Can Veikkaus thrive in Finlands liberalised gambling market?

Case Veikkaus | ZetaDisplay Finland

Preventing the disadvantages and social problems of gambling is a prerequisite laid down by the European Union (“EU”) law for limiting EU market freedoms and allowing a state-controlled gambling exclusive right system to exist in Finland. The Finnish Lotteries Act expressly states that the objective of the exclusive right system is to ensure the legal protection of gambling participants, prevent misuse and crime, and prevent and reduce the economic, social and health-related harm resulting from gambling. There are several player protection requirements that have to be fulfilled by Veikkaus. These include, for instance, supervision of the legal age limit (18 years of age for gambling) to prevent underage gambling, notifications on adverse effects of gambling given to players, introduction of self-exclusion measures, maximum stake limits, limits for daily and monthly losses (see question 2.6 above) and implementation of restrictions on operating hours of gambling venues, casinos and gambling halls. Online gambling transactions are not available between certain hours and notifications of the time spent playing have to be sent to the player regularly. All marketing activities of the exclusive right holder, Veikkaus, must be carried out in a socially responsible manner without presenting heavy gambling in a favourable light or non-participation in gambling or moderate gambling in a negative light. Gambling may also not be marketed to minors and, therefore, marketing is prohibited, for instance, in such television and radio broadcasting that are targeted at minors. Marketing of games that bear a particular gambling risk, such as slots, is prohibited in places other than where the games are kept available, e.g., slots in game rooms and casinos. Certain information about locations, terms and fees, the probability of winning and the winnings related to such games may, however, be provided to players.

The shift towards digital gambling continues to accelerate, with the digital gambling market in Finland estimated at around EUR 600 million for the first half of 2024. Of this, approximately EUR 310 million was spent on platforms other than Veikkaus, a nearly 15 percent increase in non-Veikkaus online gambling.

The AML Act lays down the provisions on enhanced due diligence and detecting and preventing money laundering and terrorist financing. It applies to Veikkaus as the exclusive right holder for the provision of gambling services in mainland Finland (and to PAF in the Åland Islands). The National Police Board is responsible for supervising that Veikkaus complies with the AML Act. The AML Act lays down the provisions to carry out stricter customer verification of a person’s identity in cases where the transaction or the person involved in the transaction is suspected of being used for or involved in the financing of terrorism, there are doubts about the veracity and adequacy of a previous authentication of a customer, and a bet staked or winnings withdrawn equal or exceed the relevant monetary threshold. Veikkaus has a duty to inspect and report irregular activity, prepare risk evaluations and establish an AML compliance programme. From the AML perspective, in addition to the above, the State Shareholdings and Ownership Steering Act (1368/2007) should be taken into consideration in the case of Veikkaus in relation to the appointment of the state representatives and operating guidelines issued to them, the exercise of the state’s right as a shareholder, etc. Virtual currencies are not prohibited. The Finnish Act on Virtual Currency Providers entered into force in 2019 and imposed obligations on virtual currency providers concerning registration with the Financial Supervisory Authority (“FINFSA”) and compliance with the AML Act. The main objective of the Finnish Act on Virtual Currency Providers was to bring virtual currency providers within the scope of AML requirements, in line with the 5th AML Directive (“5th AMLD”). The Payment Service Provider (“PSP”)-blocking scheme was introduced in the Finnish Lotteries Act reform of 2022 and it will enter into force from the beginning of 2023. Payments from customers residing in Finland will be blocked to blacklisted gambling operators. Only the operators found to be infringing the Finnish Lotteries Act marketing prohibitions may be blacklisted by the National Police Board.

Finlands Gambling Operator Veikkaus Ready to Give Up Monopoly

Veikkaus’ share of Finland’s total digital gambling market during the review period was about 49 percent, a slight decrease of 2 percentage points as the competition from foreign operators is increasing.

Only the exclusive right holder, Veikkaus, may provide and market gambling services legally in Finland. There are several restrictions concerning the Relevant Products due to responsible gambling requirements (see question 2.8 below). For instance, all online customers must:
■ be at least 18 years of age;
■ have a Finnish bank account;
■ have a Finnish social security number; and
■ have a permanent address in Finland.
Veikkaus is obliged to verify a person’s identity and place of residence when they are opening a player account online to ascertain that the player is not a minor and that the territorial scope of the legislation of another state or region is honoured. Slot machines in stores, restaurants, kiosks, services stations and other locations outside gambling halls and casinos have also been subject to compulsory authentication since early 2021. For compulsory authentication, it is enough to present a Veikkaus customer card and it is not necessary to provide ID. Free games before players are registered are also forbidden. Further, there are other product-specific, player-specific, game genre and game type quantitative and temporal restrictions due to responsible gambling measures (see question 2.8 below). Veikkaus has the following compulsory loss limits in place: €500/day; €2,000/month; and €15,000/year. Compulsory loss limits apply only for authenticated gambling, i.e., they do not apply to slot and casino games available in gambling halls and casinos or to lottery products and scratch cards bought from the retail sector. Only the annual limit applies to betting. There are plans to include lottery products and scratch cards within authenticated gambling no later than 1 January 2024, which would also extent the applicability of the compulsory loss limits. Furthermore, all marketing activities of Veikkaus must be carried out in a socially responsible manner.

