FINALLY, IT IS READY

Unfortunately, the changes to the Finnish gambling system have kept me so busy this year that I haven’t had time to write blogs. However, here is a new text that I wrote on behalf of http://www.finnplay.com.

When the Finnish government submitted a proposal for new gambling legislation to Parliament in early April, it was hoped that Parliament would make the decision before the summer holidays. However, this did not happen, and the discussion of the matter was postponed to the autumn. At times, it appeared the Parliament’s decision would be made before the summer holidays, but in 2026 rather than 2025. However, the discussion is complete, and the law’s official approval is a formality. The President’s signature will be required to confirm the law later this year, but it is just a standard part of the process. Fortunately, the postponement of the decision-making did not directly affect the planned schedules.

The delay in the parliamentary process was primarily due to a few potential constitutional issues and disagreements over the timetable for the law’s implementation. There was no significant political debate over the need to change the gambling system, but the parties’ views on the emphasis on responsible gambling and on business opportunities differed as expected. The current right-wing government places a slightly higher emphasis on business than the left, which emphasises responsibility. This is also reflected in the two dissenting opinions: the Left Alliance proposed starting the legislative preparation from scratch, and the Greens proposed adding several elements of responsibility to the legal text. The Parliament voted by a clear margin (153-21) in favour of the Administrative Committee’s report, which clearly illustrates the parties’ unanimity on the matter.

The law will take effect on January 1, 2026, and the application process for gambling licenses will begin on March 1, 2026. The most significant change concerns the timing of the practical transition from the current gambling system to license-based operations. Initially, this was scheduled for the beginning of 2027, but the go-live date has now been moved to July 1, 2027. At the same time, it was decided to move the introduction of the gambling software license (B2B license) to July 1, 2028. The schedule change will also affect the start date of the new supervisory authority. The current supervisory authority, the National Police Board, will oversee the licensing process and serve as the regulator until the end of June 2027. After that, the new Licensing and Supervision Authority, which operates under the Ministry of Finance, will become the supervisory authority.

Finland is an interesting market for gambling operators

The legislation aims to establish a system in which the channelisation rate is maximised (approximately 90%). This should be done in a way that does not increase gambling problems and allows gambling companies to conduct reasonable business in Finland. In my opinion, the creation of this entity was at least sufficiently successful. At least the Finnish Gambling Industry Association, PAF, and the current monopoly company, Veikkaus, seem reasonably satisfied with the outcome. There has been more criticism from smaller operators, but at this stage, there is no compelling reason to critique the system.

I have already discussed the content of the upcoming law in my previous blogs, and there were no significant changes to matters that would affect business opportunities during the parliamentary debate. If you want to learn more about the content of the law, you can read the blog post I wrote at the beginning of April. At this stage, however, the most significant change to the bill concerns the authorisation for search engine marketing. Games and the gambling license holder that operates them may be marketed in online search engines when the search term is directly related to the license holder or the game it operates. In practice, this enables, for example, the use of Google Ads as a marketing tool.

Finns spend more money on gambling per capita than most countries. I don’t know Finland’s exact ranking on that statistic at the moment, but we have been among the top 3 countries and are likely still in the top 10. So, the market is attractive to gambling companies. The new legislation enables a wide range of products to be sold through digital channels, and betting products can also be sold in retail channels. In addition, marketing opportunities are strong, particularly in mass media, where brand-level advertising can be conducted relatively freely. The same applies to sponsorship. The volume of gambling is not restricted; customers are required to set deposit limits for each operator they use, but there is no upper limit on these limits. I believe that, given these opportunities, we will see a surge in gambling marketing, at least in the first year of the new system’s operation. However, based on experience in other countries, it can be assumed that advertising volume will plateau at a level significantly lower than during the initial boom.

Although the business opportunities appear favourable to gambling companies, there are also risks to their operations. There is a risk that marketing will become so extensive that public opinion will turn against gambling. At present, Finns have a reasonably favourable attitude towards gambling. It is crucial for the entire gambling industry that operations ensure Finns are satisfied and that the climate remains positive. One of the most significant threats is related to the supervision of gambling activities. To achieve the most critical goals of the reform, the supervisory authority must make every effort to prevent companies operating outside Finland’s license-based system from doing so. In Sweden, the regulator has, in practice, focused on supervising only the operations of licensed companies, which is why “black market” operators have captured an increasing share of the digital casino market. The same must not happen in Finland.

