiseminen. Itse asiassa tämä oli lain mukaan peliyhtiön ainoa tehtävä! Muutoksen yhteydessä puhutuista kahdesta muusta isosta tavoitteesta, kilpailukykyinen tarjoama ja tuottotason maltillinen kasvattaminen, ei laissa mainittu sanaakaan.

Uudella Veikkauksella on ollut alusta alkaen vaikeuksia saada lupia uusiin tuotteisiin ja palveluihin. Samaan aikaan kansainväliset rahapeliyhtiöt ovat jatkaneet tuote- ja palvelukehitystään, jonka tulokset ovat olleet helposti suomalaisten asiakkaiden saatavissa internetin ja mobiilikanavan kautta. Vaikka offshore-yhtiöt eivät ole saaneet markkinoida Suomessa, niin tieto yhtiöistä on levinnyt laajalle, ja yhä suurempi osa suomalaista pelaa rahapelejä muille yhtiöille kuin Veikkaukselle. Aiemmin hyvin kanavointitehtävästään huolehtinut Veikkaus on pudonnut rahapelimaailman kehityksen kärkijoukosta. Tämän vuoksi suomalaiset rahapelien aktiiviset pelaajat ovat siirtyneet muiden yhtiöiden asiakkaiksi.

Tilanne on eskaloitunut pikkuhiljaa. Veikkauksen myynti ja pelikate ovat laskeneet yhtiön jokaisena toimintavuotena. Veikkauksen pelikate oli noin 1,8 miljardia euroa, kun yhtiö aloitti toimintansa. Tämän vuoden ennusteen mukaan pelikate on noin 1,0–1,1 miljardia. Pudotusta on tapahtunut kuuden vuoden aikana noin 40 prosenttia! Veikkauksen markkinaosuus kaikesta Suomessa tapahtuvasta rahapelaamisesta oli 90 % tasolla, mutta nyt se on enää noin 2/3. Digitaalisissa kanavissa tapahtuvasta rahapelaamisesta Veikkauksen hallussa on vain 50 %, kun se kuusi vuotta sitten oli vielä noin 73 %. Surkein tilanne on erityisen kilpailluilla alueilla, kiinteäkertoimisessa vedonlyönnissä ja online kasinopeleissä, joissa Veikkauksen markkinaosuus on vain noin kolmasosa. Tämä siis tilanteessa, jossa Suomi kiristi edelleen rahapelilainsäädäntöä vuoden 2022 alusta alkaen ja vaikeutti lisää offshore-yhtiöiden toimintaa.

Surkea liiketoiminnallinen tilanne voisi olla perusteltua edes jollain tavalla, jos päätavoitteeksi asetettu rahapelihaittojen vähentäminen olisi toteutunut. Edellinen valtakunnan tason rahapeliongelmatutkimus tehtiin vuonna 2019. Tuolloin havaittiin, että rahapeliongelmien kokonaistasossa ei ollut tapahtunut merkittävää muutosta. Sen sijaan vakavista ongelmista kärsivien pelaajien määrä oli kasvanut jonkin verran. Vuoden 2019 jälkeen Veikkauksen pelien myynti ja pelikate ovat romahtaneet. Valitettavasti joudumme odottamaan vähintään vuoden ajan ennen kuin tiedämme, miten tämä on vaikuttanut peliongelmien määrään. Seuraava valtakunnan tason tutkimus tehdään ensi vuonna, ja tulokset lienevät selvillä 2024 alkupuolella. Veikkauksen omien pienimuotoisten tutkimusten mukaan peliongelmat ovat laskeneet jonkin verran, mutta erityisen suurta muutosta ei näyttäisi tapahtuneen.

Veikkaus ei saa kehittää liiketoimintaansa ja samaan aikaan peliongelmien määrässä ei näytä tapahtuvan toivottua kehitystä. Tiukentuneiden vastuullisuusvaatimusten, mm. pakollinen tunnistautuminen ja tiukat tappiorajat, seurauksena pelaaminen Veikkaukselle on vaikeutunut. Tämän seurauksena asiakkaat ovat siirtäneet pelaamistaan yhä enemmän muille yhtiöille. Suomalaisten kokonaispelaaminen näyttää olevan koronaepidemian jälkeen hieman kasvussa, mutta samaan aikaan Veikkauksen pelikate jatkaa kovaa laskua. Uusi tiukempi monopolilainsäädäntö näyttää siis ajavan asiakkaita offshore-yhtiöille. Rahat valuvat Suomen ulkopuolelle, asiakkaat eivät enää ole Suomen viranomaisten valvonnassa, ja peliongelmien määrä ei alene.

