Finland Ends Veikkaus Monopoly For Competitive Market

The Finnish government has mapped out an ambitious plan to dismantle Veikkaus‘ longstanding gambling monopoly by the end of 2026, paving the way for a new, competitive market to commence in 2027. This shift aims to mitigate the adverse effects of gambling and steer the demand towards legally regulated platforms.

Legislative Roadmap

A pivotal bill is currently being drafted by the Ministry of the Interior, with plans to present it to parliament in the spring of 2025. The primary goal of this legislation is to “prevent and reduce gambling disadvantages and to improve the channeling of demand into the legally regulated gambling system”.

Assuming the bill gains approval, gambling operators will be able to apply for new approvals starting in early 2026. Similarly, software providers can begin their application process in early 2027. Both operators and suppliers will be asked to pay annual fees to a newly formed regulatory body, although the specific tax rates are yet to be determined.

The government has outlined a detailed three-year implementation schedule:

• August 18, 2024: Deadline for the consultation process, which invites feedback from various stakeholders within the industry.
• Q1 2025: Government plans to submit the draft bill to parliament during the spring session, typically held in February.
• Q1 2026: Applications for operator licenses will open.
• Q4 2026: Veikkaus’ monopoly on sports betting and online casino games will end. The company will be divided into two segments: one will manage lottery and land-based gaming, and the other will enter the competitive online market.
• Early 2027: Software providers can start applying for licenses. The provision of licensed gambling activities is expected to begin.
• 2028: Operators will be restricted to offering games from locally licensed software providers only.

New Regulatory Body

Currently, gambling in Finland is overseen by the National Police Board. However, this will change with the establishment of a new regulatory authority under the Ministry of Finance. This body will have comprehensive powers to regulate the market, including measures to curb black market activities by blocking unlicensed online and payment traffic.

The new authority will also enforce stringent marketing and advertising restrictions. Marketing activities will need to be moderated and solely focused on guiding gamblers toward licensed services. Additionally, a centralized self-exclusion register will be introduced, allowing players to exclude themselves from all gambling services within the market. The government also plans to ban unlicensed overseas advertising, particularly those targeting minors and vulnerable individuals.

“Foreign marketing of gambling games with a high risk of harm would be prohibited,” the statement said. “Marketing should not be aimed at minors or persons in an otherwise vulnerable position.”

Veikkaus’ Future and Potential Sale

The proposed changes will see Veikkaus split into multiple business arms, similar to Sweden’s former monopoly operator, Svenska Spel. This restructuring could lead to the sale of certain business segments. The state will retain some flexibility in its ownership of Veikkaus, potentially divesting parts of it if deemed beneficial for enhancing the state’s shareholder value. Despite these changes, Veikkaus will retain exclusivity over lotteries, toto games (lottery-based sports betting), land-based slot machines, and scratchcards, for which it will pay an annual fee for exclusivity rights.

To facilitate this significant transition, the government has formed a working group and is actively soliciting feedback from industry players and government departments. Topics under review include taxation, licensing procedures, marketing rules, and Veikkaus’ position in the evolving market. The consultation window will remain open until August 18, 2024.

Finland’s plan to dismantle Veikkaus’ monopoly and introduce a competitive gambling market by 2027 represents a major shift in the nation’s gambling landscape. The upcoming legislation is designed to balance the benefits of a regulated market with the necessity to reduce gambling-related harms. As Finland prepares for this transition, the feedback from industry stakeholders and the establishment of a robust regulatory authority will be crucial in creating a fair and well-regulated gambling environment.

Source:

”Draft legislation on new gambling system submitted for consultation”, intermin.fi, July 03, 2024.