What is unique about Finland’s current gaming market from a cultural and historical point of view?
Antti Koivula: For longer than I have lived, Finns have been taught local gambling company slogans, slogans which have been really effectively used to normalise gambling in Finland. If the losing money goes to public health or what else, it’s not a big deal. Gambling is also present everywhere in Finnish society. For example, you can find gambling terminals in any open space, next to cashiers in basically all grocery stores, petrol stations, restaurants and even in hospitals and elderly home cafeterias.
Jari Vähänen: What is special here is that, according to the National Institutes of Health (NIH), 80% of adults in Finland have done some gambling, which includes lottery, sports, horse betting and casino games. As far as I know, that’s higher than anywhere else. They belong to normal life here. Then, if we estimate the gambling expenditure per capita, we have been among the top three/five.
The Pre-exploration Project was a paper by the Finnish from 2023 that assessed Finland’s gaming market and what it should look like going forward. Could you give us a brief summary of it, and the impact the results had on the gambling system Finland has chosen to move towards?
Jaakko Soininen: I think the paper outlined three options and said, okay, you need to go with one or two. It says continuing with the current system is not feasible. Then they outlined that there is an option to go with the monopoly model and stricter control, or move towards licensed markets. I would say the paper handled both options in a neutral way.However, they spend a lot more paper space on the licensing model and how it would affect everything. I can read between the lines that they were recommending the licensing model (of course, nothing official there).
Then the report went through different markets in quite a lot of detail, and found out different rules and regulations from those. Basically, doing a background study for the current Government on what the options are for moving forward if you want to have a licensing model.
Was there a single event that caused Finland to shift from a monopoly to a licence system and, if not, what were the contributing factors?
JV: Before the merger of operators, the total GGR level in Finland was about €2bn ($2.17bn) and Veikkaus’ GGR was €1.8bn, so they had 90% market share, according to official numbers and estimations from the Finnish Competition and Consumer Authority (FCCA). The FCCA has now analysed the market and the total size is something like €1.6bn-€1.7bn and because GGR has been down to €1bn, they now have something like 65% anymore...
In August 2022 my former colleague, the Veikkaus CEO, announced that Veikkaus is not willing to continue as a monopoly operator anymore in some areas. He meant their sports betting and online casino because, in those areas currently, Veikkaus has, in sports betting, something like 10% despite the monopoly and, in casino, I would say 30% market share. So when they face lots of restrictions from the regulator, but the regulator has no tools to act against other operators... It’s not fair competition for them.
JS: I think the world changed around us and we needed to adapt. You cannot pinpoint one thing and say this is the reason we changed away from the monopoly system. Veikkaus themselves came out and said' okay, channelisation is in danger of dropping below 50%.' So, the monopoly starts to be questioned and I think that is the main reason. Of course, you can speak for hours on the reasons... I don’t believe a monopoly is an answer in modern European society.
I would say the Finnish system will resemble the Swedish and Danish and Dutch system to a certain extent. But there will be other characteristics... It’s not going to be a copy-paste - Antti Koivula
With Finland’s strict privacy laws, what will operators entering Finland need to know regarding Know-Your-Customer policy and data collection?
JV: There is a system of banks and I have to give my bank details. Then, the bank system will take that from authorities to register that it’s really me and the bank account is really my bank account, and I’m able to use it when using a betting account... There is a €2,000 limit. So if I spend more than €2,000, they have to check where the money is coming from. It’s not enough that it’s coming from my account, but where I have got it. And if I win €2,000 or more, for some reason, still they have to check again if that is really my account.
Many operators have never faced anything like that and I’m sure, although we don’t know precisely what kind of legislation we will have, we will continue with the same regulations we have now. It would definitely be a case of a lot of adjusting to that market, I think, for the operators coming offshore.
JS: One thing that is really not familiar in Finland is taking a photo of your passport, taking a photo of your driver’s licence or anything like that. I’ve never done it in Finland in the years I have used online systems. I know that it’s rather normal in other European countries but the big thing here is that the systems need to rely on customers taking photos of your household invoices or passports... Even though the laws are strict, we are used to services, no matter what the sector is, where you have really quick and handy online solutions; and you really don’t need to provide other data yourself.
Finland has been described as ‘following Sweden’ in terms of industry. Do you think Finland’s gambling industry will be able to replicate Sweden’s or do you feel like it will be different?
AK: I want to be absolutely clear regarding this. Finland is not going to copy-paste the Swedish system. That’s really not the situation at all. That being said, Finland has closely benchmarked the Swedish system along with some other foreign gambling systems, for example the Danish and Dutch systems... On the other hand, several negative aspects have also been identified from the benchmark system and those will not be included in the Finnish system. So I would say the Finnish system will resemble the Swedish, Danish and Dutch systems to a certain extent. But there will be other characteristics and other choices made in the legislation. It’s not going to be a copy-paste.
When is Finland’s licensed market set to go live and how can operators planning to enter the market prepare themselves?
AK: According to the government programme from last June, it was stated that the reform would take place by 1 January 2026 at the latest. That’s the official schedule. Now, this aim is extremely ambitious, taking into consideration the magnitude of the reform. For example, there’s going to be a new regulator and they have to establish that from scratch. So that has to be done as well, in addition to several other things.
JS: In terms of what the operators should do, I think they should circle June 2024 in their diaries, because the first draft of the law should go into commenting around June this year. Of course, the law will not be in its final form, but it will be in such a form that you will need to start reading the law, and understanding the requirements from a technical and operations point of view. Your planning should be so that the law should be entering Parliament for final approval in more or less 12 month’s time from here. So you need to have your organisation ready by around the end of this year, to make sure you are prepared to apply for a licence in what will, most likely be, the first half of next year.