We are on the threshold of a significant change. Finland is an interesting gambling market, but one with its own special characteristics. Finnish customers are not the same as those in Sweden, for example. Therefore, gambling companies should not copy the operating model directly from Sweden. A better approach is to develop a Finland-specific model that accounts for customer behaviour, partner networks, and specific technical operating requirements.

The result of my prediction and other notes on the content of gambling legislation

I wrote this text at the beginning of April for the http://www.finnplay.com.

In my blog, published on February 27, 2024, I made predictions about the content of Finland’s future gambling legislation. At that time, I promised to assess the success of my predictions once the bill had been passed. Parliament began considering the legislative package on March 25, so now is the right time to return to the matter, although the content of the law may still change in Parliament, at least in some details.
Toward the end of this blog, I will discuss the planned schedule for our new gambling system and highlight a few content issues that I will not cover in my assessment of my prediction skills.
So here are my guesses about 1 year and 1 month ago and my assessment of their success.

License-based system games: online casino, and sports and horse betting in both sales channels. The government program states that at least online casino games and digital channel betting will be transferred to the license-based system. However, I believe sports and horse betting will be transferred to the licensed side. It is crucial for the system to function correctly that the license entitles the operator to operate games in the retail and digital channels.
My prediction was correct. The gambling license allows for providing fixed-odds and variable-odds sports and horse betting in digital and retail channels. Licensed companies can also offer digital bingo games, online casino games (e.g., roulette, card and dice games), and digital slot games. The exclusive licenses granted for ten years, which effectively constitute a monopoly, cover scratch cards and lottery games in both channels and slot machines and casino operations in a physical environment.
License: Separate licenses for casino games and betting (including fixed-odds, pool-based sports and horse betting), with a license price of approximately 50000€. I support a system where one license would allow all games within the license-based system to be operated.
The prediction was incorrect, but the solution is a model I announced that I support. A gambling license granted for five years at a time will enable the provision of all games that have moved to the multi-license system, meaning that there will be no separate licenses for betting and digital casino games. The license application fee has not yet been published but is presumably low. The license system will include an annual supervision fee, the price of which is tied to the gambling company’s annual GGR. The minimum price is 4000€ (GGR under 100k€) and the maximum is 434 000€ (GGR over 50M€).
Tax rate: 20 – 25% of GGR. I would create a system where the tax rate varies depending on how dangerous the games are. With this logic, online casino games would have the highest tax rate, fixed-odds betting a slightly lower rate, and pool-based sports and horse betting the lowest.
My prediction was correct, but the model I saw as the best solution did not come true. The proposed tax rate is 22 % of the GGR (i.e., the money lost by customers). In addition, gambling companies operating under a Finnish license will also have to pay income tax to Finland, like other companies.
Marketing: Only brand advertising (company and product) is allowed. It is possible to advertise casino games on radio, TV, and other streaming channels for a limited time. Bonuses will be strictly restricted. Affiliate activities will be restricted. Sports sponsorship is allowed, but visibility for children and young people will be minimized.
The prediction was reasonably, but not wholly, correct. Gambling companies can advertise in mass media (TV, radio, print newspapers) reasonably freely. Still, there will be a long list of restrictions on the marketing content. In addition, advertising must include certain specified elements, such as an age limit for gambling. Marketing is also allowed in outdoor advertising and sports sponsorship, where only the operator’s brand but not products may be visible. Affiliate marketing and the use of influencers are completely prohibited, according to the bill. License holders are allowed to advertise on social media. Still, the advertising may not be interactive, meaning customers may not have the opportunity to comment, and third parties are not allowed to share those texts. Bonuses may only be given to existing customers; even then, the bonuses may not be based on gambling activity or volume. Welcome bonuses may not be used at all.
Gambling limits: Initially, a company-specific deposit limit applies to casino games if Finland ends up with separate casino and betting licenses. The deposit limit may also apply to betting games. If this happens, customers can apply for a higher deposit limit based on their income or other assets. In the coming years, the company-specific deposit limit may be replaced by a customer-specific limit when the monitoring system allows this. I think that a deposit limit is a better solution than a gambling or loss limit.
