Finnish Gambling System Reform Is Underway — Part II — Draft Government Bill Has Been Submitted for Consultation

Authors: Vilhelm Schröder and Axel Hård af Segerstad

Current Status of the Reform in Finland

On 25 June 2024, we published a blog post where we reported that the Finnish Government is planning to reform the gambling system and open it to competition under a licence model by 1 January 2026.

Since the publication of our previous blog post, we now have a more comprehensive overview of the proposed new legislation, as the Finnish Ministry of the Interior has submitted a draft Government Bill of the new Finnish Gambling Act for consultation. The consultation period ends on 18 August 2024. Based on the information from the Finnish Ministry of the Interior, the aim is to present the Government Bill to the Parliament during the spring session of 2025. It has also been proposed that the new gambling system would be implemented gradually. Applications for licences to run gambling games could be submitted as from the beginning of 2026 and licensed gambling game operations could be launched from the beginning of 2027.

Similar Reforms in Other Nordic Countries

Transitioning to licensing models has been topical in the Nordics over the last decade. The Danish gambling market switched to a partial licensing system in 2012, and similar changes were carried out in Sweden in 2019. The Finnish draft Government Bill also states that experiences from Denmark and Sweden can be used when assessing what kind of effects a transition to a partial licensing system could have on the Finnish gambling market. These similar transitions in the Nordics have functioned as models for the Finnish reform.

Contents of the Draft Bill

As stated earlier, with the aim to prevent and reduce gambling-related harm and to increase the channelling of demand to a regulated gambling system, the new Finnish licensing system would entail a model where gambling enterprises could apply for a licence to run gambling games in Finland.

Pursuant to the draft legislation, gambling games could be operated under either an exclusive licence (Fi: “yksinoikeustoimilupa”) for a period of ten years or a gambling game licence (Fi: “rahapelitoimilupa”), which would be granted for a five-year period. Licence holders would be obliged to pay an annual supervision fee to the supervisory authority. Under the current draft bill, e.g. lotteries, scratch cards as well as physical slot machines and casino games would continue to be regulated under an exclusive licence. In practice, this arrangement would effectively grant the state-owned Veikkaus a monopoly over these operations. However, gambling operations subject to the gambling game licence would, in turn, include fixed odds betting (Fi: “kiinteäkertoiminen vedonlyönti”), variable odds betting (Fi: “muuttuvakertoiminen vedonlyönti”) as well as digital casino games, digital slot machines, and digital bingo.

Additionally, the provision of the game software used in gambling games would require a game software licence (Fi: “peliohjelmistotoimilupa”), which would be granted for a five-year period. In practice, the game software licence entails that licence holders can only use game software that is provided from a game software licence holder. Game software licence holders may not manufacture, deliver, install, or adapt gaming software to anyone who does not have a licence to provide gambling games as required by the law.

Furthermore, the draft legislation includes provisions regarding, for example, the following:

• The registration of gamblers and verification of their identity and place of residence
• The age limit for gambling, the playing of games via a gambling account, and other gambling after identification
• The introduction of a centralised register of gambling bans that would allow people to self-impose bans on gambling games offered by any licence holder
• Marketing and sponsorship of gambling games as well as prohibited marketing tools. Although being subject to notable limitations and restrictions as regards the nature and extent of the marketing, licence holders would be permitted to advertise their business and games. By way of example, third party marketing would be prohibited, as licence holders would only be allowed to market their business and games by themselves.

A New Supervisory Authority

To this date, gambling games have been supervised by the National Police Board. In the future, a proposed Finnish Supervisory Agency (Fi: “Lupa- ja valvontavirasto”) would take over this role. The Finnish Supervisory Agency is proposed to have a broad set of powers, including the ability to address unlawful activities through administrative sanctions. The Finnish Supervisory Agency would, among other things, be able to prohibit the operation and marketing of gambling games, revoke licences as well as reinforce certain decisions with penalty payments. Additionally, the Finnish Supervisory Agency would be entitled to make test purchases as part of its supervisory duties.

We will continue to monitor and report on key developments as the reform moves forward.