Finnish Gambling Licence: Gambling Guide
As Finland rapidly moves towards implementing a licensing model for gambling, the introduction of a gambling license in Finland seems increasingly inevitable. In the role of industry’s leading Finnish law firm, Legal Gaming provides expert insights on the latest developments in this area and serves as an authoritative author in various publications, including industry news, legal guides, and other publications. Legal Gaming’s expertise and experience in the field makes us a trusted resource for anyone seeking to stay up-to-date on the evolving legal and regulatory landscape of the Finnish gambling industry.
Gambling Laws and Regulations Finland 2023
This article was originally published in ICLG – Gambling Laws and Regulations – Finland Chapter.
Visit following website to access the original chapter in the ICLG’s Gambling Guide: https://iclg.com/practice-areas/gambling-laws-and-regulations/finland
CONTRIBUTORS
Minna Ripatti
Founding Partner and Attorney at Law
[email protected]
Antti Koivula
Legal Advisor
[email protected]
1 Relevant Authorities and Legislation
1.1 Which entities regulate what type of gambling and social/skill gaming activity in your jurisdiction?
Gaming – Casino gaming (including slots and casino table games such as roulette & blackjack), Poker, Bingo:
The Ministry of the Interior and the Gambling Administration of the National Police Board (“Arpajaishallinto”).
Betting – Betting, Sports/horse race betting (if regulated separately to other forms of betting), Fantasy betting (payment to back a ‘league’ or ‘portfolio’ selection over a period of time, for example in relation to sport or shares):
The Ministry of the Interior and the Gambling Administration of the National Police Board (“Arpajaishallinto”).
Lotteries – Lotteries:
The Ministry of the Interior and the Gambling Administration of the National Police Board (“Arpajaishallinto”).
Social/Skill arrangements – “Social” gaming with no prize in money or money’s worth:
Not regulated per se. May be considered gambling marketing, in which case same as above.
Social/Skill arrangements – Skill games and competitions with no element of chance:
Not regulated in the field of gambling.
1.2 Specify: (i) the law and regulation that applies to the Relevant Products in your jurisdiction; and (ii) – in broad terms – whether it permits or prohibits the offer of Relevant Products to persons located in your jurisdiction.
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.
2 Application for a Licence and Licence Restrictions
2.1 What regulatory licences, permits, authorisations or other official approvals (collectively, “Licences”) are required for the lawful offer of the Relevant Products to persons located in your jurisdiction?
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.
2.2 Where Licences are available, please outline the structure of the relevant licensing regime.
No licences are available.
2.3 What is the process of applying for a Licence for a Relevant Product?
No licences are available.
2.4 Are any restrictions placed upon licensees in your jurisdiction?
No licences are available.
2.5 Please give a summary of the following features of any Licences: (i) duration; (ii) vulnerability to review, suspension or revocation.
No licences are available.
2.6 By Relevant Product, what are the key limits on providing services to customers? Please include in this answer any material promotion and advertising restrictions.
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.
2.7 What are the tax and other compulsory levies?
According to the Lotteries Tax Act, the lottery tax is:
■ 5% of the total value of winnings distributed in a bingo
game, not including winnings entitling the winner to
participate in a new game.
■ 12% of the profit of gambling services provided by
Veikkaus under the exclusive right (5.5% in 2021, 3.4% in
2022 and 5% in 2023, due to the temporary amendments
made to the Lotteries Tax Act).
■ 30% of the total value of prizes in regards of other lotteries.
The Finnish Lotteries Act expressly states that all the proceeds of Veikkaus are to be used for the promotion of sports, science, health and social welfare, horse breeding and equestrian sports
2.8 What are the broad social responsibility requirements?
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.
2.9 How do any AML, financial services regulations or payment restrictions restrict or impact on entities supplying gambling? Does your jurisdiction permit virtual currencies to be used for gambling and are they separately regulated?
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.
2.10 What (if any) restrictions were placed during the
COVID-19 pandemic? Are they still in force?
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.
3 Online/Mobile/Digital/Electronic Media
3.1 How does local law/regulation affect the provision of the Relevant Products in online/mobile/digital/ electronic form, both from: (i) operators located inside your jurisdiction; and (ii) operators located outside your jurisdiction?
According to the Finnish Lotteries Act, the exclusive right system covers the provision of the Relevant Products in the territory of Finland. Thus, the provisions of the Finnish Lotteries Act apply to lotteries that are run remotely abroad, to the extent that their tickets are sold or supplied in the territory of Finland. The same applies to lotteries that are run in the province of Åland, to the extent that their tickets are also sold or supplied elsewhere in Finland other than in the Åland Islands. The Finnish Lotteries Act prohibits online gambling companies that operate in other countries from marketing their gambling services in the territory of Finland. Thus, the existing exclusive right system of Veikkaus also covers marketing of gambling. If gambling services are marketed from abroad, the National Police Board shall assess whether the purpose of the marketing is to promote the sales of the marketed gambling services specifically to Finnish consumers in Finland.