The prediction was reasonably accurate. A gambling company-specific deposit limit is coming into effect, which customers must set themselves before they can start gambling. No upper limit has been set for the company-specific deposit limit, at least for now. The bill allows the Government to issue a decree later on, which can tighten the deposit limit policy. Initially, there will be no other limits on gambling. Still, the Ministry of the Interior will have the right to issue a decree, which will later allow it to impose maximum bets and other restrictions on high-risk gambling products.
B2B license: The B2B license will not be implemented immediately, at least not when the system changes. Instead, technology and game suppliers will be set certification requirements that they must meet. The B2B license may be implemented at a later date if, for example, the experiences in Sweden show it to be a good solution.
The prediction was almost entirely wrong. The new gambling system is expected to come into practice at the beginning of 2027 when companies that have received a gambling license can start operating and marketing gambling activities. Finland will also introduce a gambling software license, the same as the B2B license. This system will be introduced at the beginning of 2028, i.e., with a one-year delay compared to the B2C license. Since 2028, gambling companies with a gambling license may only use gambling technology and products offered by B2B license companies. B2B licensees may not provide their technology and games to operators that have Finnish customers but do not have a Finnish gambling license.
Cooling-off: Finland will not introduce a cooling-off period. Since the gambling system’s practical entry into force seems to have been postponed to early 2027, the risk of using a cooling-off period has increased somewhat. I don’t think Finland will introduce new regulations just for one year, which I believe would be required if the cooling-off period were introduced.
This prediction is a bit challenging to assess. Officially, there is no cooling-off period coming to Finland, so in that sense, my prediction is correct. On the other hand, the bill states that a gambling license will not be granted to an entity that has been issued a prohibition order or imposed a penalty payment for violating the current Lottery Act after September 1, 2024. The purpose of this procedure is very similar to the cooling-off period, so based on this, I judge my prediction to have been almost wrong.
Supervision & Regulation: A new supervisory authority will be established in Finland. The new authority will probably no longer be under the Ministry of the Interior. It will be established under either the Ministry of Finance or the Ministry of Employment and the Economy. Supervision will require a new technological system and many new officials. The new regulator must be able to intervene more strictly than currently in gambling activities that are carried out without a Finnish license.
The prediction was correct. The current regulator, the National Police Board, will continue in its role until the end of 2026 and will handle the transition to a license-based system. At the beginning of 2027, a new Licensing and Supervision Authority will start operating under the administration of the Ministry of Finance. The new authority will act as the supervisor of the new gambling system from the very beginning. The pre-bidding for the technical systems required for supervision work has been ongoing since the spring of 2025. I still agree with myself that it is crucial for the functioning of the gambling system that the regulator has the ability and desire to intervene in illegal activities significantly better than in Sweden, for example.
Gambling products are not allowed to be purchased on credit, so using a credit card to pay for games is prohibited. Instead, payment applications may be used if they are based on debit payment. The use of cryptocurrencies in gambling activities is completely prohibited. Customers must be able to block themselves from all gambling with the click of a button. Blocking a specific gambling company or product group (e.g., digital casino games) must also be possible.
Regarding the overall legislation, it is essential to note that the bill allows the Government and the Ministry of the Interior to issue decrees (regulations) that can influence practical gambling activities. The Government can, for example, set maximum loss limits for gambling companies. In turn, the Ministry of the Interior can specify maximum bets, maximum winnings, and the possibility of using the autoplay feature for the highest-risk games, for example, digital casino games. The bill does not include payment and IP blocking, but they can be returned if the channelization rate cannot be increased to the desired level.
The bill is currently being considered by Parliament and is expected to be completed before Parliament goes on summer recess, i.e., by the end of June. The law will enter into force in early 2026 when the supervisory authority will start the gambling license process. The first phase of licenses is expected to be granted by autumn 2026. In practice, gambling operations based on the new legislation are planned to begin in Finland from the beginning of 2027.

