Finnish state-owned gaming monopoly Veikkaus could come to an end, paving way to new licensing system

As reported by local media, the Finland government is considering launching an investigation into whether to end its gambling monopoly. According to the Minister of European Affairs and Ownership Steering, Tytti Tuppurainen, the Veikkaus monopoly may be broken up in the coming government term. Tuppuurainen wants the investigation to outline the transition to a licensing system before any possible change in government. The country's upcoming general elections are set for April 2.

Veikkaus has previously acknowledged that the monopoly may not be in the best interest of Finland. Even a major political party, the Social Democratic Party of Finland (SDP), one of the monopoly’s staunch supporters, sees good aspects in moving to a licensing model.

A coalition of political parties says opinion polls clearly support breaking Veikkaus’ monopoly. If the coalition formed an alliance with the SDP, digital games could open up to foreign companies through a licensing model.

Should the monopoly end, the online casino and betting markets could open up to competition. Veikkaus would remain only in so-called proximity games, such as slot machines, lottery games, and Lotto.

"I have expedited a study on the possible transition to a multi-permit system. It is only a good thing that the opposition also shares this view," Tuppurainen said. "There are parliamentary elections next spring, and it would be ideal that by the time of the government negotiations, we would have enough information to be able to make policies in the government negotiations."

Tytti Tuppurainen, Minister of European Affairs and Ownership Steering.

Last year, Veikkaus CEO Olli Sarekoski and Deputy CEO Velipekka Nummikoski said that the monopoly's market share falls by 5% annually. "Now the turnover is around NOK 5.4 billion and this suggests that many people play with foreign companies outside the monopoly," Sarekoski noted at the time.

According to Tuppurainen, the change toward licensing would put all gambling providers on the same page. As non-Veikkaus operators are not regulated, many currently offer no player protection, while Veikkaus has a number of strict limits for deposits. She also noted that the Finnish government does not receive any proceeds from unlicensed gambling.

"Right now the game companies from abroad operate as if in a wild grey zone. They are not subject to the same liability regulations that apply to Veikkaus," she said. "The situation naturally causes gambling disadvantages and at the same time the taxman’s hand is twisted, which means that the profits from gambling also go past Finland to foreign countries."

With Veikkaus set to continue overseeing the lottery segment, the monopoly continues to introduce changes to offer a safer gaming experience. It recently announced that it will start requiring identification in all coupon games, like scratch-offs, this year.

The mandatory identification is the result of the Lotteries Act, which entered into force at the beginning of 2022. That law requires identification for all gaming. The data can be used to identify at-risk gamblers, and the lottery operator also has the option to prevent the ID holder from gambling if necessary. The deadline for the change is July 1, 2023.

Veikkaus was formed in 2017 when the previous three monopoly operators - Fintoto, Finland’s Slot Machine Association (RAY), and lottery Veikkaus - were merged into one company controlled by the state.

According to Sari Multala, MP for the National Coalition Party, Veikkaus’ monopoly on the lottery and land-based casino gaming would not be impacted. She indicated that it is easier to regulate these verticals when there is only one provider. "On the online side, the [current] regulation cannot achieve the goals we need. Monitoring is easier in the physical world than online," said Multala.

The Finnish monopoly system has long been opposed. Many industry groups have made calls for the monopoly to end, while in 2023 a legislative committee said the current system is "practically broken" and other methods should be considered if Veikkaus’ monopoly can no longer be implemented.