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.

Motivations of gambling

As I wrote in my previous blog it is extremely important to know your customers and understand their needs. Customers and their needs unfortunately vary quite a lot and that makes our business complicated but also interesting.

Old-fashioned way to analyze customers is based on sex and age. I don’t believe on that method at all! All women or millennials are not same kind of consumers. I admit that there are some major differences between the gambling habits of women and men, but you can’t utilize that information because it doesn’t tell almost anything about them as gamblers. If you know that women are buying more scratch cards than men or men are playing more horse racing than women, what then? Just small percent of men are interested in horse betting and you should know who they are and understand why they are doing that.

There are now lots of talk about millennials and digitalization. That’s is relevant discussion but not in that way which seems to be the most usual way to do it. Digitalization is important change to everybody not only to young customers! Millennials are more used to use internet and mobile solutions, but also older customers have adopted those new channels. Millennials are playing more social games, but not all of them and there are more and more older people doing that too.

I’m not sure if it will be possible to understand all individual needs of your customers in the future. Anyhow, now it’s not possible due to so huge amount of data which we need to do that and it’s still expensive try to use all that data. Probably data scientists will find more effective and cheaper ways to take care of those analyzes in next coming years. At this moment companies like Google, Amazon and Facebook are utilizing that kind of knowledge already and other businesses should follow then as soon as possible.

Because it is in practice impossible to serve all our customers from individual basis we should find out other ways to do it. I think that we could analyze our big data of customer behavior and based on that categorize our customers to different groups which are based on motivation of gambling. In old days companies used to make customer surveys where they asked why people are playing games. Some companies are still doing that but that’s almost useless. It’s the fact that people give wrong answers when you asked about their gaming and gambling. They underestimate their consumption in that area and don’t tell the real reasons for gambling. It’s very common to say reasons which sound acceptable from public opinion point of view. I’m not saying that companies shouldn’t use customer surveys at all, but I’m saying that they should understand better the role of data analytics.

I try to describe my idea here in short way. It would be too long story to write is with all details. Let’s decide that there are just three main reasons for gambling and all other motivations are subsections of those three. Based on my knowledge those main reasons are: 1. dreaming, 2. to pass the time and 3. sports. It’s important to understand that one single customer could have all those reasons in different time and place. It means that we can’t say that customer X is “dreamer” and customer Z is “sport fan” but we could say that customer X’s main motivation for gambling is dreaming and that information we could use. That information we could find out from our customer database. I know that there are still some gambling companies who don’t have real customer database and they can’t use that method. To be honest, it’s not the biggest problem which those companies have…!

I’ll try to explain a little bit more my idea. Let’s take first “dreaming”. Quite many people are dreaming about the better life, but they don’t have practical ways to change it. Although almost everybody knows that it’s real difficult to win big money from gambling they are still willing to try. The main two subsections in “dreaming” are “daily dreamers” and “life change dreamers”. Daily dreamers are buying quite often scratch cards and playing Keno and that kind of games and they would like to win just some money. Life change dreamers are spending just some euros mainly to lottery games and not weekly basis. They might buy lottery tickets when there is big jackpot in that game. The big part of their playing is to dream about what I would do if I would win. Then there are lots of people who has “extra time” and they spend part of that to gambling. In that area social games have big part but also slot machines or even casinos are part of that life. The third main motivation is sport and there are two main subsections: sport fans and sport punters. Sport fans are interested in sports and they spend lots of time to watch sports and sometimes spend some euros for sports (& horse) betting. Gamblers are also interested in sports, but they are mainly keen on betting. They try to use their expertise in sports to make money.

It’s important to know what kind of motivations there are and what kind of moments and places might be favorable for different motivations – for example men might have some extra time in shopping centers. As a disclaimer I would like to say that gambling companies should take care responsible gaming issues all the time and shouldn’t misuse information based on their databases. I’ll write more about responsible gaming sometimes later.

And the winner is… – CUSTOMER!

Gambling companies have had very product centric strategies. The main business elements have traditionally been products and product related services. The basic idea has been that players will select us if our products are the best ones. This business model worked quite well about 10 – 20 years ago when gambling business was mainly based on retail shops and physical casinos and when internet and mobile gambling was not so big.

Consumption habits have changes and gambling business can’t be out that development. Gambling in retail network is going down and business has moved to internet and especially to mobile channel. When in old model there were just few retail shops in their own neighborhood now there are tens of alternatives in everybody’s pocket when mobile has become the main channel of gambling. Active customer could easily select his gambling operator among hundreds or even thousands of gambling companies. It’s not possible to operate with same business models anymore in this new world.

Successful company should understand the needs of their customers. It’s not enough anymore that product is good. It’s the fact that you can’t get permanent advantage with products in gambling business because we are living in “copy – paste” world. In practice it’s impossible to get patent for your new products and due to that the other operators could copy them in few months or even weeks. We have almost the same challenge with product related services which are also easy to copy if they seem to work in other companies. So with the traditional key elements you could get in the best case few months advantages compared to your competitors. One good example of that is bonuses. I don’t remember which company started that but it’s sure that it didn’t get very good benefit from that because all the others did the same very soon. Nowadays almost all companies have different kinds of bonuses and they are “new normal” which means that the only winner has been the customer who now gets a little bit higher payout percent.

The good gambling operator has to have high quality products and services and also trustable and flexible technology but you won’t win the game with those elements – you will just lose without them. I believe that those companies who understand more about the needs of their customers and could develop their service models based on those needs will win the competition. That’s why the importance of data will be extremely high. It’s not enough if you just collect data but don’t know how to use it. You should understand what the most important features are in that data. It’ll complicated task because those features will vary real much among different customer groups and could be even personal ones. More personalized service you could offer the better possibility you have to succeed. It’s not worth of doing personalization manually but machine learning and automatization will be useful tools for that. The goal is to give your customer feeling that he/she is important to you and you are offering him/her interesting products and services with “only for you” principle. The satisfied customer is for sure more loyal than unhappy customer and will probably be ready to spend even more money.

There are lots of talk about data and personalized customer experience. As an active gambling customer I would say that I have never get “wow” feeling from any gambling company. It’s of course possible that I’m too critical customer but the more likely alternative is that gambling companies haven’t yet understood what they should do. It’s sure that in long term the customer will be the winner because he/she is the king/queen which the companies will serve better than they have done earlier. Those companies who just optimize the profit of next quarterly will lose – hopefully! The companies who will invest in long term customer experience development will finally win the competition because that’s the only important area where you really could differentiate yourself from your competitors. You should try to find out the most important features by “test & learn”-method and utilize automatization and machine learning as much as you can. We are already doing that and there are tens or even hundreds of changes in our offering every day. We are all the time analyzing the results of those changes to the customer experience and have got excellent results from that. But there is still long way to go in that area…