The Statement of The Finnish Gambling Consultants about the proposed Finnish Gambling Bill

Background

FGC would like to thank the government for the proposal, which aims to open the Finnish gambling market to competition partially. In the preliminary work section of the bill, the situation is well described to which the gambling system, according to the current monopoly model, has taken the Finnish gambling market. The channeling ability of the system in competing product groups has already sunk too low. When planning a new system, it is paramount that the channeling capacity of the system be restored to a high enough level, preferably close to the 90 % level. The responsibility measures that control gambling activities remain ineffective without a sufficiently high channelization rate because the authorities’ measures are only effective for regulated gambling.

FGC considers that there is a lot of good in the given proposal. The channeling ability of the Finnish gambling system would improve significantly if the new Gambling Act were implemented in the form presented. However, the 90 % channelization rate mentioned above would not be reached by this proposal.

Overall opinion on the proposed bill

The good side of the bill is that it aims to create a gambling system where gambling companies have the opportunity to do business, but at the same time, the number of gambling problems should not increase. The goal of expanding the channelization rate as high as possible is the only correct solution from the point of view of the realization of business and responsibility. However, FGC wonders why the essential solution for reducing gambling problems, moving all slot machines to age-restricted premises, is missing from the proposal.

According to FGC’s view, there are several contradictions between the individual sections of the bill and the overall goals. Products with a high-profit rate for the gambling company (Veikkaus) remain on the monopoly side, which is why the proposal inevitably shows that the real reasons for the presented product division are purely fiscal. Fiscal reasons, however, cannot justify a gambling monopoly according to EU law. In addition, the products, except slot machines, proposed for monopoly do not significantly cause gambling problems.

The apparent inconsistency of the bill is in marketing and operations as a whole. According to the proposal, gambling companies could not use bonuses or third parties, such as affiliates. Still, other marketing and sales promotions would be pretty accessible. This includes a significant contradiction in the pursuit of a high degree of channeling and decreasing gambling problems. FGC believes that gambling companies should be able to compete against illegal offerings specifically in digital channels. From the point of view of increasing the channeling ability, there would be no similar need for the abundant marketing of gambling in physical channels and Finnish mass media because illegal operators are not visible in these media. In the best comparison country, Sweden, gambling advertising in the mass media increased enormously some years before the actual gambling system change and has remained at a very high level after the change compared to gambling advertising in Finland. Due to abundant mass media advertising, the general opinion of citizens towards gambling in Sweden became significantly more negative than before because the media was full of gambling advertising.

Based on the proposal, the Finnish state wants to maintain a dual role, taking care of the legislation and supervision of gambling activities and, at the same time, owning the company involved in gambling activities. There is a high risk of conflict of interest in such a model. State ownership of a gambling company operating in a competitive market is at least a questionable solution. The Finnish Competition and Consumer Authority and the Chancellor of Justice have already raised this same issue in their statements.

In this statement, FGC writes its observations about the Gambling Act and proposes corrective measures and changes to the proposal.

General notes:

General note about potentially incorrect information appearing in the proposal

The material supporting the bill is comprehensive and of high quality. However, there is one very relevant piece of information in the background material that we believe is debatable, if not even incorrect. In the preliminary works, it is implied that the channelization rate of the Swedish gambling system would have remained high in recent years. The Swedish authorities’ assessments of channelization rate are used as justification for this. In Sweden, the authorities’ assessments have been strongly criticized by operators in the gambling industry. The biggest operator in the Swedish license market, ATG, the former horse betting monopoly holder, has independently investigated the system’s channelization rate with more credible methods than the authorities. ATG has analyzed and modeled the observed network traffic and mirrored it to existing accurate gambling and customer data numbers.

