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Legal Gaming Update is provided to our newsletter subscribers.

Below are listed topics and news covered.

PSP-blocking entered into force in Finland

PSP-blocking entered into force at the beginning of 2023. According to the National Police Board (the “NPB”) PSP-blocking limits transaction of funds from the player to those gambling companies that have received a prohibition order from the Police Board for marketing against the Lotteries Act. The goal of blocking payment traffic is to affect the gambling offer in Mainland Finland by limiting the availability of gambling to protect players from the harm caused by gambling and to secure the exclusive rights system.

Legal Gaming will remain at your service:
– Comprehensive risk assessments,
– Tailor-made legal memorandums,
– Assisting in sanctions/enforcement process,
– Licensing in several jurisdictions,
– Trainings and presentations

Are all among the services we offer. Further, we now offer for a fixed fee an analysis of the National Police Boards administrative cases in Finland. Details available on request. Contact

FINNISH GOVERNMENT ready to abolish the gambling monopoly

Regardless the current governments programme, in which strengthening the monopoly system is the corner stone of the Finnish gambling policy, the government has decided not only to support the change but also to hasten it. This was confirmed by Tytti Tuppurainen (SDP), Minister of European Affairs and ownership steering. Minister Tuppurainen stated that “there is a unanimous view within the government on abandoning Veikkaus monopoly on digital games.”

Minister Tuppurainen also said that she had rushed to start the study on the licensing system. According to Minister Tuppurainen, if the study is started at the beginning of 2023, the next government can already decide on the transition to the licensing system in the government programme. The Ministry of the Interior will make the decision on starting the study phase in the beginning of 2023. On practical terms this would hasten the transition easily by 6 months if not more.

The discussion has been heating up

“The current gambling system needs a change”
“The Veikkaus monopoly has come to an end”
“Dismantling Veikkaus monopoly is just a matter of time”

 

The first was a citation from Velipekka Nummikoski, Executive Vice President of Veikkaus; the second from Joonas Könttä, the Centre Party’s MP and; the third is a headline from the Centre Party’s newspaper Suomenmaa.

The recent articles in Finnish medias repeat the obvious rationale why Finland should abandon the current gambling monopoly system: Veikkaus has not had de facto monopoly in years and they are losing revenue and market share at an alarming pace. This does not serve the state’s fiscal aims nor the aim of reducing gambling problems.

The Finnish Player Barometer of 2022

The Finnish Player Barometer was published just before the turn of the year. It is a nationally representative survey made by university researches about the popularity of different varieties of game playing in Finland, including gambling. It paints a grim picture of the direction where the Finnish gambling monopoly is heading. The gambling related findings are quickly summarized: the monopoly operator Veikkaus has lost customers throughout their portfolio, with some game groups a considerable amount, in the last two years.

Some of the most interesting findings are:
– Veikkaus physical slot machines were played actively only by 4.6% of Finns in 2022 (while 8.1% in 2020)

– Veikkaus lottery and betting games were played actively by 31.6% of Finns in 2022 (38.1% in 2020)

– Gambling games are played actively on Veikkaus website by 18.3% of Finns (21.0% in 2020)

– Gambling games are played actively on foreign gambling websites by 2.9% of Finns (2.9% in 2020)

PSP blocking new proceedings will be opened jan 2023

PSPs are obliged to block all on-going money transfers from mainland-Finland to the blacklisted gambling operators from the beginning of 2023. Currently, the National Police Board has blacklisted two Curacao based operators and, additionally, “the administrative process for possibly imposing a prohibition is in progress regarding five foreign gambling operators”. It remains to be seen how many new proceedings will be opened in the beginning of 2023.

PSP-blocking instructions

The National Police Board has issued Guidelines and Policies regarding the PSP-blocking starting in Finland on January 1, 2023. These Instructions include judicial, technical and practical guidance intended for the PSPs. The Instructions are not available online.

