Finland Plans to Reform Gambling Laws: Veikkaus Oy Monopoly to be Restructured Under New Licensing System

The Ministry of the Interior is seeking public comments on a draft government proposal for a new gambling act, a key reform initiative outlined in the Government Programme. Under this proposal, Veikkaus Oy will no longer maintain its monopoly over betting, online slot machines, and casino games. These gambling activities will be opened to competition through a new licensing system.

The proposal was crafted by a working group under the Ministry of the Interior, guided by a political steering group of state secretaries. The consultation period for this proposal ends on August 18, 2024.

Current gambling monopoly and unregulated market:

At present, Veikkaus Oy holds the exclusive rights to provide gambling services in Finland. However, a substantial portion of online gambling occurs outside this monopoly, with many companies offering online gambling services that fall outside national regulations and lack supervision by Finnish authorities.

The proposed legislation would establish a framework for licensed gambling and its oversight within Finland. Under the new licensing system, gambling operators could apply to the Finnish Supervisory Agency for a license to offer gambling games. This move aims to mitigate gambling-related harm and shift gambling activities into a regulated environment.

Licenses would be granted for specific gambling activities, including game software provision. License holders would also be required to pay an annual supervision fee to the regulatory authority.

Lotteries, pools, totalisator betting, physical slot machines, and casino games would still require an exclusive license, effectively maintaining Veikkaus Oy’s monopoly on these games, such as lottery games and scratch cards.

The proposal suggests that the monopoly activities and those subject to competition would be managed by different companies within the Veikkaus group. The government would determine the annual compensation Veikkaus pays for its exclusive license. Additionally, the new legislation would offer the state more flexibility in future decisions regarding Veikkaus Oy’s ownership, potentially allowing it to reduce its holdings if deemed beneficial for its shareholder value. The proposed changes do not automatically entail a reduction in state ownership.

Regulation of gambling activities:

The draft act includes provisions for gambler registration, identity and residence verification, age limits, and gambling through registered accounts. It also proposes a centralized register for self-imposed gambling bans applicable to all licensed operators.

Marketing and sponsorship of gambling games would also be regulated. Licensed operators could advertise their services under certain restrictions, but collaboration with social media influencers on their accounts would be prohibited. Marketing should be moderate and necessary to direct demand towards licensed gambling. The marketing of high-risk gambling games would be banned, and physical slot machines and casino games remaining under Veikkaus’ monopoly could not be marketed. Marketing efforts could not target minors or vulnerable groups.

The National Police Board’s current supervisory role would be transferred to the newly proposed Finnish Supervisory Agency under the Ministry of Finance. This agency would have broad powers to enforce regulations, including imposing administrative sanctions, prohibiting illegal gambling activities, revoking licenses, and enforcing compliance with penalty payments. It would also have the authority to conduct test purchases to monitor compliance.

The agency could impose administrative fines and financial penalties for violations and would oversee compliance with anti-money laundering and anti-terrorist financing laws.

According to the Finnish Ministry of Interior’s press release, network-barring and payment-blocking measures would prevent unlicensed gambling, steering demand towards licensed and regulated options and enhancing the prevention of gambling-related harm.

The Ministry of Social Affairs and Health would continue to monitor, study, and assess gambling and its associated harms, with the Finnish Institute for Health and Welfare carrying out these tasks. Discretionary government grants could be provided for initiatives aimed at preventing and reducing gambling-related harm.

The government aims to present the proposal to Parliament in the spring session of 2025, with the new system being implemented in phases. Applications for gambling licenses would open in early 2026, with licensed operations beginning in early 2027. Veikkaus Oy would retain its monopoly until the end of 2026. Applications for game software licenses would start in early 2027, with the requirement for licensed game software providers coming into effect in 2028.