No gambling licences are available in Finland. According to the Finnish Lotteries Act, Veikkaus, a wholly state-owned private limited liability company, currently has the exclusive right to provide gambling services in mainland Finland. Gambling services falling under the exclusive right of Veikkaus cover both land-based and online gambling operations. The Åland Islands is an autonomous region of Finland that has its own regional Government regulating gambling. Like Veikkaus, which has its exclusive right to organise gambling in mainland Finland, Penningautomatförening (“PAF”) similarly operates gambling in the Åland Islands.

Land-based slot machines were closed for about four months during the period of the COVID-19 pandemic, depending on the level of the pandemic in the different areas of Finland. The gaming arcades and slot machines that had been kept closed were reopened at the end of 2021. In addition to the above, maximum loss limits were changed due to the COVID-19 pandemic for online-based and landbased gambling games. These became permanent in Finland in 2021. Now, players are only able to lose €500 each day while playing online casino games at Veikkaus. Previously, the limit was set at €1,000 per day. The monthly threshold is €2,000.

Merger of Veikkaus, RAY and Fintoto | Midagon Finland

Traditionally, all gambling games in Finland have beencategorically grouped under the Veikkaus monopoly and are regulatedby the (1047/2001). The Lotteries Actstates the any activity in which participation is paid for andwhere the participant can win money in whole or in part based by achance is part of a lottery and is therefore it must be organizedby Veikkaus. The interpretation of lotteries has been broad and ledto surprising situations (for example, a so-called fantasy leaguebuilt around the Finnish national hockey league was also determinedby the Supreme Administrative Court as a lottery).

COVID-19: Finlands Veikkaus closes slots until mid-December

The Finnish Lotteries Act (1047/2001, as amended) lays down the main provisions on the Relevant Products and on the existing monopoly system granting the exclusive right to provide gambling services in Finland to the wholly state-owned operator Veikkaus Oy (“Veikkaus”). The Finnish Lotteries Act defines lottery as an activity in which participants may win a prize of monetary value based on chance and in which there is a charge for participation. Gambling is defined as a lottery in which participants may win money prizes. The Finnish Lotteries Act is complemented by the following main Decrees:
■ Government Decree on Lotteries (1345/2001).
■ Government Decree on Games Operated by Veikkaus Oy
(1414/2016).
■ Government Decree on the Advisory Board on Gambling
(658/2017).
■ Ministry of Interior’s Decree on rules of Veikkaus’ games
(26957/2021).
Further laws and regulations applicable to the Relevant Products include:
■ Lottery Tax Act (552/1992).
■ Finnish Criminal Code (39/1889).
■ Consumer Protection Act (38/1978).
■ Act on Electronic Communication Services (917/2014).
■ GDPR and Data Protection Act (1050/2018).
■ Act on Preventing Money Laundering and Terrorist
Financing (444/2017, as amended, hereinafter referred to
as the “AML Act”).
The special case of the Åland Islands:
■ Åland’s Provincial Lawon Lotteries(10/1966, as amended).
Further laws and regulations applicable to the exclusive right
holder, Veikkaus, and other relevant legislation:
■ State Shareholdings and Ownership Steering Act (1368/
2007).
■ Act on the Financing of Education and Culture (1705/
2009).
■ Act on Discretionary Government Transfers (688/2001).
■ Act on Virtual Currency Providers (572/2019).
■ Limited Liability Companies Act (624/2006).
Kindly note that the above list is not comprehensive.

Playtech launches Live Casino with Veikkaus in Finland

cannot continue for long. The Finnish government has also understood this and decided to make changes to the Lotteries Act, which is the corner stone of regulating gambling activities in Finland. The amended version of the Lotteries Act entered into force in the beginning of 2022. Unfortunately, the process of drafting the reform was anything but professional. The outcome (i.e Veikkaus’ monopoly) seemed to be decided first,

Finland proposes end to Veikkaus gambling monopoly

Finland is saying goodbye to the monopoly of Veikkaus and wants to create an open playing field. This will really create a new dynamic: players will have more options and a more diverse market will emerge. The government expects that this will not only improve the player experience, but that the will grow and innovate as a result.

Veikkaus keeps lottery rights as Finland begins 2027 reforms

The Finnish Lotteries Act (1047/2001) lays down the main provisions on the Relevant Products and on the existing monopoly system granting the exclusive right to provide gambling services in Finland to the wholly state-owned operator Veikkaus Oy (“Veikkaus”). The Finnish Lotteries Act defines lottery as an activity in which participants may win a prize of monetary value based on chance and in which there is a charge for participation. Gambling is defined as a lottery in which participants may win money prizes.