For months, a study into Finland’s gaming industry has been conducted to assess the effectiveness of its monopoly, Veikkaus. Even the state-run organization concedes that it is not operating at optimal capacity, and there is a growing likelihood that it will lose some authority.
A customer plays a gaming machine at a Veikkaus location. The discussion about ending the state-run monopoly in Finland continues. (Image: Lehtikuva )
The mission of the working group, created by the Ministry of the Interior, has been to determine what measures should be taken concerning Finland’s gambling monopoly. Initial findings highlight why monopolies are ineffective, as the Finnish government is missing out on considerable profits.
Veikkaus has expressed its desire for transformation as soon as possible, according to a statement released. Its monopoly could be restricted to slot machines and lottery products, but it could also rival foreign operators in the iGaming sphere.
Finland Suffers an Annual Loss of Over $500 Million
The government-backed study established that at least €500 million ($547 million) every year is flowing from Finland to foreign gambling companies. Additionally, more than 50,000 Finns have a gambling addiction, a situation that is exacerbated by a lack of oversight.
As a consequence, two solutions are on the table. Finland could switch to a licensing system that would open the market to regulated foreign operators for a fee. The other option is to further intensify the control that Veikkaus has and fight against unlicensed online gaming activity.
Across Europe, with the exception of Finland and Norway, the first option has become the standard. In the other two, several studies have already substantiated that gaming monopolies are not successful.
In the countries that have adopted licensing systems, which the working group has examined, 80-90% of gambling has been directed to licensed companies. This degree of channelization is considerably higher than in Finland currently.
Almost everyone in the Riksdag, Finland’s legislature, is in favor of abolishing Veikkaus’ monopoly, according to previous research. Veikkaus itself has also acknowledged that the monopoly is not effective.
More Research Continues
In the working group’s deliberations, Veikkaus’ monopoly would still remain. It would keep the exclusivity of slot machines in supermarkets, physical casinos, retail betting and the lottery.
Nevertheless, it would surrender ground online, where Finland is currently at a disadvantage. Veikkaus could obtain an online gaming license like other operators, but would no longer benefit from its monopolistic control.
If the online casino and sports betting markets were to be opened, Economist Harri Sailas, who leads the working group looking into the matter, is in favor of a tax rate of between 20-25%. This, he explains, would cover the costs of establishing and upholding a regulator while providing significant revenue to the government. It would also give Finland funds to try to block unlicensed platforms.
The debate continues, and there is no indication as to which way the government will opt for. Nevertheless, based on the evidence and the sentiments of those in the Riksdag, it is increasingly possible that Veikkaus will have to surrender in some gaming segments.