November 3, 2023 | Jon Hautamäki

The legislative project to reform Finland's gambling system begins

The Finnish Ministry of the Interior has announced the initiation of a legislative project to reform Finland's gambling system. The purpose of this legislative project is to outline the concrete steps for transitioning from the current model, which is based on the monopoly of Veikkaus Oy, to a so-called license-based system.

Nordic Law has been following the discussion that began in the autumn of 2022 (see our previous article here) and has been anticipating what the future of Finland's gambling system might look like. Subsequently, during the spring of 2023, we have examined, in collaboration with industry operators, the preliminary study published by the Ministry of the Interior on the current state of Finland's gambling system and alternative future models as well as the new Government Program, which already included more binding statements regarding the future of the gambling market in Finland.

As it can be observed, many of the features predicted by Nordic Law were also included in the final government program and will thus become a part of an entirely new Finnish gambling legislation, which is intended to open up to competition with a license-based model by no later than January 1, 2026.

Objectives of the Legislative Project

The objectives of the legislative project include creating a proposal that would enable online casino games and online betting to be regulated as licensed activities within Finland's gambling system. This proposal will be based on a report drafted in the form of a government proposal.

The key objectives of the legislative project are to prevent the health, economic, and social harms caused by gambling. Simultaneously, improving the efficacy of the currently weak channelization is seen as an important way to achieve these goals.

Specifically, the report is expected to address the following themes:

  • The type of gambling to be included in the license-based system,
  • Licensing procedure and fees,
  • Taxation,
  • Special responsibilities of Veikkaus Oy, and competition as well as company law issues,
  • Implementation of gambling activities,
  • Monitoring, research, assessment, and development of prevention and treatment of gambling-related harms,
  • Supervision of gambling activities, authority powers, and funding,
  • Prevention of misconduct and crimes, as well as consumer protection,
  • Gambling marketing and sponsorship,
  • Centralized exclusion-system for gambling and other necessary tools for managing gambling, and
  • Measures to combat gambling offering and advertising outside the system.

Timeline of the Legislative Project

As mentioned, according to the government program, the gambling system is intended to open up for competition with a license-based model by January 1, 2026. To achieve this goal, the term and schedule for the current legislative project has been set as 24.10.2023-31.12.2025.

Although the timeline is relatively tight for achieving such a massive and fundamental change to the current system, there is at least a commitment in the government program that the introduction of the license-based model must be based on careful research. Therefore, the responsible government officials assigned to the legislative project will certainly listen to the views of those in the gambling industry and those seeking licenses in the future, on how to achieve the goals set for the new license-based model.

As an indication of the above, the Ministry of the Interior will organize a hearing already on November 28, 2023, where the parties responsible for the legislative project invite experts in the field to discuss of the process and provide expert opinions.

What Does the Legislative Project Mean for Gambling Industry Operators?

The initiation of the legislative project provides an opportunity for operators seeking entry into Finland's opening gambling markets to begin preparing for the license application. In the preparation, operators can take into account the already known aspects of what can be generally expected from the new legislation at this stage. Secondly, there is an intention to bring gambling operators expertise into the use of the legislative project. As was evident from the preliminary study, Finland lacks in many respects the industry expertise that is essential for building a fair and just gambling system, inherited from the long-standing monopoly-based gambling system.

In particular, the professional competence of gambling industry operators is needed in achieving the highest possible channelization rate, as ultimately, these operators will make the decision about whether Finland is an attractive market or if it is more reasonable to stay outside the licensing framework. Information related to this decision-making is needed, for example, when planning legislation regarding gambling marketing and sponsorship, where, as of the time of writing, decisions that are being planned may not attract operators to apply for a license.

Other clear themes for which input from gambling industry operators is sought, include defining the games that will fall under the license, where considerations have been made, for instance, regarding the prohibition of bonus games and gambling with cryptocurrencies. Additionally, the length and overall implementation of the much-discussed cooling-off -period, during which the opportunity to apply for a license is postponed if the operators have targeted the Finnish market in violation of law, have not been decided upon as of now.

Thereby there are many areas and items that gambling industry operators can impact on during the recently commenced legislative project.

In conclusion

At Nordic Law, we have extensive experience working with clients in the gambling industry, whereby we have accumulated knowledge of the industry's legislation throughout the EU. We will continue to assist clients in the gambling industry with a wide range of questions that may arise due to the changing situation and regulatory landscape in Finland.

We are happy to discuss with you how to enter the Finnish market as swiftly as possible and what methods operators can use to contribute their expertise to the legislative project.

Our Associate Trainee Mikael Huhtala took part in writing this article.

Nordic LawPioneer in Web3 and Fintech law