Finland contemplates dismantling Veikkaus Monopoly, paving the way for fresh iGaming entrants

Content Team 1 year ago
Finland contemplates dismantling Veikkaus Monopoly, paving the way for fresh iGaming entrants

The longstanding monopoly of Veikkaus in Finland’s gambling industry may soon be terminated as the Finnish Government deliberates over disbanding the state-owned company’s gambling monopoly

Critics have long argued that Veikkaus has inadequately addressed problem gambling and consumer protection, focusing instead on revenue generation for the state. Many Finnish politicians have endorsed the government’s proposal, but its implementation and impact on the Finnish economy remain uncertain.

Examining new iGaming regulatory frameworks

In 2021, the Finnish Parliament greenlit the Finnish Gambling Law reform, which took effect on January 1st, 2022. This reform aimed to preserve Veikkaus’ gambling monopoly while bolstering responsible gambling measures. Under the current Finnish law, gambling permits cannot be granted to entities seeking profit from gambling activities. Recently, the Finnish Government commissioned a report to study the feasibility of dismantling Veikkaus’ monopoly and implementing a licensing system for rival operators. The report’s findings, expected by Finland’s next election in April, will inform the incoming government’s decisions on new iGaming regulations.

The proposed “loot box regulation” is also under examination, with its implementation yet to be determined. Nevertheless, alterations in Finnish iGaming regulations could significantly transform the industry, creating new opportunities and challenges for operators, consumers, and regulators alike.

Prospective advantages of monopoly dissolution

Opponents of Veikkaus argue that the company has stymied the growth of Finland’s iGaming market, barring potential operators from entry. However, dissolving the Veikkaus gambling monopoly could yield numerous benefits, such as increased competition and innovation, ultimately favouring consumers. Additionally, this change would create opportunities for new operators to penetrate the Finnish market, further contributing to the market’s diversity and dynamism.

Nevertheless, the means by which the Finnish Government will execute this change, if at all, and its repercussions on the Finnish economy and society remain uncertain. The government is currently exploring the possibility of ending Veikkaus’ monopoly, making the upcoming developments in this space particularly intriguing. Stakeholders, including operators, regulators, and consumers, will need to adapt to the changing landscape while ensuring responsible gaming and consumer protection remain top priorities.

Addressing fears of escalating gambling advertising

Some stakeholders are concerned that opening the market might result in a surge in gambling advertising, potentially exacerbating problems in gambling and addiction. To assuage these concerns, the Finnish Government has vowed to enforce stringent regulations if the market is opened, requiring new operators to obtain licenses. This licensing process could include strict advertising guidelines and responsible gambling measures, helping to mitigate potential negative impacts on Finnish society. Sanna Heinonen from the big Finnish casino-portal Kasinonetti.com told SiGMA News: “The introduction of competition in the Finnish gambling industry and increased focus on responsible gambling measures is a step towards better regulation and safer gambling practices and can potentially lead to a more diverse range of gaming options for Finnish players.”

Finnish iGaming market expansion and stakeholder responses

The Finnish iGaming market has steadily grown in recent years, with revenues rising by 7.3% in 2022. Market growth is expected to continue, if not accelerate, with the potential introduction of new operators. The possibility of ending Veikkaus’ monopoly has elicited mixed reactions from stakeholders in the Finnish iGaming market. Some view it as a step towards a more open and competitive market, fostering innovation, while others are concerned about the potential reduction in funding for charitable causes and social welfare programs, which currently rely on Veikkaus revenues.

Ongoing dialogues inform Finland’s iGaming regulation

Regardless of the government report’s outcome, Finland’s gambling regulation future will likely be influenced by ongoing discussions and debates surrounding the nation’s gambling laws. As the Finnish iGaming market expands and evolves, regulators and operators must collaborate to protect consumers and ensure long-term market sustainability. This cooperation may involve the development of new regulatory frameworks, best practices, and industry standards that can adapt to the rapidly changing iGaming landscape while addressing concerns related to problem gambling and consumer protection.

New licensing system for online iGaming operators

Besides the potential dissolution of the Veikkaus gambling monopoly, other regulatory changes are on the horizon for the Finnish iGaming market. A new law, effective from January 2023, mandates that all operators offering online gambling services in Finland must possess a Finnish license. This licensing system aims to subject all operators to Finnish laws and regulations, including those pertaining to responsible gambling, customer protection, and anti-money laundering. Operators lacking a Finnish license will be barred from serving Finnish customers.

This new licensing regime is expected to bring greater transparency and accountability to the Finnish iGaming market, ensuring that operators adhere to a consistent set of rules and guidelines. Additionally, this approach may help to create a level playing field for all operators, fostering fair competition and reducing the potential for regulatory arbitrage.

Industry reactions to the new licensing system

The new licensing system has been well-received by some industry operators, who see it as a positive step towards a better-regulated market promoting responsible gaming. However, others have voiced concerns that the requirements for obtaining a Finnish license are excessively stringent, which may deter smaller operators from entering the market. These concerns highlight the importance of striking a balance between robust regulation and fostering an inclusive, competitive environment that accommodates operators of various sizes and business models.

Despite these concerns, the Finnish iGaming market is projected to continue growing in the coming years, driven by factors such as rising consumer demand for secure and reliable online gambling services, the development of innovative products, and the potential influx of new market entrants. The ongoing growth and evolution of the market underscore the need for a flexible, forward-looking regulatory framework that can adapt to the industry’s changing needs while promoting responsible gaming and consumer protection.

Navigating change and expansion in the Finnish iGaming market

In summary, the Finnish iGaming market is currently experiencing significant change and evolution. The potential termination of the Veikkaus gambling monopoly and the introduction of a new licensing regime for online iGaming operators exemplify the regulatory shifts shaping the market’s future. While these changes may present both opportunities and challenges for operators and consumers alike, it is evident that the Finnish iGaming market will maintain its growth trajectory in the years to come.

As always, collaboration among all stakeholders will be crucial to ensure the market remains sustainable and responsible and consumers are safeguarded from the potential dangers of problem gambling. Industry participants, regulators, and policymakers will need to work together to develop best practices, share knowledge, and promote a culture of responsible gaming throughout the market. By fostering an open dialogue and engaging in proactive cooperation, stakeholders in the Finnish iGaming market can navigate the challenges and opportunities presented by the changing regulatory landscape and help to create a thriving, responsible, and consumer-focused industry for the future.

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