Finland Considers Ending Gambling Monopoly

The Finnish administration has suggested modifying its gambling monopoly.

An official investigation into Finland’s monopoly system, compared to global benchmarks, determined that continuing the present system is “not advisable.”

The research suggests two possible reform choices. The first, inspired by the Norwegian model, would grant regulators broader authority to prevent consumers from accessing unauthorized gambling sites overseas. This could involve actions such as blocking websites, prohibiting advertising, and limiting payment processing.

The second option, resembling models employed in some of Finland’s neighboring nations, would establish a licensing scheme to regulate gambling. According to the study, implementing this system would “significantly enhance” user guidance towards legal products.

“Conversely, it is challenging to precisely evaluate the potential impact of introducing a licensing system on the prevalence of gambling issues,” the study observes. “Increased competition following the introduction of a licensing system could, in theory, lead to a rise in overall gambling consumption, which could also amplify the negative consequences of gambling.”

Principles of reform

Nevertheless, the research contends that this is not the situation. It highlights that, based on academic literature, monopoly and licensing frameworks “have no impact” on the frequency of gambling-related harm or the overall extent of activity.

The document concludes by asserting that any decision to implement a licensing system in Finland should prioritize minimizing gambling-related harm. In practical terms, this entails restricting gambling marketing, establishing a well-funded gambling regulatory body, and “creating a comprehensive structure for the entire licensing system” to safeguard users from gambling-related harm.

These actions could involve mandatory identification for all participants, a centralized self-exclusion program, and “effective steps” to prevent the continued existence of unlicensed gambling originating from foreign countries.

Finland has already proposed a series of restrictive measures intended to strengthen the operation of the monopoly system. Many of these relate to modifications to the Lottery Act, which will become effective this year. However, the study emphasizes that the challenge with such measures is that they are technically straightforward to bypass.

An examination proposed that controlling wagering activity payments beyond the existing exclusive arrangement might necessitate a statute prohibiting betting on online platforms other than Veikkaus, or stricter payment rules in the government’s proposal compared to the previous lottery law modification.

An initial investigation exploring alternative choices to Finland’s present system was initiated by the Ministry of the Interior on January 5th. Despite numerous changes over the past decade, the lottery law has always operated within an exclusive rights system, granting the state-owned betting monopoly Veikkaus sole authorization for games of chance.

The endeavor aims to evaluate the effectiveness of Finland’s exclusive system in achieving the goals outlined in the lottery law, analyze wagering systems employed by other nations, and assess the social advantages and disadvantages of various betting systems.

The report observed that the number of participants utilizing unauthorized platforms outside the monopoly system has remained steady at 5-6% of the population in recent years.

Although the quantity of individuals partaking in unauthorized gambling within the nation is comparatively modest, the financial repercussions are substantial, amounting to an estimated €500 to €550 million annually, which constitutes roughly half of the total market value.

To facilitate an international comparison, investigators scrutinized the national gambling frameworks of five benchmark nations, encompassing Sweden, Denmark, Norway, the Netherlands, and France. Among these five nations, solely Norway sustains a comparable monopolistic system for its gambling sector.

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