The National Police Board is recruiting

It looks like the National Police Board has received the resources promised to them during the last legislative reform as they are currently recruiting new employees. They need workforce to monitor gambling marketing and illegal gambling activities and support the enforcement of the new PSP-blocking system.

Eurosport-decision further delayed

The National Police Board imposed conditional fines of EUR 800k for Eurosport on September 16, 2021 for broadcasting illegal gambling advertisements. Eurosport considered the decision “manifestly incorrect” and appealed to Helsinki Administrative Court on October 28, 2021 where the case has been pending ever since. The decision was first expected during the last summer but there were delays. Following this, 15 November 2022 was reserved for the proceedings, but it got postponed again. New court date has not been set yet, but it is initially expected on the spring 2023.

ICLG’s Gambling Guide

Updated version of the International Comparative Legal Guides, Gambling 2023 has been published and Legal Gaming’s Minna Ripatti and Antti Koivula authored the chapter on Finland. It is available for free in our website.

Gambling Laws and Regulations Finland 2023

PSP-blocking begins IN LESS THAN A MONTH

PSP-blocking in Finland begins in less than a month. The National Police Board has issued Guidelines and Policies regarding the PSP-blocking starting in Finland on January 1, 2023. These instructions include judicial, technical and practical guidance. Instructions are written in Finnish.

-Currently only two Curacao based entities are blacklisted (Nordic Tech Services and Viking Technology)
-The National Police Board (“NPB”) has on-going administrative processes against five other operators. They might lead to blacklisting the companies
-The NPB will publish the blacklist in the beginning of next year on their website
-More information regarding the PSP-blocking will be published during January 2023

If you as an operator are curious whether you’ll be in danger to be placed on the blacklist, as a PSP wish to know more about the upcoming requirements, or just wish to know how your business will be impacted, please do not hesitate to contact us.

The Finnish Gambling License Future seminar

The Finnish Gambling License Future seminar held on 30th of November 2022 in Helsinki was highly successful. The event gathered together roughly 80 Finnish experts, MPs and industry enthusiastics to discuss Finland’s upcoming change to licensing system. Legal Gaming Attorneys at Law participated in the organization of the event.

Speakers, commentators and moderators included:
– Addiction Prevention EHYT ry;
– Political parties: the National Coalition, the Left Alliance, the Social Democratics, the Greens, the Centre party, and the Swedish People’s Party of Finland;
– The Finnish Poker Player’s organisation;
– The Finnish Sports Bettors organization;
– Legal Gaming Attorneys at Law;
– The Finnish Gambling Consultants;
– Moderator’s representing the Finnish Gambling Association;
– Veikkaus;
– Paf.

Many great points were raised and Legal Gaming is looking forward to continue to develop this event that serves as a platform for the discussion and for exchanging ideas.

extra income of EUR 50 million to Finland

Abandoning the current gambling monopoly and shifting to a licensing system would bring an annual extra income of EUR 50 million to Finland, stated Petteri Orpo, the Chairman of the National Coalition Party, while introducing party’s shadow budget.

It is worth noting that though the National Coalition Party is currently in the opposition, they are a big leader in the polls while the parliamentary elections are a bit more than four months away, and Orpo is likely going to be the next prime minister of Finland.

Finnish political parties have agreed licensing system is the way to move forward

Finnish political parties have agreed licensing system is the way to move forward. This was among the many interesting facts covered in the Scandinavian Gaming Show‘s Finland panel moderated by Minna Ripatti on 3rd of November 2022.

We’ll provide the subscribers of Legal Gaming Update the notes that were used to summarize the recent developments in Finland and to guide the conversation:

2022 summary – the year of many faces

Lotteries Act (1047/2001) reform

– Aims: Strengthen monopoly + Responsible Gambling.
– Strengthens monopoly system (NPB’s resources, PSP-blocking, administrative penalties).
– Enables Veikkaus B2B operations.
– Responsible Gambling measures (i.e., comprehensive compulsory identification by 2024, Veikkaus customer data may be used in gambling research, marketing specifications).