3.2 What other restrictions have an impact on Relevant Products supplied via online/mobile/digital/electronic means?
The PSP-blocking scheme will enter into force on 1 January 2023 (see question 2.9 above).
3.3 What terminal/machine-based gaming is permitted and where?
Land-based slot machines made available for public use are regulated and subject to the exclusive right system. Slot machines have to be placed in a supervised space. Slot machines shall not be placed in a space where their use could endanger safety or cause a public disturbance. At present, slot machines are allowed, in addition to casinos and gaming halls, in supermarkets, cafes, petrol stations, bars and other public spaces. Provisions on the types and maximum number of slot machines and specialty gaming machines in the spaces mentioned above are laid down by Government Decree. The number of physical slot machines has been reduced drastically during the past few years.
4 Enforcement and Liability
4.1 Who is liable under local law/regulation?
The exclusive rights operator, Veikkaus, is liable for all gambling services it provides to players under the Finnish Lotteries Act and other relevant acts, such as relevant AML legislation. Provisions on gambling offences and lottery offences are laid down in the Finnish Criminal Code, according to which a natural or legal person who unlawfully arranges or markets gambling can be subject to criminal sanctions. Since Veikkaus has a monopoly on the marketing of gambling, all other marketing of gambling is also prohibited and punishable In addition to the above, the National Police Board may also issue administrative prohibition orders to gambling operators, other entities and private individuals providing or marketing illegal gambling. Also, a conditional fine or administrative penalty may be imposed. Players are not subject any sanction for accessing and participating in gambling on foreign online gambling sites under the Finnish law. Foreign gambling operators are not subject to any sanctions based purely on the acceptance of Finnish customers.
4.2 What form does enforcement action take in your jurisdiction?
The National Police Board is responsible for monitoring the provision and advertising of gambling in Finland. They may prohibit illegal organising or marketing of gambling in Finland and impose conditional fines and administrative penalties on the infringer. They may also forward the case for criminal proceedings if there is basis to suspect a crime. Under the Criminal Code, persons facilitating unlawful gambling may be sentenced to a fine or to imprisonment for up to one year. Penalties for unlawful marketing consist of fines or imprisonment for up to two years. Fines or imprisonment for up to two years may be imposed for providing premises for a slot machine or casino game to be used by an unlicensed lottery operator.
4.3 Do other non-national laws impact upon liability and enforcement?
Finland is an EU Member State and directly affected by EU laws and regulations. Finland is also the only EU Member State that still has a comprehensive gambling monopoly in place. Under EU law, a gambling monopoly can only be justified if it can be considered the best possible way to control the negative effects of gambling to ensure public order, public safety and public health and to prevent the negative effects of gambling. Whereas several operators around Europe have used EU law and EU market freedoms as a shield when providing gambling services to other EU countries, arguing that the local legislation is not in line with EU law, the European Commission confirmed in 2013 that the Finnish gambling monopoly is in accordance with EU law. Regardless of the statement made by the European Commission back in 2013, among others, the Finnish Competition and Consumer Authority (“FCCA”) has criticised the legitimacy of the existing state monopoly in light of EU law
4.4 Are gambling debts enforceable in your jurisdiction?
Gambling debts are enforceable in respect of the debts incurred in the course of gambling services offered by the exclusive right holder, Veikkaus. The Finnish Lotteries Act prohibits running lotteries in such a way that players can participate on credit.
4.5 What appetite for and track record of enforcement does your local regulatory authority have? Have fines, licence revocations or other sanctions been enforced in your jurisdiction?
The National Police Board has taken measures against Veikkaus and other companies in terms of violations of the Finnish Lotteries Act. The Lotteries Act reform of 2022 provided a considerable increase in resources for the National Police Board towards the supervision of illegal marketing carried out mostly by foreign gambling operators, affiliates, influencers and other entities. In addition, the National Police Board was given more effective tools (administrative penalties, payment blocking system) to combat illegal advertising. As a result, their enforcement appetite is currently at an all-time high.
5 Anticipated Reforms
5.1 What (if any) intended changes to the gambling law/regulations are being discussed currently?
Currently a draft law, which would sever the link between Veikkaus and their beneficiaries, is pending in the parliament. The purpose of the draft law is to move Veikkaus proceeds as part of the normal state budget procedure from the beginning of 2024
© Published and reproduced with kind permission by Global Legal Group Ltd, London