Gambling Industry Welcomes Finnish Licensing, Dreads 'Dutch-Style' Cooling Off

February 22, 2024
The European gambling industry applauds Finnish monopoly Veikkaus’ support for an open licensing system to combat the black market but fears its support for a cooling-off period like the one that rocked would-be entrants to the Dutch market.

The European gambling industry applauds Finnish monopoly Veikkaus’ support for an open licensing system to combat the black market but fears its support for a cooling-off period like the one that rocked would-be entrants to the Dutch market.

Veikkaus has supported a licensing system as an acknowledgment of reality — its online gambling market share has fallen to 40 percent, said chief executive Olli Sarekoski.

“If you have 60 percent in the black market, it’s not a real monopoly,” Sarekoski said earlier this month during a break in sessions at the ICE London 2024 gambling conference.

“If you have a real monopoly, that’s best from a consumer standpoint,” he said. “But if you don’t have a real monopoly, it’s better you have a licensing system.”

Given Veikkaus’ responsible gambling measures, "it is as if only 40 percent of drivers were adhering to a 100 kilometre-per-hour highway limit", Sarekoski said.

“The rest drive whatever they want,” he said.  

Since 2018, Veikkaus' revenue from casino games has more than halved, while revenue from sports betting and lottery games has been relatively flat.

But Sarekoski said he supports a cooling-off period like the one in the Netherlands as a way to fairly launch a new licensing system.

Two 2023 reports recommend a “Dutch-style cooling-off system”, without supplying any details on how it might work in Finland. 

A Veikkaus spokesperson said: “We don't have any favored proposal for the period but naturally expect the authorities to learn from the other countries' experiences.”  

The Finnish government has started preparing for opening licensing for online gambling, aiming for opening in 2026.

In the Netherlands, a cooling-off system came in two stages, and stage two came as a jolt to potential licensees.

Operators were first barred for 33 months from applying for a licence after they were deemed to have been making “specific and active offers aimed at Dutch consumers", and that was defined using criteria including using the Dutch language or offering specifically Dutch payment options. 

They even were forced to jettison their player databases as they adopted a passive approach in the run-up to licensing.

But in late September 2021, just prior to the October 1 market opening, then-justice minister Sander Dekker instructed the Netherlands Gambling Authority (KSA) to intensify enforcement against companies that did not pull out completely. 

The quick-fire departures of names including Betsson and Kindred’s Unibet gave new entrants to the Dutch market, startups and two government-owned monopolies — Holland Casino and the Netherlands Lottery — an open field for months.

A Dutch industry official has criticism and praise for Veikkaus.

“Veikkaus is probably the only incumbent that understands, in a monopoly, the monopoly also loses”, as a licensing system is the “only way to deal with the illegal market”, said Netherlands Online Gambling Association managing director Peter-Paul de Goeij.

“But to ask for a cooling-off period, that’s typical monopoly behaviour,” he said.

“It’s unfair competition; it’s anti-competitive,” de Goeij said. “It’s a bad idea, and it’s not a product we should be exporting to other countries.”

A Holland Casino spokesman disagreed.

A cooling-off period “makes sure illegal operators that have operated illegally for many years are not rewarded for their illegal activities”, said Robin Bleichrodt.

Without a cooling-off period and the requirement to discard their player databases, companies that operated illegally for years would have a “major competitive advantage”, he said.

“Those operators have often targeted the illegal market for years and were able to build their brand name in an illegal manner,” he said. 

The Netherlands Lottery had no comment on the issue. 

Despite industry assertions of unfair competition, by the third quarter last year Kindred Group was claiming its Dutch-facing brands had regained their former market-leading position.

What are the odds Finland will impose a cooling-off period?

“Veikkaus is extremely influential among Finnish decision-makers, and their opinions carry considerable weight in the context of gambling-related matters,” said Antti Koivula of Finland-based Legal Gaming.

“If Veikkaus strongly supports something, it will undoubtedly be carefully considered among decision-makers, and generally, it has a good chance of being implemented into law,” he said.

But, Koivula said, “it's far from guaranteed".

One Finnish trade group promises to “strongly oppose” a cooling-off period if it is advanced by Veikkaus and the government.

A cooling-off period, or other disincentives for operators to apply for a Finnish licence, “would in practice be continuation for the monopoly regime”, said Mika Kuismanen, chief executive of the Finnish Trade Association for Online Gambling.

It would mean “unfair competition, and a lower and lower channelization rate”, said Kuismanen, a former economist for the Bank of Finland and the European Central Bank. “And what is the rationale, that a state-owned company would be first to get a licence?”

“In a fair 100-metre race, all participants need to run 100 metres,” he said. “If someone is allowed to run only 80 metres, it is pretty clear who will be the winner.”


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