Tilanne ei voi jatkua näin ja nyt on kaikkien kannalta parempi muuttaa Suomen rahapelijärjestelmää. Tämä mielipide kuultiin Veikkauksen toimitusjohtajalta elokuussa, kun yhtiö kertoi H1/2022 tuloksestaan. Veikkaus siis ilmoitti itse, ettei se enää koe järkeväksi jatkaa monopoliyhtiönä ainakaan kilpailluilla rahapelitoiminnan alueilla. Vastaava monopoliyhtiön ilmoitus johti nopeaa rahapelijärjestelmän muutokseen sekä Tanskassa että Ruotsissa. Poliittisten puolueiden kommenteista päätellen näin tulee tapahtumaan myös Suomessa ensi vuonna pidettävien eduskuntavaalien jälkeen.

Kukaan ei vielä tarkalleen tiedä, minkälainen Suomen uusi rahapelijärjestelmä tulee olemaan ja milloin se tulee voimaan. Yritän parhaani mukaan auttaa poliittisia päättäjiä suunnittelemaan Suomelle parhaan mahdollisen mallin, jossa lainsäädäntö ja regulaatio pohjautuvat rahapeliliiketoiminnan kokonaisvaltaiseen ymmärtämiseen. Uskon, että uusi paljon parempi lainsäädäntö saadaan Suomessa voimaan 2–4 vuoden sisällä.

How can lotteries leverage their scale in sports betting?

I have written this column for, and they have partly edited it.

Across the globe, state lotteries have opportunities to move into sports betting, but doing so will create new challenges that only a few may be capable of addressing. How can they go about creating a thriving sportsbook?

On a global scale, lotteries are a diverse group of companies. There are huge differences between the operators, with very few unifying features. 

Broadly speaking, their exclusive right to run lottery games is the common thing that binds them. Yet when looking at the World Lottery Association’s membership, not all companies even have this monopoly position. However, in this article, I will focus on lottery companies that operate at scale, namely state lotteries.

Lotteries as a monopoly

The term “state lotteries” refers to the fact that these companies were originally under the direct control of the state and sold lottery games. Most lotteries originally sold scratch cards and Lotto (or draw-based games). It is only in the past three decades that these businesses have started to expand their product portfolios into new verticals, such as sports betting. 

Many lotteries have joined the sports betting business in the 21st century, but there are also companies in the “lottery family” whose origins actually lie in sports games. For example, all Nordic lotteries started in sports. As a result, the role of sports games in lotteries varies greatly.

The sweeping changes in gambling legislation in the US market have prompted discussions over how lotteries should react to, for example, online gambling and the possibility of launching sports games alongside scratch cards and Lotto. 

So far, there’s little commonality between different US states’ solutions to this conundrum. In many cases, US lotteries have ended up launching operations in digital channels and entering the betting vertical.

Is sports betting worthwhile for lotteries?

Is it worth lotteries joining the competition in the sports betting market? There are plenty of examples of lottery companies making a success of sports betting, even though they do not have a monopoly in that vertical. 

For example, in Europe, Greece’s OPAP and France’s La Française des Jeux (FDJ) are among the biggest operators in their respective sportsbook markets. Nordic lotteries also enjoy a significant share of their countries’ sports betting market, as do state lottery companies in Israel, Italy, Portugal, Spain, and Switzerland.

In principle, lotteries can be successful in competitive markets. Success, however, requires solutions that differentiate an operator from the competition, and you cannot be particularly successful by offering the same product as others. 

In addition, lotteries cannot compete on price by tweaking payout percentages, meaning their products are traditionally weaker than those on offer elsewhere in the market. This is hardly a good starting point for success.

Cross-sector collaborations

In gambling, as with all industries, a company looking to compete must have at least one advantage over its rivals.

Lotteries have been successful in lottery games, of course, with the help of their monopoly position. And though they do not enjoy the same status when it comes to sports betting, thanks to their lottery monopoly, these businesses already have a large customer base that knows the company and values its operations. 

This appreciation and trust can also be used in other product areas.

The most significant reason why lottery games are so popular is the size of the jackpots, which other gambling companies cannot offer. Lotteries have harnessed their large customer bases and launched games with prizes stretching into the tens of millions. 

Lotteries already understood 20 years ago that there is strength in cooperation. The companies operating in their jurisdictions do not compete with each other, making cross-sector collaboration relatively straightforward. 

Together, lotteries leveraged their strength even further to offer jackpots far larger than they could provide alone. EuroMillions and Eurojackpot games in Europe and the Mega Millions and Powerball games in the US were born as a result.

