Finland drafts updated gambling legislation – key changes explained
Gambling is a popular pastime worldwide. The rise of online platforms has expanded the industry more than ever before. As a result, many countries have had to address this growing phenomenon.
Finland has maintained a monopoly system for gambling since the 1940s. In recent years, the system’s functionality has come under increasing scrutiny. Over the past two years, a decision has been made to phase out the monopolistic system, deemed ineffective, and replace it with a licensing system for gambling.
Policymakers are currently refining the details of this new framework. This article provides background information on the legislative changes and examines the latest draft proposal published in late 2024.
Weak channelisation led to reform of the monopoly system
The first foreign online casinos began entering the Finnish market in the early 2000s. At that time, the domestic monopoly remained relatively strong, and the limited accessibility of online gambling platforms prevented them from gaining significant popularity. Playing online often required downloading and installing entire casino software packages on personal devices. Enthusiasts found it easier to visit local grocery stores to play slot machines and video poker.
As technology advanced, online casinos became more accessible. There was no longer a need to download software, as games could be played directly via web browsers. A few years later, the emergence of smartphones and tablets further simplified online gambling. Players were no longer confined to their homes and could play games on the go, whether sitting on a park bench or riding a bus.
With these technological advancements, Finnish players increasingly turned to online gambling. In addition to convenience, online platforms offered broader game selections and incentives, such as welcome bonuses and free spins, which were unavailable in Finland's monopoly framework. By law, Veikkaus, the state-run gambling operator, was not permitted to offer such promotional incentives.
The monopoly system was designed to funnel Finnish gambling revenue into state coffers. Over time, however, politicians and Veikkaus leadership acknowledged that the system’s channelisation rate – its ability to direct players to legal options – had fallen too low. Consequently, the Finnish government announced plans to dismantle the monopoly and transition to a licensing system.
The new licensing system aims to subject all foreign gambling companies targeting Finnish markets to the same rules and framework. Companies acquiring a Finnish licence will be required to pay a portion of their revenue to Finland, granting them legal permission to operate in the country.
Addressing criticism of the initial licensing proposal
The initial draft of the licensing system drew substantial criticism from industry professionals and stakeholders. A major point of contention was the proposal to ban marketing and promotional bonuses for foreign gambling companies operating under the system. Critics argued that such restrictions could deter many operators from joining the framework, potentially leaving them outside regulatory oversight.
The latest draft offers some concessions. Marketing will be allowed under certain conditions, and bonuses will be permitted as long as they are available equally to all players, not just new customers. While operators may incentivise gambling, they must do so responsibly and moderately.
Nonetheless, some aspects of the draft continue to provoke concern among experts. One contentious point is the proposed ban on affiliate marketing for licensed operators. Affiliate marketing typically involves casino review websites that direct users to gambling platforms. These websites often provide valuable information and act as intermediaries between players and casinos.
Finnish gambling law expert Antti Koivula commented on this issue in an interview with Next.io. He noted that Finnish players are unlikely to stop searching for online casinos when the new system takes effect. If affiliate marketing is prohibited for licensed operators, search terms like "best casino bonuses" and "Brite casinos" could lead players to less secure sites. Unlicensed operators, unaffected by the ban, are expected to invest more heavily in affiliate marketing, potentially drawing players to unregulated platforms.
Future prospects
The latest draft may not be the final version. Preliminary reports suggest the new Finnish licensing system will be implemented by early 2027. However, significant developments may occur in the next two years.
Ideally, the new system will balance the interests of all three key stakeholders: the Finnish state, foreign gambling companies, and players. Striking a balance between responsibility, security, and the differing priorities of these groups may prove challenging.
https://www.helsinkitimes.fi/lifestyle/25970-finland-drafts-updated-gambling-legislation-key-changes-explained.html