Posted on: April 20, 2023, 03:59h.
Last updated on: April 20, 2023, 03:59h.
A study into Finland’s gaming industry has been in the works for months in an effort to determine if its monopoly, Veikkaus, is working. Even the state-run organization believes it’s not 100% effective and the chances are increasing that it will lose some of its control.
The task of the working group, established by the Ministry of the Interior, has been to find out what should be done about Finland’s gambling monopoly. The initial results show issues that confirm why monopolies don’t work, with the Finnish government losing considerable revenue.
Veikkaus wants change as quickly as possible, according to a statement it has released. Its monopoly could shrink to slot machines and lottery products, but it might compete with foreign operators in the iGaming segment.
Finland Loses Over $500 Million in Revenue A Year
The government-led study determined that at least €500 million ($547 million) a year already flows from Finland to foreign gambling companies. At the same time, more than 50,000 Finns suffer from gambling addiction, a problem that is exacerbated by a lack of oversight.
As a result, there are two solutions 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 strengthen the control Veikkaus has even more and clamp down on unlicensed online gaming activity.
Across Europe, with the exception of Finland and Norway, the first option has become the norm. In the other two, numerous studies have already proven that gaming monopolies are failed endeavors.
In the countries with licensing systems, which the working group has compared, 80-90% of gambling has been channeled to licensed companies. The so-called degree of channelization is significantly higher than in Finland today.
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 isn’t working.
Economist Harri Sailas, who heads the working group studying the issue, is still on the fence.
More Research Underway
In the working group’s deliberations, Veikkaus’ monopoly would still remain. It would retain the exclusivity of slot machines in supermarkets, physical casinos, retail betting and the lottery.
However, it would give up ground online, where Finland is currently losing ground. Veikkaus could acquire an online gaming license like other operators, but would no longer enjoy its monopolistic control.
Should the online casino and sports betting markets be opened, Sailas is in favor of a tax rate of between 20-25%. This, he explains, would cover the costs of establishing and maintaining a regulator while delivering significant revenue to the government. It would also give Finland funds to try to block unlicensed platforms.
The debate continues, and there’s no hint on which way the government will go. However, based on the evidence and the feelings of those in the Riksdag, it’s increasingly possible that Veikkaus will have to concede defeat in some gaming segments.