The total volume of the Swedish license system has remained practically constant since the end of 2020. However, according to ATG’s research, overall gambling in product groups belonging to the license-based market has increased, and all growth seems to have been directed to gambling companies outside the system. ATG does not present an exact estimate of the channelization rate of the license-based system but implies that it could move around 70 – 82 % level at the end of 2023. The channelization rate of digital casino games seems to be significantly lower than the average, and the channeling rate of betting games is correspondingly better than the average. FGC attaches to its statement a summary (Appendix 1) of ATG’s approximately 30-page research report, which FGC has received permission from ATG to distribute. FGC believes that, if needed, the full ATG research report is available for use.

FGC points out that if ATG’s estimates of the supposed weaker channeling ability of digital casino games are correct, there is a significant risk that the channeling rate of digital casino games in Finland will not rise in line with the goals if the final law is what the Ministry of the Interior has proposed. This would be particularly harmful from the point of view of addressing gambling problems. Based on the data obtained from Sweden, specifically problematic gambling tends to move outside the system more easily than other gambling.

General note on the proposed regulation

FGC points out that the proposal has left significant issues regarding the final implementation of the gambling system behind the regulatory powers. This applies, in particular, to items under section 31. From the point of view of ensuring the functionality of the system and its channeling ability, the appropriateness of the parameters behind the settings can decide the success of the final result. Suppose the parameters given through the settings are adjusted incorrectly. In that case, the success of the entire reform may be at stake, and the result may be the worst possible – a license-based system with weak channeling capabilities.

FGC’s improvement proposal: To maintain the gambling system’s overall objectives, overall control should be maintained when making regulatory-level decisions. The Government, not individual ministries, should issue the final regulations (settings) on gambling.

General note on the tax treatment of unlicensed gambling winnings

The proposal contained in the bill to regulate unlicensed gambling winnings as taxable requires changes. FGC considers the proposed goal of extending taxation to all digital gambling outside the system to be correct and consistent. However, it includes shortcomings and challenges to the fair treatment of citizens. According to the proposal, stakes used for lost games may not be deducted from taxation. This creates an unfair situation, especially for players with gambling problems who gamble outside the system more often than other customers. If a person with a gambling problem loses, for example, 10 000 euros in unlicensed digital casino games, he could, for example, have gambled 200 000 euros and received winnings of around 190 000 euros. About three out of four rounds may have been ones in which the player won nothing, and those stakes are not tax deductible. As a result, a problem gambler who lost 10 000 euros receives a taxable income of around 140 000 euros in this example, in addition to the losses. (Appendix 2 opens up the example case a little more). This unfair outcome significantly worsens the situation of the problem gambler.

FGC’s improvement proposal: Regulated tax penalties should apply to the net winnings generated from gambling during one calendar year. This means all taxable gambling winnings the player has achieved during the calendar year, minus all bets and losses of the corresponding period.

General note on Veikkaus’ group structure from a competition law point of view

Customer base and technology

Based on the bill, the part of Veikkaus that continues in the license-based market may have a competitive advantage due to Veikkaus’s monopoly operation. This cannot be considered an action acceptable under competition law. The draft of the proposal even admits that the chosen solution seeks synergy between the operation that will remain a monopoly and the company that will switch to the license-based side.

In FGC’s opinion, there should be a clear policy on whether Veikkaus’s current customers can be transferred to a company continuing in the license market in a way that it cannot be considered a benefit from customers obtained from the monopoly operations. The calculated value of the customer base is at least hundreds of millions of euros. FGC also points out that if the part of Veikkaus continuing into the license market were allowed to utilize all of Veikkaus’ current existing customer base, Veikkaus’ license company would be given a substantial competitive advantage compared to the operators entering the market.

A company operating in a competitive market may not use the same resources as a monopoly company from the same group in a way that distorts competition. Dividing Veikkaus into several companies includes a plan to establish a separate technology company. The plan consists of the risk that the monopoly company and the license-based company will use common technology, for which, according to the plan, compensation will be paid at the market price. Determining the amount of such compensation will be challenging and, in some cases, even impossible.

FGC’s improvement proposal: To avoid problems with competition law, it would be stipulated that the Veikkaus group companies should not use joint technical solutions related to gambling. That would be the same rule as in Sweden.

