Finnish Fine Forces Operators To Take Regulator Seriously, Say Lawyers

May 18, 2023
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Finland’s conditional €2.4m fine for a Betsson subsidiary should be seen as a wake-up call for any operator that has received a warning from the National Police Board in the past, lawyers have said.

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Finland’s conditional €2.4m fine for a Betsson subsidiary should be seen as a wake-up call for any operator that has received a warning from the National Police Board in the past, lawyers have said.

Heikki Koivula, a senior compliance advisor for Legal Gaming Attorneys at Law, warned that “operators are now forced to take [the National Police Board] seriously”.

“This is a totally new scenario. I imagine a lot of operators are having meetings today and if they have been contacted by the National Police Board in the past then they will now be considering taking action,” Koivula said during a panel at the Mare Balticum Gaming and Tech Summit in Latvia on March 16.

The conditional fine will be enforced if the marketing efforts specified in the National Police Board decision continue after June 3, 2023, and will not be enforced if they are discontinued.

“If there are other cases we could likely see more enforcement action, but we will have to see,” Koivula said.

Fellow panellist Gustaf Hoffstedt, secretary general of the Swedish Trade Association for Online Gambling (BOS), said he is “very much in favour of a Finnish licensing system” and that it has a great opportunity to see and learn from the recent deregulation of markets in Denmark, Netherlands and Sweden.

“Channelisation is always a problem. It probably won't be as high in Finland as the politicians will want it to be. Attacking operators now and creating a safe haven for the monopoly gives you a very bad start. You should do the opposite I believe in any jurisdiction otherwise you will face the same channelisation problem,” Hoffstedt warned.

There are industry fears that Finland will opt for a Dutch-style cooling-off period when the market opens, forcing those that have been the target of enforcement by the police board to wait for a licence while others can operate freely.

Henrik Norsk Hoffmann, a partner at law firm Nordic Gambling, said it was important to ask: “Why are we opening these gambling markets?”

“If you want channelisation, a cooling-off period is a no-no. If you exclude those licensees who want to enter your market you will just have black market operators filling those licensing spaces. Norway is an example of how blocking doesn't work practically,” Hoffmann said.

When the enforcement action was announced on March 16, Antti Koivula, a partner also at Legal Gaming Attorneys at Law, similarly told VIXIO GamblingCompliance that “this decision has been long coming and it appears likely that another big operator will receive a similar, if not bigger, fine soon”.

Finnish enforcement action followed a report by the Ministry of the Interior published in April, which said the country’s monopoly system is at a “crossroads” and must consider introducing a licensing system or more measures to prevent unlicensed online gambling.

In response to the report, police board chief inspector Mikko Cantell reiterated his long-held view that more time is needed to assess the effect of recent legislative reforms in Finland, which gave the regulator new tools to counter illegal gambling, including roughly tripling its funding.

The Finnish Ministry of Social Affairs and Health (MSAH) also said the preliminary report contains two “fundamental problems”, as it backed preserving the country’s gambling monopoly.

The MSAH criticised the report for not addressing the possible development of the current monopoly system and for focusing on improving channelling rates instead of reducing gambling harm in a press release on Monday (April 24).

But political momentum is still very much behind opening up the online gambling space.

Heikki Koivula is now closely watching negotiations to form a new government following elections in April 2023, to see how the results will impact the future debate.

“There are lots of right-wing parties in the discussion of forming a coalition. They are most likely to break up a monopoly. How the coming government will utilise the study findings is yet to be seen. But the next government is going to be very business-friendly,” he said.

The National Coalition Party (NCP), the winners of Finland’s recent general election, have said they are keen to “give up” the Veikkaus monopoly and move the country to a licence-based system for online gambling.

Heikki Koivula believes that this reinforces the likelihood of a licensing system being introduced in Finland by February 2026; however, he acknowledged that many other people are predicting 2025.

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