Empty Finnish Payment Blocklist Draws Criticism

February 1, 2024
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Finland’s payment blocklist is currently empty a year after its implementation, drawing criticism from a trade group representing the Finnish financial industry, but the National Police Board says it is a good deterrent.
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Finland’s payment blocklist is currently empty a year after its implementation, drawing criticism from a trade group representing the Finnish financial industry, but the National Police Board (NPB) says it is a good deterrent.

Finanssiala called on the government to divert the money it spends on payment blocking to measures that “genuinely curb gambling harm”, in a press release on January 16.

The NPB, which enforces the country’s gambling regulations, was granted new powers in the Lottery Act that came into effect on January 1, 2022; however, several of its new enforcement powers, including payment blocking, did not come into effect until January 2023.

At the beginning of 2023, there were two gambling firms on the payment blocklist; however, since May 2023, the list has been empty. 

Banks can only block payments to companies on the blocklist.

Inkeri Tolvanen, the infrastructure and security expert at Finanssiala, said: “It is clear that payment traffic blocks do not work. During the year, not a single gambling payment was prevented, even though according to the Ministry of the Interior's report, almost half of online gambling is directed to illegal gambling.”

Finanssiala said the reasons behind the empty blocklist are difficulty in identifying illegal online sites as “they can have several different names and can use other foreign companies as intermediaries” and the ease players have "opening an account in a foreign online bank or by using mobile wallets”.

Tolvanen argues that when similar licensing models were introduced in Denmark and the Netherlands the percentage of gambling spent on illegal sites plummeted despite there being “no payment traffic barriers”.

However, Juhani Ala-Kurikka, a senior advisor for the NPB, told Vixio GamblingCompliance it sees payment blocking as part of its tools to tackle illegal gambling and that they are “widely used” in other places, with similar tools “available to authorities in close to 20 European jurisdictions”.

“Currently, the NPB has the authority to prohibit the provision and marketing of gambling, which is a prerequisite to adding a company to the payment blocklist. In the vast majority of relevant cases where the NPB has taken action, the companies have ceased their potentially illegal activities thus making it unnecessary to issue a prohibition decision and add them to the payment blocklist,” Ala-Kurikka said.

The NPB sees payment blocking as a “potentially powerful deterrent”, which it believes is part of the reason that “only a handful of companies have ended temporarily on the blocklist, and that no payments have been blocked thus far”.

Antti Koivula, a lawyer with Finland-based Legal Gaming, agrees “that from the enforcement perspective, Finland's payment blocking system can be seen as a failure”, but believes “there's more to it”.

Koivula told Vixio that “the functionality of the system has not de facto been tested as the blacklist has been empty most of the time”.

Additionally, “the mere existence of a payment blocking system has increased the National Police Board's credibility. Many operators have taken precautionary action as to why would anyone want to be a guinea pig against whom the functionality will be tested.”

The Finnish Ministry of the Interior published an announcement in October 2023 indicating it has begun a formal project to define the terms of its new gambling legislation, which will dismantle the country’s online gambling monopoly and replace it with a licensing system.

The official term of the project ends on December 31, 2025, but officials say they intend to present the government’s plan for new gambling legislation to parliament in Spring 2025.

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