Taking cross-sector collaboration into sports betting

Lotteries could have the opportunity to collaborate in sports betting as well. However, a few things need to be clarified here. There are two product groups in betting: fixed-odds and pool-based (totalizator) games. 

In the fixed-odds game, customers play against the company, and, in that game, the company has a slight advantage of scale. 

The best example of a pool-based game is Lotto. A large number of customers participate in the game, the company gets a risk-free share of the sales, and the winning customers share the rest of the money among themselves. 

In a pool-based game, economies of scale work very well, and lotteries should focus on this.

Sportsbooks, with a few minor exceptions, only offer fixed-odds betting. On the other hand, horse race betting operators use pool-based betting in several countries, including the US. 

Thanks to this – and, of course, the lottery games – most customers know the principles of pool-based (pari-mutuel) betting. Even if the products in question are not as familiar to a fixed-odds consumer, they could still be a commercial success for lotteries. 

In this area, lotteries could also further leverage collaboration, similar to Euromillions or Powerball, to offer a product that other companies would not be able to match.

In Europe, pool betting is already common, especially in Nordic countries. And it’s already prevalent in lotteries – before the Covid-19 pandemic, about 10% of sales for European Lotteries’ (EL) members came from pool betting, with 17% from fixed odds. 

While its contribution in terms of revenue is smaller, pool betting is robust in my home country Finland, Sweden, and Norway. Spain’s SELAE and France’s FDJ also offer reasonably large pool-based games, while the UK’s football pools remain popular. 

The fixed-odds conundrum

It could therefore be possible to develop pool betting into a unique product for lotteries – a kind of sports jackpot game where customers’ primary motivation for playing is the opportunity to win a lot of money from a small bet. 

From the lottery’s point of view, it is positive that large winnings do not raise the prospect of financial risk as big fixed-odds wins would. In addition, the payout percentages of football pools, or similar games, are much lower than for fixed-odds betting.

Yet most lotteries currently offering sports betting use fixed odds. The competition in this area is particularly fierce – there are thousands of competitors doing the same. 

The profit margins for fixed odds are small, and there are plenty of profit seekers. Gambling companies offer the same matches and markets, and the number of betting events has grown exponentially in recent years. 

In the past, there were only a few betting options available for a single match, but nowadays, you can bet on hundreds of different outcomes within one match. 

All this has not significantly increased revenue from fixed-odds betting. In addition, the large number of betting opportunities often makes betting too complicated for the average sports fan. 

Active bettors are a different matter, but their number is relatively small compared to the lotteries’ customer base.

One option for lotteries could be to innovate with a simplified fixed-odds offering, one that an ordinary lottery consumer could easily understand with interest in sports. 

Successful products, it should be noted, tend to be the ones that are the simplest to use. Lotteries could whittle down the markets to the most significant sporting events each day, from which only a couple of betting markets would be made available. 

Going live

While in-play betting has expanded the range of markets offered, around 90% of stakes are placed on the winner and the final result. Lotteries could use this same idea more widely for that simplified fixed-odds product.

My purpose is not to tell lotteries what to do in the betting business but to highlight the opportunities on offer. Companies must first recognize their strengths and try to find ways to leverage them if they succeed in sports betting. 

And it seems those strengths are the power of their brand, their broad customer base, and the ease of cross-sector collaboration. 

On this basis, it is possible to develop betting products suitable for the unique operating conditions that lotteries face while maintaining that mass market appeal. Let’s face it: doing things differently but keeping it simple is a good principle for developing innovative activities.

The end of the monopoly

I have written this text for, and Charlie Horner has edited it.

Besides Norway, my home country, Finland, is the only country in western Europe where the entire gambling business is still based on a monopoly system. Some years ago, Norway seriously considered changing the system, but in the end, the country ended up with the opposite solution and only started strengthening the monopoly system. Finland reached the same solution, as a result of which the previous three gambling companies were merged into one monopoly company. That new company, Veikkaus, has been operating for almost six years, and the results have been anything but what was hoped for.

What is wrong with the monopoly system, and what are the reasons for failure in Finland? First, a few basics need to be explained.

It is a general fact that monopoly reduces business because the market economy does not get to work in the best possible way. Monopoly causes inefficiency, which has been considered a good thing in controlling the gambling business. According to the legislation of many countries, gambling is a business that has been prohibited in principle and which the state has then given an exemption to a company to operate. The basic idea has been to limit the activity significantly and thus protect people from the harmful effects of gambling. This kind of activity worked well in a situation where business was only done in the retail channel, but the situation changed radically with the internet.