The games in physical slot machines

According to the bill, slot machines, which would continue to be thousands all over Finland, continue to be covered by Veikkaus’s monopoly. These machines would have the same casino games developed mainly by Veikkaus, which Veikkaus’s license-based company would offer in the competitive license market. Those slot machines would be a significant marketing channel for the games in question, from which Veikkaus’s license company would also gain a significant competitive advantage.

FGC’s improvement proposal: A single product or game would be offered only in the monopoly or license-based market so that the customer knows which group’s game he is playing. Veikkaus’s monopoly and license companies should not offer the same product or game.

Detailed considerations:

Note on mandatory limits

Based on the proposal, the customer would be forced to set limits on gambling when setting up a betting account, which would aim to prevent harmful gambling. FGC wants to point out that although ideologically, the idea sounds valid, the practical experiences of the gambling industry have been different. In practice, it has been noticed that when a problem gambling customer hits the limits, he rarely stops gambling. Instead, gambling continues either with another official operator or, in the worst case, outside the legal system. Mandatory limits are not a good way to curb problem gambling but an excellent way to weaken the channeling ability of the gambling system.

FGC points out that making gambling limits mandatory was the biggest reason that Veikkaus’s channeling rate, especially in digital casino games, started dropping rapidly at the end of 2018. In the new system, the effect of the obligation to set limits to the channelization rate would not be as dramatic because the customer could continue gambling with the service of another licensed operator. In practice, however, players would be forced to change gambling operators. In connection with such a change, the risk of the customer switching to gambling for an operator outside the system is always tangible.

FGC’s improvement proposal: Setting gambling limits should be suggested to the customer during registration, but setting them should not be mandatory. The Ministry of the Interior should consider implementing gambling limits, for example, according to the Estonian model. In Estonia, the gambling operator must give customers the opportunity to set their limits during the customer registration process, but if the customer does not want to set them, he can, by his active decision, not set the limits.

In this context, FGC would also like to point out that if a solution is decided in the future where standard mandatory gambling upper limits are set for all players, customers should be able to increase their limits if they wish if they can demonstrate that their financial situation allows this. Such a solution ensures that the system’s channeling ability is maintained so that the risk of gambling problems does not significantly rise.

Note on bonuses

In FGC’s view, the categorical ban on all bonuses in the proposal is problematic when considering the system’s channeling ability. FGC agrees with the Ministry of the Interior that bonuses that encourage gambling can increase problematic gambling and, thus, gambling problems. Still, that would be a significantly smaller disadvantage than leaving the bonuses only for operators outside the system and helping channel gambling outside the system.

The importance of bonuses, especially for the customer experience of digital casino games and the profits of gambling companies, is enormous. The more active the customer is, the more critical the customer considers bonuses and other loyalty rewards offered by the operator. In general, the most active customers are problem gamblers or players whose gambling problem is developing. Suppose operators redeeming their licenses are denied all bonuses. In that case, the system’s channeling ability will fall significantly below the target level, as customers who are used to bonuses will move to gambling companies outside the system. It will be especially problematic if the players, who the system should be able to protect, move to play for operators outside the system.

FGC would also like to highlight that at most current international gambling companies, the implementations of bonuses and loyalty systems are often so complicated that not all players even understand how bonuses work and are available. If bonuses were partially allowed in the license-based system to improve consumer protection, it would be possible to demand clarity and simplicity from them so that consumers could understand the structures of the bonuses in detail.

FGC’s improvement proposal: The Ministry of the Interior should consider allowing bonuses in legislation so that bonuses can be given to the player, but their complicated wagering conditions would be prohibited. The bonus recycling condition should only require the customer to play the bonus money he received once through games, after which he could withdraw the remaining money for himself if he wished. With the presented change, the competitive conditions of legal operators would improve against supply outside the system, and the channeling capacity of the system would improve considerably. From the point of view of gambling problems, the legal offering would cause a few more disadvantages than the current one, but keeping customers who gamble especially problematically within the scope of the gambling system would bring a significantly more significant benefit. The society remains informed about possible problem gambling and can target actions to reduce problems only when the customer plays games from a legal operator.

