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A change in political power could see a licensing system introduced in Finland as early as 2026, according to a former Veikkaus Oy VP turned local gambling consultant.
A draft proposal to amend the Lotteries Act will return to parliament soon from the European Commission with few changes, the Finnish Gambling Consultants co-founder Jari Vähänen said during a European Gaming and Betting Association (EGBA) webinar on Finland’s gambling policy.
The proposals see the continuation of the country’s monopoly system for the foreseeable future, albeit with alterations to charity funding and new payment blocking powers.
Asked when he thought political will might shift towards a more open market, Vähänen said he believes parliamentary elections in 2023 offer hope for a potential licensing system.
He predicts a new right-wing government would be more focused on increasing tax revenue from the gambling sector as opposed to the current focus on reducing problem gambling.
The consultant predicted that if the mood does turn in favour of reform, such a government could introduce support for new gambling legislation by 2024 and would likely take around two years from then to actually launch some form of a licence-based system.
The consultant does not blame Veikkaus for its predicament of declining revenues. Instead, he blames the government for placing the company between a rock and a hard place, as it looks to increase funding for beneficiaries and reduce problem gambling rates.
For instance, last year, the government allocated €347m to make up a Veikkaus funding shortfall caused in part by COVID-19 lockdown restrictions, but also because the operator reduced the number of gaming machines in the market in response to concerns their easy availability was increasing gambling-related harm.
The debate in Finland is, therefore, no longer simply about a monopoly or licensing system, according to Vähänen, but now also a discussion on sports and culture’s dependence on gambling income.
Birgitte Sand, the former director of the Danish Gambling Authority and CEO of Birgitte Sand & Associates, was “shocked” to hear the Finnish government’s recent working group did not even explore the potential impacts of a licensing regime.
She believes it is clear there is a lack of political will currently in Finland to change to a licensing system at the moment.
Even so, Sand argues, it is illogical for politicians to ignore the benefits of a licensing regime, due to the success of so many other European countries in channelling consumers away from unlicensed operators.
“I have not seen much harm done to monopolies by online competition. To the contrary, many pick up the challenge in a successful way. With competition around they may even improve. It's a win, win. Look around Europe, this many EU members can't be wrong in liberalising their markets,” Sand said.
Rolf Sims, Kindred Group’s Nordics public affairs manager, agreed, adding that online consumers are more empowered with choice than ever and that without a licensing system in Finland emulating the Danish and Swedish model, consumers and tax revenues would be at risk.
“We want a re-regulation to address the reality of where people are playing and how it impacts tax revenues. We are looking at licensing online sports betting and casinos and there is a myth it will break the monopoly. But that has not been the case in other countries,” Sims said.
An audience question from a member of Gamban, an app which allows users to block themselves from gambling, highlighted that Finland produces the second highest number of visitors to the firm’s website, after the UK.
The incoming amendments include new payment blocking powers, with the intent being that offshore operators targeting/marketing in Finland will be blocked by banks and payment providers, similar to the current situation in Norway.
Vähänen is adamant it is not a workable way to prevent illegal gambling, instead advocating for the current monopoly to be given more tools to entice and protect consumers.
“The service level offered by the monopoly will continue to decrease in comparison to offshore operators and consumers will be breaking no laws when they go online outside of Veikkaus. Customers will leave the monopoly online quickly if it can't compete,” Vähänen warned.
Sand took a more balanced approach, arguing licensing systems “are much more powerful tools than blocks, even though they can be effective. You cannot stop the flow of water.”