It is generally thought that doing a gambling business and responsible operation are mutually exclusive things. This is fundamentally a wrong way of thinking. There is no direct correlation between gambling sales and the number of gambling problems, and increased gambling sales do not automatically increase the number of gambling problems. Responsibility measures to prevent gambling are not the best possible way to prevent gambling problems. We must definitely try to reduce the problems, but there must be more effective tools than making it more difficult to play.

The basic idea that monopoly itself prevents gambling problems is completely wrong. If that assumption were valid, Norway and Finland should have the fewest gambling problems in Europe. However, this is not the case; the situation is even the opposite.

Generally, wrong assumptions cause incorrect operating models and unrealistic goals. The functionality of a good gambling system does not depend on whether the system is monopoly or license-based. I believe that a monopoly can be a good model, but it requires excellent regulation to work, which correctly understands business fundamentals. Simply restricting the operation robs the system of its legitimacy in customers’ eyes. In such a situation, the official restrictions no longer work. Similarly, a license-based system can cause unnecessary problems if the regulation is not up to date.

What has gone wrong in Finland? In Finland, the state tried to protect the gambling system based on monopoly when it decided to merge the previous three companies (Fintoto, RAY and Veikkaus) into one company. The goal was to enable more efficient business operations when there was no longer a need to prevent competition between Finnish companies. The assumption was to increase gambling revenues and satisfy customers who receive international-level products and services from their own company. The single company model was also believed to help prevent gambling problems, as customers’ total gambling and potential problems can be monitored from one system.

The Lottery Act, which entered into force at the beginning of 2017, strongly emphasized responsible gaming. The legal text stated that Veikkaus’ task is to prevent gambling problems. In fact, this was the sole function of the gambling company by law. Not a word was mentioned in the law about the two other big goals mentioned in connection with the change, a competitive offer and a moderate increase in the level of profits.

New Veikkaus has had difficulties getting permits for new products and services from the beginning. At the same time, international gambling companies have continued their product and service development, the results of which have been easily available to Finnish customers via the internet and mobile channels. Although offshore companies have not been allowed to do marketing in Finland, information about the companies has spread widely, and an increasing number of Finns play money games for companies other than Veikkaus. Veikkaus, which used to take good care of its channeling task, has fallen from the top ranks of the development of the gambling world. Because of this, active Finnish gambling customers have moved to other companies.

The situation has escalated little by little. Veikkaus’ sales and GGR have decreased every year of the company’s operation. Veikkaus’ GGR was around €1.8bn when the company started operations. According to this year’s forecast, the GGR is about €1.0–€1.1bn. The drop has been in six years by about 40% Veikkaus’ market share of all gambling in Finland was at the 90% level, but now it is only about 2/3. Veikkaus has only 50% of gambling in digital channels, compared to 73% six years ago. The worst situation is in particularly competitive areas, in fixed-odds betting and online casino games, where Veikkaus’ market share is only about a third. That has happened in a situation where Finland further tightened gambling legislation from the beginning of 2022 and made it more difficult for offshore companies to operate.

The poor business results could even be justified in some way if the primary goal of reducing gambling problems had been realized. The previous nationwide gambling problem research was conducted in 2019. At that time, it was found that there had been no significant change in the overall level of gambling problems. On the other hand, the number of players suffering from serious problems had increased somewhat. After 2019, Veikkaus’ sales and GGR collapsed. Unfortunately, we will have to wait at least a year before we know how this has affected the number of gambling problems. The following nationwide research will be made next year, and the results will probably be known in early 2024. According to Veikkaus’ small-scale survey, gambling problems have decreased somewhat, but it does not seem that a tremendous change has occurred.

Veikkaus is not allowed to develop its business, and at the same time, the number of gambling problems does not seem to be developing as expected. Gambling has become more difficult for Veikkaus due to stricter responsibility requirements, e.g., mandatory identification and strict loss limits. As a result, customers have increasingly transferred their gambling to other operators. Finns’ overall gambling seems to be slightly increased after the Covid-19 pandemic, but at the same time, Veikkaus’ GGR continues to fall sharply. The new stricter monopoly legislation seems to be driving customers to offshore companies. The money flows outside of Finland, the customers are no longer under the supervision of the Finnish authorities, and the number of gambling problems does not decrease.

The situation cannot continue like this, and now it is better for everyone that the gambling system in Finland would change. That opinion was said by the CEO of Veikkaus in August when the company reported its H1/2022 result. Veikkaus, therefore, announced that it no longer considers it reasonable to continue as a monopoly company, at least in competitive gambling areas. A similar announcement by a monopoly company led to a rapid change in the gambling system in Denmark and Sweden. Judging from the comments of the political parties, the same will also happen after the parliamentary elections held in Finland in April next year.