Note on the categorical ban on marketing by third parties

The bill proposes that gambling marketing can only be done by licensed gambling operators. FGC considers that the categorical ban on the marketing of gambling by third parties is problematic and causes significant problems when evaluating the legality of various activities. To some extent, the regulation could be improved by defining illegal marketing more precisely, but such a solution will not completely eliminate the problems.

Affiliate activity – business-like marketing

In the categorical ban on marketing by third parties, problems arise, especially with regard to various affiliate sites. These are typically international online sites that directly or indirectly advertise gambling services. It is not always clear which country’s regulation the affiliate operates under. FGC points out that the gambling legislation of many other countries allows the use of affiliate services.

FGC points out that leaving the entire affiliate activity outside of Finland’s official gambling system poses a significant risk to the system’s channeling ability. Existing affiliate operators already have an extensive customer base of Finnish customers. In Finland, a lot of searches related to gambling are made through search engines, especially Google, which direct people to affiliate sites. People do not stop such searches, and the direction of internet traffic to affiliate sites does not stop, even if affiliate activity is prohibited in Finnish gambling operations. In this case, affiliate operators would direct customer traffic to the pages of gambling companies operating without a license, weakening the gambling system’s channelization rate.

The bill has defined strict boundary conditions for all gambling marketing. If affiliate activities were allowed in Finland, these companies would have to follow the same marketing regulations as gambling operators and media companies. Affiliate activity should become significantly cleaner compared to the current practically completely unregulated situation.

FGC’s improvement proposal: The Ministry of the Interior should look for an implementation method to bring affiliate operators into the scope of official regulation. An alternative to be considered could be, for example, the Romanian model, where affiliate operators are required to have a separate business license, which could be part of the proposed supplier license.

Note on the presented product groups in exclusive and multi-license systems

In FGC’s opinion, the arguments for leaving certain product groups under exclusive rights seem artificial. The reasons given are that there is currently no competition in the product groups in question and that transferring those products to the multi-license system would increase the marketing of these products. This, in turn, would increase the gambling problems caused by these games. However, based on the proposed law, the monopoly would mainly be in those product groups that, according to studies, cause little or no gambling problems. Only physical casino and slot machine operations are an exception in this respect. For example, the inclusion of lottery game operations in the scope of monopoly cannot be credibly justified with these arguments.

In particular, FGC considers leaving pool-based horse betting and digital eInstants within the scope of Veikkaus’s exclusive right to be an incorrect solution, and no credible justifications have been presented for the proposal.

Pool-based horse betting (Tote games)

In the case of Tote games, the existing high channelization rate and the fact that competition could increase the marketing of the products, and thus, the resulting gambling problems are presented as justifications. FGC points out that in the studies of both The Finnish Institute for Health and Welfare and the helpful line, Peluuri, Tote games have been one of the product groups that cause the least harm. Releasing them to the license-based system could increase the marketing of the products, but this could be considered mainly to direct the demand for less harmful gambling. In addition, concerning the channelization rate of Tote games, it must be understood that the high channelization rate is realized only because Veikkaus has a cooperation agreement to offer Swedish horse races with the Swedes in a common pool for Veikkaus’s customers. If the agreement were to cease to be valid for some reason, the majority of existing betting would be transferred to other operators operating without a Finnish license, and the high channelization rate of Tote games would collapse immediately.

Tote games are currently part of the license-based market in Sweden and Denmark. This is the digital sales channel situation in all European countries that have switched to a license-based gambling system. In the Netherlands, only one company can operate pool-based horse betting, but even that has gained its status through bidding. In Denmark, Tote games were initially on the side of the monopoly system. Still, that arrangement was found to be problematic and dysfunctional, as a result of which Tote games were moved to a competitive market in 2018.

FGC would also like to point out that section 26 of the draft law prohibits the organization of betting for gambling events/draws that are used in the monopoly business. In practice, the operating model would mean that operators applying for a business license in Finland would no longer be allowed to offer fixed-odds betting at those races where Tote games would be organized. This can be considered a significant regulation aimed at limiting competition because large international listed companies would apply for a Finnish license, and they compete against pool-based horse betting in Sweden with fixed odds betting products.

