A recent study into the gambling monopoly system conducted by the Finnish government has concluded that maintaining the status quo is not a recommended option.
Unlicensed Gaming Amounts to $600m Loss for Finland’s Exclusive Rights System
The report stated that around 50% of all gaming activity takes place on unlicensed sites, which amounts to a considerable loss of money outside the exclusive rights system, estimated to be around EUR500-550 million ($549-603 million) per year.
Furthermore, engaging in gambling outside the system can lead to considerable drawbacks, which are difficult to prevent under the current system’s framework.
Veikkaus’ top management welcomed the report and its findings and highlighted the scale of the offshore industry, expressing readiness to implement a licensed system to increase Finland’s channeling rates.
According to Olli Sarekoski, the CEO of Veikkaus, it is significant that the gaming revenue outside the exclusive rights system has been confirmed to be within the range of EUR500-550 million ($549-603 million), which is consistent with the information presented by H2 Gambling Capital.
Sarekoski further added that in Veikkaus’ opinion, if there is a shift towards a licensing system, it would be preferable for this change to occur quickly rather than gradually.
Already back in September 2022, Veikkaus’ deputy CEO Velipekka Nummikoski suggested that implementing a licensing system similar to Sweden’s, which reached 90% channelization, may be a good solution as more and more Finnish players are turning to unregulated markets.
Several independent policy agencies recommended dropping the monopoly system, but the Social Democrat Party rejected the proposal. Veikkaus also asked for a delay in identification checks implementation, citing difficulties in supplying the necessary hardware.
Finland Considers Two Paths for Gaming Market Reform
The government report presented two possible paths for reforming the country’s gaming market. The first option – based on the Norwegian model – would be to reduce the availability of unlicensed offerings to Finnish consumers. This would be achieved by giving new powers to the regulator and law enforcement to make it more difficult to successfully deliver such gaming to users.
The second option would be to introduce a licensing model, which is the model embraced by the majority of Finland’s neighboring countries.
According to the preliminary study, a licensing system could potentially result in a higher channeling rate for online gambling than the current situation.
The study further noted that a possible licensing regime would in principle cover online casino games and online betting. Veikkaus would retain exclusive rights for slot machines, physical casinos, on-premises betting, and lotteries, as well as lotteries and sweepstakes, regardless of the channel.