Finland set to ditch monopoly model as government study calls for major shake-up

The Finnish government’s study into a potential new multi-licence online gambling regime has suggested that changes will be needed to improve channelisation in the Nordic market.

In January, the Ministry of the Interior established a four-person team to manage the research project, with the panel having delivered its findings following a preliminary study examining five international gambling markets.

The panel studied gambling legislation in Sweden, Denmark, Norway, the Netherlands and France to inform the report, with Norway the only country operating with a de facto monopoly system via state-owned Norsk Tipping and parimutuel horseracing’s Norsk Rikstoto.

Following the four months of research, the panel concluded that without change to the current monopoly system in Finland with government-owned betting agency Veikkaus, the channelisation rate would fail to improve.

The Ministry of the Interior said in a statement: “It is unlikely that the channelling ability of Finland’s exclusive rights system will be significantly strengthened in the near future without changes to the current regulation.”

The government body said channelisation would likely be improved either by moving to a multi-licensed commercial market like that found in Sweden and the Netherlands, or to greatly improve the existing monopoly system with more stringent restrictions.

Veikkaus recently confirmed it holds just 50% of the online market share in Finland despite the monopoly system being in place in the country.

The research group also found between €500m and €550m per year is being lost to offshore sites that accept Finnish players.

The Ministry of the Interior continued: “The report describes the most important aspects that should be taken into account in the further preparation of a possible licence system in Finland.

“In the licence system, it would probably be possible to achieve a higher degree of channelling in online gambling than the current situation. Achieving a high degree of channelisation is, however, ultimately dependent on the detailed regulation of the operation of the licence system and the taxation of gambling revenues.

“Even in the licence system, a high degree of channelling must be supported by restrictions on illegal game supply outside the system.”

The group added that any changes to legislation should be weighed up against a potential increase in gambling-related harm in the market. The panel explained that even in a multi-licence system there would be the need for “strict regulation of gambling marketing and a wide set of measures to prevent gambling harm”.

Reacting to the news, Veikkaus CEO Olli Sarekoski said: “The report is good and balanced. It is important that the amount of gaming margin outside the exclusive rights system is confirmed to be in the range of €500m and €550m, and thus also in the category we presented based on H2 Gambling Capital’s information.

“If the system change is headed towards a licence system, from Veikkaus’ point of view, it is desirable that this change happens faster rather than slowly.”

Antti Koivula, legal advisor at Legal Gaming Attorneys at Law, said: “The report is a high-level presentation of the current situation and the alternatives, which also includes many practical recommendations. The report recognises that the channelisation rate is already relatively low and expected to decrease further at an alarming pace.

“Based on the evidence obtained from reference countries, it would be possible to achieve a higher channelisation rate and thus also more effective prevention of gambling problems through a partial licensing system. According to the report, the only alternative would be to introduce an even stricter monopoly model, while maintaining the status quo is not considered as an option,” he added.