Channelization rate decreases along with Veikkaus GGR

– Overall: 2017 88% -> 66% H1/2022.
– Online: 2017 70% -> 50% H1/2022.
– Competitive online market even lower (casino games ~40%, fixed odds sports betting ~20%).
– Veikkaus GGR 2017 EUR 1,8 billion -> EUR 1,0-1,1 billion 2022.
-Offshore 2017 EUR 200 million -> EUR 500 million 2022.
– EU law perspective & Veikkaus position in the opening market.

Draft law cutting the ties between gambling proceeds and the beneficiaries

– From the beginning of 2024 gambling proceeds will not be earmarked but part of normal state budget procedure.
– Monopoly loses its greatest lobbying force.
– Political parties have already reached a preliminary agreement on the matter and the draft law is extremely likely to pass.

2022 summary – towards licensing system

Veikkaus statements

Veikkaus CEO Olli Sarekoski in Veikkaus interim report on August 29, 2022:

”If the sharply declining trend of Veikkaus markets share cannot be stopped, Finland will have to start thinking about bringing all gambling under the same regulatory regime.”

Veikkaus VP Velipekka Nummikoski in YLE’s interview on September 9, 2022 underlined that Veikkaus is ready to give up its monopoly in Finland and presented license system in a positive light.

Support for the monopoly system is gone

-Finland has now reached the point where Sweden was just moments before publicly announcing they will shift to licensing system:

-Veikkaus (figures, disappointment to the Lotteries Act reform, realism).
-Beneficiaries (does not matter for them anymore).
-Politicians (decreasing proceeds).

Parliamentary elections in April 2023

Demokraatti’s poll: Only one minor party steadily supporting monopoly system while all the other parties are open to consider a change. Poll leaders National Coalition Party support diminishing monopoly system during next parliamentary term (2023-2027).

Finland moving towards licensing system

Veikkaus CEO, Olli Sarekoski, stated in Veikkaus interim report on August 29, 2022, that if the sharply declining trend of Veikkaus markets share cannot be stopped, Finland will have to start thinking about bringing all gambling under the same regulatory regime. Veikkaus VP, Velipekka Nummikoski, repeated Sarekoski’s statement in an interview on September 7, 2022. Nummikoski underlined that Veikkaus is ready to give up its monopoly in Finland and presented license regime in a positive light. In the past Veikkaus has been a strong supporter of its own monopoly demanding stronger action from the government to protect their monopoly position. Considering that, Veikkaus recent statements meant 180 degrees turn.

Veikkaus statements started a snowball effect and the tone has already started to change in the beneficiaries’ statements and in the media. Most importantly, the political parties are now open to consider the change. In Social Democratic Party’s (19,3% support in the latest poll) newspaper’s poll in September all the other parliamentary parties, except one minor party, the Christian Democratic Party (3,3%), were open to consider a change. Soon after that the current poll-leaders, the National Coalition Party (24,2%), came out with a public statement according to which they strongly support dismantling the Veikkaus monopoly during the next parliamentary term (i.e., 2023-2027). The ball is now rolling and the pace will increase after the parliament elections in Finland are held in April 2023.

The draft law is pending in the parliament

The draft law severing the link between gambling proceeds and the Veikkaus beneficiaries is currently pending in the parliament. It is expected to pass with flying colours as the parliamentary parties had already in February reached preliminary agreement on the matter.

A Member of the Finnish parliament lied after receiving 120,000 euros from PAF

Finnish MP was caught lying in his declaration of affiliation given to the Finnish parliament, after receiving EUR 120k as licensing income from PAF. What makes the matter even more awkward is that the MP represents a governmental party and he participated in the Lotteries Act reform process.

The art collection of Veikkaus

Veikkaus art sale was another thing that hit the headlines in Finland during the past few weeks. They were accused of transparency problems and art dumbing though the most interesting detail, why Veikkaus had an art collection in the first place, was not covered.