FGC assumes that section 26 and its justifications are written mainly from the point of view of lottery games. If Tote games were to be left as a monopoly, the proposal should be supplemented so that fixed-odds betting on the outcome of horse races would be possible. If Tote games are moved to the side of the multi-license system, this definition problem does not exist.

FGC’s improvement proposal: Pool-based horse betting/Tote games will be transferred to a multi-license system.

Digital eInstants

Regarding eInstants, FGC wants to point out that with the proposed regulation, Finland would return to the situation that led to the merger of three gambling companies at the beginning of 2017. The main reason for the merger was the weakening of the differentiation of Veikkaus’s and RAY’s products in the digital channel. The proposed regulation would do the same – not least because the proposal would allow eInstants draws to be made at the time of game purchase (RNG technology), just as in digital casino games. The visual implementation of eInstants and digital slot machines can be very identical. FGC wonders how the separation of these products can be handled reliably and how the consumer has the opportunity to identify which product group’s game he is playing.

FGC’s improvement proposal: eInstants would be included in the category of digital casino games and would, therefore, be moved to the side of the license-based system. Alternatively, eInstants could be arranged to be implemented technically so that their technical and visual implementation would differ significantly from the implementation of digital casino games.

Note on the possibility of the supervisory authority to regulate the activities outside the system

FGC considers it good that the bill aims to give the supervisory authority the means to intervene in the offering and marketing of unlicensed gambling in Finland. However, according to the FGC’s view, it seems that the vast majority of the proposed measures would affect the operations of license companies in particular. However, blocking payment and online traffic (IP) can be a reasonably effective way to reduce gambling outside the system.

FGC does not identify measures in the bill and its explanatory text that the supervisory authority could use to monitor gambling outside the Finnish system. According to FGC’s understanding, gambling outside Veikkaus is significantly more significant than the authorities estimate. It is practically impossible for the authorities to intervene in illegal supply if that supply is not even recognized. Technical systems and services would be available for monitoring and intervening in gambling, which could be used to significantly improve the system’s channeling capacity and increase the state’s tax revenues.

In the bill, great attention is paid to preventing betting-related incidents. At worst, match manipulation and other abuses are a problem for sports comparable to doping, or even worse. The bill says that Veikkaus’s own measures, FINCIS’s (Finnish Center for Integrity in Sports) operations, and ULIS’s (United Lotteries for Integrity in Sports) cooperation are excellent and sufficient measures to prevent abuses. In FGC’s opinion, this is unfortunately not the case. Finnish sports are likely also currently being used to organize illegal activities. Monitoring and preventing match manipulations should not remain the responsibility of the betting companies. Still, the authorities should take a more significant role in the matter than at present.

FGC has requested a description of the benefits of a modern monitoring system from Sportradar, which focuses on monitoring international gambling activities and preventing sports manipulation. That description is included in the appendices to our statement (Appendix 3).

FGC’s improvement proposal: The authority supervising gambling activities would be obliged to acquire technological systems that monitor and supervise gambling activities outside the license system. In addition, the regulator or other separately defined authority should join an international network that could be used to monitor global betting activities and identify possible abuses related to Finnish sports.

Minor notes

The proposed ban on using a credit card for money transfers does not protect those with gambling problems, even though that has been the explanation. In practice, that means the customer first transfers the money from the credit card to his bank account and then to his betting account. In practice, the regulation intended to protect those with gambling problems mainly results in a small additional cost for them. The ban on the use of credit cards, and especially debit cards, causes problems, especially for transactions at retail channels. In addition to the customer, the affected parties are especially retail outlets and Veikkaus, which offers gambling products in the retail channel.

The proposed procedure for lifting the indefinite gambling ban is problematic. When a customer wants to start gambling again after a break of at least a year, he is given the option of waiting three more months or moving to gamble outside the system. FGC considers that a person who hasn’t gambled for more than a year should have the opportunity to lift an indefinite ban immediately. There must be a separate consideration period to cancel short and fixed-term bans. However, if bans are valid indefinitely and have continued for over a year, that three-month consideration period will not accomplish anything other than the player moving to play outside the system.

Sincerely yours,

Jari Vähänen

Partner

The Finnish Gambling Consultants Oy