No one yet knows what Finland’s new gambling system will be like and when it will come into force. I’ll try to help political decision-makers design the best possible model for Finland, where legislation and regulation are based on a comprehensive understanding of the gambling business. I believe that new, much better legislation will come into force in Finland within 2–4 years.

How can lotteries succeed against digital gambling competition?

I have written this text for, and Charlie Horner has partly edited it.

The summer vacation season is coming to an end here in Northern Europe, so here comes my new column after a two-month break. As you have noticed from my previous writings, I consider it important that the offer of lottery companies is competitive compared to other gambling operators. That is especially critical in digital sales channels, where a massive number of other companies offering gambling products are available to customers.

Many lotteries have thought the competition does not concern them because the company has a monopoly on lottery games. That kind of thinking has not been very harmful in a situation where the sale of lottery games has taken place in the retail channel because the customers have faced only a few other gambling offerings. However, the digitalization of business and the change in customers’ consumption behavior have changed the situation dramatically. Fortunately, most lotteries have already understood this change, and a reaction to the matter has begun.

It is easy to see from the statistics of World Lottery Association and European Lotteries that there are considerable differences in the digital business shares of the world’s lottery companies. At its peak, the percentage of digital business is more than half of the entire company’s operations. However, dozens of lottery companies worldwide have not even started selling their games on digital channels. In all cases, the reason for this is not in the company itself but the legislation of the country in question, but it does not eliminate the existence of the problem.

Some lotteries have deliberately delayed the start of the gambling business in digital sales channels. The reasons for such a decision have been, e.g., fear of the reactions of the retail channel, considering digital sales as an irresponsible activity, the “competition doesn’t concern us” idea, etc. According to experiences from several countries, the agents’ reactions to starting digital sales have been very moderate in the end, and no significant problems have followed. Lottery digital sales have not increased gambling problems. In fact, running a responsible gaming operation in the digital channel is easier to implement than in the retail channel because, in the digital channel, all customers play with identification. The “competition does not concern us” thinking is ridiculous and dangerous. Lottery activity is not a separate “business bubble” but part of the customers’ regular choice.

What do lotteries have to do in order to stay involved in the development and remain attractive in the eyes of their customers? Short-term solutions depend on the company’s current starting point. Suppose a large part of the lottery’s business already comes from digital channels. In that case, the tools for operational development are entirely different from those of a company just starting the digital business. I will return to these concrete solutions a little later.

My university professor taught us that a company could improve its weaknesses by doing the same as others but doing so does not gain a competitive advantage. A successful company always needs at least one competitive edge over other companies participating in the competition. Lotteries have had at least two traditional competitive advantages. Lottery’s retail sales channel is the most expansive gambling sales network in several countries. Lotteries have also offered the highest jackpots in the gambling market, which have interested customers. In addition, the lottery profits to the beneficiaries and the responsible brand of the companies have brought a competitive advantage. Lottery’s strengths are still there, but they are not enough because there have become too many weaknesses in the operation.

People are used to doing their affairs more and more on digital channels. Entertainment and leisure consumption, in particular, has moved quickly to the digital age. Gambling products are a product group that is very easy to sell in digital channels because games are not about the physical product. Because of this, the supply of gambling games on the internet and mobile channels has exploded during the 21st century. Customers are offered an enormous number of games that are more entertaining to play than traditional lottery games. The availability of games is easy, so customers can decide where and when to play. If lotteries do not offer games on the same principle, they will develop a competitive disadvantage. By starting digital sales, lotteries, therefore, do not gain an advantage over other gambling operators, but in this way, they prevent the occurrence of a business disadvantage.

Lottery, which is planning to start selling its games on digital channels, has a lot of help available. Benchmarking and best practices information is available from other lotteries. The traditional technology suppliers of the lottery world also offer technology solutions for digital channels. In addition, several technology providers specializing in digital channels have entered the market. In addition to the technology solutions needed for sales and running games, there are also, e.g., technologies and services related to data and customer relationships. In the end, starting operations is quite simple, as long as the legal issues have been solved.

The most advanced lotteries in the digital gambling business are hardly satisfied just being in the business. Their aim is certainly to be better than other gambling operators in at least some aspects. Working with traditional technology suppliers of the lottery world has been a challenge. Because of this, many developed lotteries have ended up in a multi-supplier situation, where companies try to use the best providers on the market in different areas and no longer acquire all technology from one supplier. The best data and customer solutions are not necessarily found in the same place as the best game technology. The same situation applies to games and related services.

