Finland is the only EU Member State that has maintained a gambling monopoly system. Currently state owned Veikkaus Oy has an exclusive right to provide and market both land-based and online gambling services in mainland Finland. Åland, as autonomous region of Finland, has its own gambling rules and it has reserved exclusivity to provide gambling games to Ålands Penningautomatförening (PAF). Will this status quo prevail?
Discussion about amending the Finnish gambling monopoly system has arisen as more and more online gaming is channeled outside of the monopoly system and Veikkaus’ games. In online games, the market share of Veikkaus has been continuously decreasing which is not desired in the point of view of the aims of the monopoly system. After Veikkaus last autumn announced being ready to move to license system, discussions about opening the markets of online casino and betting have increased.
A possible change of gambling system shall be a political decision. Currently almost all political parties favor this amendment. Especially moving to a license system has received support among parties. The National Coalition Party (NCP) won the parliamentary election held in the beginning of April and is currently forming a government. NCP has been insisting new gambling system and before the election it promised to change Finnish gambling system. It seems fairly possible that these amendments take place during the current electoral term through license system.
The preliminary study project regarding the exclusive system of gambling has been completed.
The final report of a preliminary investigation project on the monopoly system of gambling, including its evaluation, was submitted to the Ministry of the Interior on April 17th, 2023. The project, established by the Ministry of the Interior on January 5th, 2023, aimed to create a situational analysis and a survey of various alternative models for the gambling system to support political decision-making. One of the project's goals was also to examine the gambling systems used in relevant countries and assess the societal benefits and harms of different gambling systems.
According to the report, the number of people playing non-monopoly-based gambling games (approximately 5-6% of the population) has remained fairly stable in recent years. However, the amount of money lost outside the monopoly system is significant and estimated to be around 500-550 million euros annually. Veikkaus Oy has a monopoly in Finland for offering gambling games. The more people gamble abroad, the weaker Veikkaus' operating capacity becomes.
About half of online gambling is directed towards non-monopoly-based games. Gambling outside the monopoly system also causes significant gambling-related harm, which is considered challenging to prevent in the modern system.
The investigation examined the national gambling systems of five benchmark countries. For example, Norway has a monopoly system, while the other four countries have introduced an online gambling license system. Countries that have adopted a licensing system have managed to improve the channeling rate of online gambling.
According to the report, it is advisable to reform Finnish online gambling system. The development of the gambling system should be based on researched knowledge and a balance of benefits and harms. The main goal is also to prevent and reduce gambling-related harm in a potential licensing system. Achieving this goal requires, among other things, strict regulation of marketing and effective regulatory oversight. In addition, careful research is required on the societal impact of the reform. Adequate time should be allocated for the preparation of any new regulations.
Finnish Procurement Lawyers Attorneys are following the renewal of the Finnish gambling market. We will keep the readers of our newsletter up to date and are also happy to help with question concerning possible opening of Finnish online gambling markets and thereby new business opportunities in Finland.
The Supreme Administrative Court of Finland: Prohibition of marketing and gambling monopoly, 2018:86
Date of decision: 7.6.2018
Appellant, a Finnish company, has requested that the decision of the Administrative Court be annulled to the extent that the Administrative Court has found that the National Police Board has the right to prohibit the display of logos of foreign gambling company on websites and social media.
The appellant finds that the National Police Board's interpretation of the limits of the marketing ban violates freedom of expression and is contrary to the principles of proportionality and purposefulness. The objectives of gambling legislation relate to protecting consumers and preventing social harms, which refer to the prevention of gambling addiction. The decision of the authority must be in the right proportion to the objectives pursued.
The police board has noted that the company has marketed foreign gambling company in violation of the Lotteries Act on their website and on social media.
Appellant: The Facebook page, Twitter page and company’s website are forms of communication that fall within the scope of freedom of expression, and their purpose is not to advertise gambling.
Court: Freedom of expression is not an unlimited fundamental right. Based on the report of the Constitutional Law Committee and legal scholarship, requirements have been developed for limiting fundamental rights, which, when met, make it possible to restrict fundamental rights. It also requires the fulfillment of restrictive conditions in advertising.
Court: In its decision, the ECHR considered that public health was a justification for banning tobacco advertising, even though the ban interfered with freedom of expression. The objective of the Lotteries Act is such that it may justify the restriction of freedom of expression in gambling advertising when the restriction is sufficiently precise and in the right proportion to the objective pursued. The National Police Board's decision is in an acceptable proportion to the objective of the Lotteries Act to reduce the social and health harms caused by gambling.
Court: According to the Lotteries Act, marketing includes, among other things, indirect advertising and sales promotion activities. The court considers that this is a case of advertising as defined in the law. The advertising of the foreign gambling company on the internet and social media is considered to be mainly directed at Finland. The Lotteries Act allows for the prohibition of illegal gambling activities in Finland and the prohibition of marketing such activities. The National Police Board has not acted contrary to the principle of purposefulness.
Consequences: The supreme administrative court does not change the decision of the Administrative Court.