Finland has been occupying the headlines of casino news articles for some time, as the gambling reform in the country is underway. So, what’s happening in the Finnish gambling market now?
Before 2016, there were 3 gambling operators in Finland:
Veikkaus – lottery, and sports betting;
RAY – casino and slot competitive games;
Fintoto – horserace betting.
However, in January 2017 the country has instated a gambling monopoly and there has been a continuous decline in Finnish GGR ever since. The revenue dropped from €2bn in 2016 to €1.6bn in 2020. So, the gambling market of Finland started to decline long before the global pandemic.
With the upcoming gambling reform, Finnish authorities are hoping to improve gambling revenue in the country, which is expected to return to €2bn by 2022.
Experts’ insights into the Finnish gambling monopoly
During the webinar “At a crossroads: the future of Finland’s gambling policy” hosted by EGBA several experts in the casino industry have explored the topic of the gambling monopoly in Finland.
Ed Birkin, a senior consultant at H2 Gambling Capital, believes that a high channeling rate is a key factor of a healthy gambling environment, as it demonstrates the level of player protection. While in Europe 75% of gambling takes place on onshore premises, 35% of Finnish players are going to offshore casino sites to gamble, which is very low.
According to Birkin, the lower channelization rate is a common characteristic of a gambling monopoly (e.g., Finland, Norway). In liberalized markets, there is a broader product choice for consumers and gambling ops spend generally more on marketing and, therefore, the rate of onshore gambling will be higher than in monopoly at any tax rate. However, one of the benefits of the monopoly is the ability to absorb higher gambling taxes and stay profitable.
Jari Vähänen, a co-founder of the Finnish Gambling Consultants, has added to the topic, stating that the main expectation that the Finnish state has for Veikkaus is to reduce problem gambling instead of increasing the revenue. One way of doing this is by blacklisting offshore operators and blocking payments to those websites. However, according to the expert, this may result in an even higher rate of offshore gambling.
When talking about the downsides of the Finnish gambling system, Rolf Sims, public affairs manager at Nordics, Kindred Group, named a lack of acknowledgment of modern technology as the main drawback. The expert has also added that there are many companies, which are compliant and pay taxes, waiting to enter the Finnish market. So, in his opinion, the country has to reregulate gambling to address the new reality.
Birgitte Sand, a former director of the Danish Gambling Authority, agrees with Sims, stating that Finland has to find its unique approach to the regulation of gambling. Sand believes that Finnish gambling authorities should follow the positive examples of the UK, Denmark, and Sweden by adapting the best of these gambling jurisdictions.
Jari Vähänen has noted that there is an ongoing political debate about liberalizing gambling in Finland and he believes that the change may be in place by 2026.
Read more: German online casino system
Read more: Netherlands gambling law: all you wanted to know