New game studios have entered the gambling business, developing entertaining games those interest customers. For one reason or another, there have been far fewer new game producers in the lottery game area than in other game verticals. I know that lottery games can be developed to interest customers significantly more than they do now, also in digital channels. So far, just a few companies have realized that. I follow with great interest what, for example, my former employer Veikkaus’ new subsidiary Fennica Gaming accomplishes in this area. I believe that by developing new responsible and entertaining lottery games, lottery companies can gain a competitive advantage and succeed in the digital gambling competition.

The role of the state in the gambling industry

I have written this text for and they have partly edited it.

In this column, I will look at the activities of states in the field of gambling, though I’m well aware that each nation has its own approach and desires for legal gambling.

For example, the EU has granted member states significant control over gambling. Because of this, or thanks to it, gambling activities in EU countries differ markedly from one to the next, more so than almost all other areas of business. 

When we assess the activities of states in the gambling business, it is worth recalling that gambling is, in principle, a potentially dangerous activity that can cause significant problems for some consumers. 

For this reason, gambling is regulated all over the world, and there is no desire to make the sector free from regulatory scrutiny. The methods and degrees of regulation, on the other hand, vary greatly from country to country.

At one end of the spectrum are countries where gambling is prohibited entirely, such as in several Middle Eastern countries, or those with Islam as the prevalent religion. 

The starting point for many other countries is that gambling is prohibited, but special permits can be issued for it.

A number of markets have permitted gambling through a monopoly model, from which it has gradually transitioned to allowing different activities from a wider range of licensed operators.

When considering the different gambling systems, it is important to acknowledge these historical developments, because this helps to explain countries’ differing approaches.

States have several different roles and interests in the gambling business. It is the entity that enacts and organizes the regulation of laws in the country, and because gambling has been a restricted activity, many states have been responsible for operating gambling under the monopoly model. 

The gambling monopolies have thus been under the direct control of the state, in which case the country has been the main beneficiary – and the profits from gambling are enormous, of course.

Hence, states have a very high financial interest in controlling and managing the revenue from gambling, which they can then redistribute to their chosen causes. Minimizing the disadvantages of gambling is also a key goal, as the state often has to cover the cost of treatment for those who suffer gambling harm. 

But with differing goals and expectations, there are often conflicts between different stakeholders. In general, there will be a variety ministries dealing with different products and verticals – there are only a few countries in which all gambling is centralized under a single ministry. 

That is why, for example, increasing financial profits and reducing the number of gambling problems is viewed as a contradiction in many countries, leading to conflicting and unclear regulatory policy for the industry.

Gambling is often divided into three overarching verticals: lottery, betting, and casino, each of which is subject to significantly different regulations. 

Lottery operations are generally still based on a monopoly system in which one company takes care of all operations. In most countries, this monopoly is still overseen by a state-owned entity. 

Betting can be split into sub-divisions: horse and sports betting. In many countries, there has been a de-facto monopoly for horse betting, where racetracks and betting operators have worked in tandem. 

This differs from sports betting, where there have traditionally been several operators competing, which has also been true of the casino business. Thus, monopoly systems have traditionally been more common in lottery operations than in sports betting and casino operations.

When analyzing European gambling regulatory frameworks, it is easy to see that the lottery business tends to have remained close to the monopoly model, rather than opening up to private operators. State-owned companies run the activities, or the state has direct ownership while awarding operating rights to one provider through a tender process. 

In contrast, monopoly systems for betting and casino operations are few and far between. Of the European countries, only Finland and Norway continue to operate all gambling activities based on a monopoly system.

As I said before, the EU has given its member states a great deal of decision-making power when it comes to gambling policy. The precondition is that the legislation must comply with the general principles of the EU and that restrictions on doing business must be justified. 

The premise is that gambling activities can be regulated and restricted to prevent gambling problems. That is an understandable and acceptable principle, but is it being put into practice?

In general, a monopoly model is an inefficient way of running the business activity and is therefore a worse system than the free competition, or in the case of gambling, a license-based model. However, a monopoly can be defended, if it can be proven to be more effective in preventing gambling problems than the license-based model. 

However, this is not backed up by studies, which show little evidence of fewer gambling problems in countries with gambling monopolies. 

But the effectiveness of preventing gambling harm cannot be the only deciding factor in the value of a regulatory model. But in an increasingly digital industry, the jury is also out on the licensing model – traditional borders no longer have the same significance as they did ten years ago. This online shift has posed regulators with challenging questions they have not yet properly answered. 

When the rationale for a gambling monopoly in an EU member state should be to prevent harm, one may rightly ask why that model is only prevalent for lotteries. After all, studies show that traditional lottery games cause little or no gambling harm. 

