Finland Initiates Gambling System Reform in Preparation for Licensing Model

Finland is on the cusp of a substantial transformation of its gambling system, with the Ministry of the Interior initiating a project to guide the reform as the country prepares to adopt a new licensing system. This signifies the impending end of the state-owned Veikkaus' gaming monopoly, with private companies poised to operate under the new licensing model.

This development is the result of a broad regulatory effort that has been set into motion following Finland's general election in April 2023. It was informed by a preliminary study of the country's existing gambling system and alternative models, which was completed in April. Over the next two years, the government intends to draft legislative proposals for the comprehensive reform of the gambling system.

These proposals will encompass several vital aspects of the gambling industry, including the types of games that will be subject to the new licensing system, the structure of licensing fees and taxation, as well as the tools for managing gambling activities. Moreover, they will address critical matters like gambling-related harm, the control of gambling operations, and the regulation of their marketing activities.

The ambitious project to reform the gambling sector will be overseen by a political steering group and an intersectoral working group comprising representatives from key ministries and authorities. The government also plans to engage experts from various sectors to ensure a well-rounded and informed approach.

The ultimate goal of this reform is to raise Finland's channelization rate. This rate, when compared to similar countries, is currently low. The channelization rate represents the proportion of gambling stakes placed with regulated providers that hold a local license.

The preliminary study conducted earlier revealed that gambling outside the confines of the state monopoly system has surged and has resulted in significant gambling-related harm. Consequently, the study presented two potential routes for overhauling the country's gambling system. These options included bolstering the existing gambling monopoly system or transitioning to a licensing model for online casino games and online betting. The government has decided to end Veikkaus' monopoly over online casino games and online betting while preserving its monopoly status for lotteries and retail slot machines.

In line with the government's plans, the activities remaining with Veikkaus and those entering the competitive market will be separated into different companies within the same group. Additionally, the project will examine the possibility of relocating gaming machines to designated controlled areas. This strategic shift is expected to fortify supervision as the system transitions to the licensing model and takes into account the social consequences, particularly those related to gambling-related harm.

This year, Veikkaus announced preparations to reduce jobs and close gaming arcades as part of the changes required for the end of the country's gambling monopoly. It estimates that this restructuring may lead to the elimination of approximately 240 positions and the reduction of gaming venues from 65 to a range between 40 and 50.

The project's overarching objective is to create a gambling system that proactively prevents and mitigates harm associated with gambling while simultaneously enhancing the channeling rate. In doing so, it seeks to bring the system in line with the government's broader goals and plans.

By fLEXI tEAM