Interesting things are happening in Denmark, Finland and Sweden. Our Nordic Gambling team looks back at what has happened in 2023 and gazes into the crystal ball to give their view on what 2024 will offer in the Nordics. First in line is Finland. The crystal ball includes the first regulatory steps towards Finnish liberalisation.

Although Finnish people are eager to make use of gambling services, so far the Finnish market has provided only a few locally-regulated business opportunities to gambling operators due to the gambling monopoly. However, as the development of online gambling continues, Finland has taken the first steps in opening up its gambling market to online gambling.

What happened during 2023?

2023 was a remarkable year in terms of the change of ideological beliefs towards the gambling market in Finland and reconsidering the next steps in gambling policy. As the market share of Veikkaus has fallen below the critical 70% mark, the Finnish government – in support of Veikkaus, the state-owned gambling monopoly operator – has u-turned and will now back the liberalisation of the online gambling market. However, as the government is still enforcing the latest political decisions, Finland has implemented several measures in favour of Veikkaus, including compulsory identification, administrative penalties and payment blocking measures, which obliged payment service providers to place a payment block on payment transactions from a player in Finland to any gambling operator other than Veikkaus. These blocking measures came into force in 2023 and they apply to gambling at online casinos and betting sites that ‘illegally’ direct their marketing to mainland Finland and whose marketing has been prohibited by the regulator.

In October 2023, a legislative project was commenced by the Ministry of the Interior to reform the gambling system in Finland, and to introduce a licence system for gambling in accordance with the Government Programme of the recently formed government. The goal of the project is to draft a government proposal for new legislation to implement the changes. The reasons for the change have been mostly financial, as a big slice of proceeds gained particularly from online sales has been channelled to online gambling sites provided by foreign gambling operators. By licensing the commercial online gambling market, Finland would presumably gain more revenue in the form of taxes than it does currently via the state monopoly.

The central aim of the legislative project is to move a part of gambling activities to a licence model to reduce gambling outside the regulated system. Responsible gambling and minimising the negative effects of gambling will continue to be main objectives of the Finnish gambling regulation.

What to expect in 2024?

Most of the legislative project’s drafting work will take place in 2024. No changes or reforms are expected in the interim. Once the draft proposal is ready (probably in late 2024 or early 2025), there will be at least one round of opinion hearings where everyone will have the opportunity to comment on the draft. This will be an important opportunity, in particular for the market participants and other key stakeholders, to influence the outcome of the legislative proposal.

The legislative project will run through the year 2024, and the goal is to give the government’s legislative proposal to parliament in spring 2025. According to the Government Programme, the gambling system reform would be implemented no later than 1 January 2026. Therefore, it can be expected that the legislative changes to be proposed in 2025 would come into force from the beginning of 2026, but there may be changes to this schedule.

What would the Finnish blue-white licence system look like?

It seems Finland has learned from its neighbours’ experiences by picking what it considers the best features of the Swedish and Danish models and aims to create its own licence system. Judging by a preliminary report on which the current legislative project is based, we already have a few ideas as to the actual changes the reform will bring.

The Finnish state-owned gambling monopoly, Veikkaus, is set to undergo a significant transformation. It will be divided into two distinct entities: one will operate as a licence operator for online gambling, and the other as a monopoly operator, covering anything other than online gambling. The reform aims to introduce a more regulated gambling environment, extending licences for private operators for both B2C and B2B purposes. It is expected that an authorised representative in Finland will be required where the licence applicant is domiciled outside the European Economic Area.

A tax rate of 20-25% on gambling proceedings is expected. Furthermore, the licensing process is expected to incorporate a fee, designed to offset the regulatory body’s operational costs. Marketing restrictions will apply, and licences will be conditional on compliance with regulations concerning, for example, marketing to minors, non-compliance with which will likely result in revocation of the licence. Additionally, IP and banking blocking measures will be implemented to prevent non-licensed operations. Additionally, a cooling-off period is likely to be introduced.

As for what operations will be moved to a licence model, it is expected that online casinos, poker, and slots will be opened to licence, as well as online betting. These might be subject to changes, however, as the project is still in its early stages.

Overview of the division between licensed and monopoly operations after the reform.

There are still some unanswered questions; will bonuses be allowed, how will taxes be calculated and will shared liquidity be accepted? We are monitoring the legislative process closely and will keep you posted on changes and developments as they unfold during 2024.