In contrast, online casino, particularly slot machines, is often said to be the most harmful gambling product. Yet online casinos are regulated through the licensing model almost everywhere. 

This discrepancy is explained in part by historical reasons but certainly also through states’ financial interests – the lottery has been a goldmine for many nations. Revenue from lottery games can account for around 60% of a country’s gambling spending, compared to 5% to 10% for sports betting and casino. 

The private gambling operators’ lobbying efforts, which have sought to and succeeded in breaking the digital betting and casino monopoly, have undoubtedly also had an impact. Lottery games have not been part of the product range of these private companies, so legal battles have therefore not centered on lottery operations.

What will happen in the future? I’m not even trying to answer that, but I’m sure the change will continue. 

The weight of responsibility in gambling is growing strongly, which is why states’ legislative and regulatory roles will be maintained and even strengthened. But it is important to note that states are fundamentally unsuited to owning commercially significant activities. 

It would be best for all stakeholders that states will give up direct ownership of gambling companies. If operations still need to be tightly controlled, a limited number of licenses is a better solution than a state-owned monopoly.

Vastuullisuuden pitää olla aitoa ja tarkoituksenmukaista

Olen aiemminkin kirjoittanut vastuullisuuden merkityksestä lottery toiminnassa. Uskon, että peliyhtiön on mahdollisuus kääntää vastuullisuus kilpailueduksi muihin yhtiöihin verrattuna, mutta tämän asian toteutuksessa tulee olla todella huolellinen. Nyt näyttää olevan merkkejä siitä, että vastuullisuusvaatimukset menevät niin pitkälle, että ongelmatonta pelaamistakin rajoitetaan niin paljon, että lottereiden taloudelliset tulokset romahtavat. Miten tällainen tilanne voitaisiin ehkäistä?

Kuten olen moneen kertaan todennut, niin rahapelaaminen on lähtökohtaisesti vaarallista toimintaa, joka voi aiheuttaa kuluttajille suuria ongelmia. Tämän vuoksi valtiot ovat päätyneet rajoittamaan rahapelitoimintaa merkittävästi, eikä tämä teollisuuden ala ole oikeastaan missään täysin vapaan liiketoiminnan piirissä. Toimintaa varten tarvitaan lisenssi, joillain alueilla on käytössä monopoli, tai toiminta on kielletty kokonaan. Kaikkien näiden järjestelyiden perustarkoituksena on suojella kuluttajia rahapelaamisen ongelmilta. Vasta toissijaisena tavoitteena on kerätä toiminnan avulla tuloja valtioiden kassaan.

Kuluttajien suojelu on tärkeää, mutta kuinka pitkällä siinä pitää mennä? Tarkoituksenani ei ole vähätellä rahapelaamisesta aiheutuvia ongelmia, mutta totean silti, että pelaaminen ei ainakaan nykyisellä tasolla aiheuta ongelmia noin 90–95 prosentille ihmisistä. Onko yhteiskunnan siis rajoitettava myös vähintään kohtuullisen terveellä pohjalla olevaa toimintaa? Jos on, niin riittääkö, että toimintaa rajoitetaan vain suoran regulaation piirissä olevissa yhtiöissä. Lotteryt kuuluvat aina näiden yhtiöiden joukkoon, ja joissakin maissa, kuten Suomessa ja Norjassa, ne ovat ainoita rajoituksen piirissä olevia yhtiöitä.

Osallistuin 1990-luvun puolivälin paikkeilla ensimmäisen kerran rahapeliongelmia käsittelevään tilaisuuteen. Puhujien joukossa oli ruotsalainen alan tutkija Thomas Nilsson, joka muistaakseni totesi, että peliyhtiöt eivät voi juuri mitään sairaanloisista peliongelmista kärsiville ihmisille. Nämä ongelmapelaajat löytävät aina jostain pelattavaa, vaikka viralliset peliyhtiöt tekisivät mitä tahansa. Sen sijaan peliyhtiöiden velvollisuutena on pyrkiä ehkäisemään riskiryhmässä olevien kuluttajien luisuminen vakavista ongelmista kärsivien joukkoon. Pidän edelleen tätä ajatusta oikeana toimintalinjana, vaikka en tiedä, onko Nilsson enää itse tätä mieltä. Jotenkin tuo ajatus sopii minun omaan ”maalaisjärkeeni”.