The Blacklist / PSP blocking

The NPB has informed us that the Blacklist will be made publicly available on the NPB’s website once the PSP-blocking begins in the beginning of next year. The authorities are currently working on creating further instructions for the PSPs regarding the upcoming requirement to block all payments from players to operators placed on the Blacklist.

The Eurosports case

Helsinki administrative court is expected to decide the case already during the summer or early in the autumn. The substance of the case concerns applicability of the AVMS-Directive and more precisely whether the country-of-origin principle applies. It appears that Eurosport has the upper hand in the case and they are likely to win. It will be interesting to see how the case will affect the status quo and how it will be covered by the Finnish media.

critics towards veikkaus and beneficiaries relation

The National Audit Office of Finland (“NAO”) criticised in their report published June 3rd the way how the Finnish government moved the Veikkaus beneficiaries funding to the state budget. According to the NAO, the principles of the expenditure framework system were violated. The main problem in this regard was that the state budget did not have room to cover the shortage of funding for Veikkaus beneficiaries caused by Veikkaus proceeds considerable decrease but the government decided to cover the difference nevertheless. This incident has no consequences on the practical level though it is a slight political setback for the current government.

until April 2023 no changes are expected

The next Finnish parliamentary elections are held in April 2023 and until then no changes will be made to the current gambling monopoly system. The party receiving the most votes will get the PM seat and they’ll be responsible for deciding with whom to form the next government. The right-wing parties (“Kok” and “PS”, marked with dark blue and light blue in the graph), especially the National Coalition (“Kok”, dark blue), are the most open minded to consider alternative systems for the current gambling monopoly whilst the left-wing parties (“SDP” and “Vas”, marked with red and dark red) along with the Centre party (“Kesk”, dark green) represent the other end of the spectrum. If and when the National Coalition party will be the biggest party during the next elections, it is possible, even likely, that the change towards licence regime will officially begin. The general atmosphere has already shifted considerably to that direction due to the fact that Veikkaus’ proceeds have fallen 1/3 and there’s been considerable amount of critical public discussion in relation to Veikkaus shortcomings regarding responsible gambling and the ability to prevent gambling problems.

IS-Liigapörssi -case

The Supreme Administrative court has held the main hearing in IS-Liigapörssi -case at the end of March 2022 and the decision is expected “by the beginning of the summer”. The applicability of the Finnish Lotteries Act (1047/2001) to skill games is in the centre of the case. It looks unlikely that the Supreme Court would take appellant’s side, but if that would happen, it could potentially have considerable consequences.

peluuri, the gambling HARM organization

The Finnish gambling harm organization Peluuri, funded directly by the national monopoly operator Veikkaus, has published its annual report for 2021. The key findings were that the role of online slots as a source of gambling harm has increased while Veikkaus physical slots caused considerably less problems than in the past. Biggest root source for gambling problems, i.e., from where the gambling of Peluuri’s clients started, was physical slots.

Veikkaus and their beneficiaries lobby

In February 2022 the Finnish Government’s parliamentary working group published a final memorandum, in which the link between Veikkaus and their beneficiaries was proposed to be diminished. Now the legislative process has officially been opened to implement the proposed changes. According to the initial plans the new law will enter into force in the beginning of 2024. The Veikkaus beneficiaries, consisting of 4000+ organizations, associations and other entities, have traditionally formed the greatest lobby for monopoly and Veikkaus. Diminishing the link will be a huge blow for Veikkaus and the pro-monopoly atmosphere.

the Gambling Policy Programme

On May 10, 2022 the Gambling Policy Programme (“GPP”), prepared by the Ministry of social affairs and health, was published. It sets out guidelines for preventing and reducing gambling-related harm gambling by 2030. At this point, the GPP does not include any concrete actions or solutions on how the aim of reducing and preventing gambling related harm will be achieved.

 

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