Käytännön ongelmaksi on nyt muodostumassa rajoitukset, jotka koskevat kaikkea säätelyn piirissä olevaa rahapelaamista. Useissa maissa on otettu käyttöön pelaamista koskevia päivä- ja kuukausirajoja, jotka ovat kaikki asiakkaille samansuuruisia. Ihmisten varallisuustasot ja sen kautta pelaamiseen käytettävät rahat ovat kuitenkin vaihdelleet todella paljon. Toiselle ihmiselle 100 euron tappio on jo liikaa, kun samaan aikaan toiselle ihmiselle 1000 euroa ei merkitse mitään. Yhteisten tappiorajojen vuoksi osa ongelmattomasta pelaamisestakin siirtyy regulaation ulottumattomissa oleville yhtiöille. Tämän lisäksi näyttää siltä, että vakavista peliongelmista kärsivät asiakkaat pelaavat myös mustan markkinan peliyhtiöille.

Jotta yhteiskunta voisi saavuttaa perustavoitteensa eli peliongelmien tehokkaan ehkäisyn ja jopa vähentämisen, tulisi niin suuri osuus pelaamisesta kuin mahdollista saada regulaation piiriin. Tämän vuoksi rahapelijärjestelmän toimivuuden tärkein mittari on järjestelmän kanavointiaste. Tutkimuslaitos H2GC on julkaissut mielenkiintoisia tietoja eri maiden järjestelmien kanavointiasteista. Maa, jossa virallisen valvonnan piirissä on 20 prosenttia koko rahapelaamisesta, on väistämättä epäonnistunut totaalisesti rahapelijärjestelmänsä rakentamisessa. Mielestäni vain ne maat, joissa kanavointiaste on minimissään 80 prosentin luokkaa, voivat olla edes jollain tavalla tyytyväisiä järjestelmäänsä. Korkea kanavointiaste ei automaattisesti auta rahapeliongelmien ehkäisemisessä, mutta se on perusedellytys sille, että ongelmiin edes voidaan päästä käsiksi.

Vaikuttaa siltä, että monissa maissa valtio pyrkii nyt estämään rahapelaamista, jotta peliongelmia voidaan vähentää. Tämä voisi periaatteessa olla toimiva tapa, jos rahapelaamisesta kertyvistä tuotoista ei tarvitse välittää. Käytännössä tällainen estämisstrategia voisi toimia kunnolla vain siinä tapauksessa, että pyrkimyksenä on lopettaa rahapelaaminen kokonaan. Rahapelaamisen tiukka kriminalisointi ja lain aktiivinen valvonta voisi johtaa edes kohtuullisiin tuloksiin. Tällöin loppuisi kuitenkin myös viihdyttävä ja ongelmaton pelaaminen. Itse asiassa vaaraton pelaaminen saataisiin todennäköisesti loppumaan lähes kokonaan, mutta ongelmia aiheuttava pelaaminen tulisi erittäin todennäköisesti jatkumaan, koska olemassa olevaa massiivisen suurta globaalia mustaa markkinaa ei saataisi kuitenkaan suljettua.

Tilanne näyttää ainakin joissakin maissa valtiollisten lottery-yhtiöiden kannalta huolestuttavalta. Regulaattorin tiukentuneet vastuullisuusvaatimukset kohdistuvat ennen kaikkea lottery-yhtiöiden toimintaan, joka lähtökohtaisesti on jo vastuullisempaan kuin muiden rahapeliyhtiöiden toiminta. Perinteiset lottery-pelit aiheuttavat vähemmän peliongelmia kuin muut rahapelaamisen alueet. Näin siis vaarallisin pelaamisen alue jää vähemmälle regulaatiolle kuin vaarattomampi toiminta. Tiukentuneet pelirajat vähentävät lottereiden tuottoa, joten pahimmassa tapauksessa peliongelmat eivät vähene yhtään ja valtioiden saama tuotto pienenee ja osa siitä siirtyy yksityisten reguloinnin ulottumattomissa oleville peliyhtiöille.

Viestinnällisesti on tärkeää, että asiakkaat ymmärtävät rahapelaamisen luonteen ja siihen liittyvien rajoitusten syyt ja seuraukset. Kun näin on, niin asiakkaiden on paljon helpompi hyväksyä toimintaan liittyvät erityispiirteet. Tällöin toiminnan vastuullisuuden merkitys voi oikeasti vaikuttaa kuluttajien käyttäytymiseen. Tällaisessa tilanteessa lotteryt voivat saavuttaa toiminnan aidolla vastuullisuudella merkittävää kilpailuetua niihin peliyhtiöihin nähden, jotka eivät välitä vastuullisuudesta tai tekevät toimenpiteitä korkeintaan näennäisesti. Ilman asiakkaiden hyväksyntää tapahtuvilla pakotetuilla vastuullisuusvaatimuksilla, jotka usein kohdistuvat vain rajoitettuun peliyhtiöjoukkoon, ei voida saavuttaa hyviä tuloksia.