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Finnish politicians are opening up to the idea of a gambling licensing system, but the authority overseeing gambling has questioned the timing of the debate as more powers and staff are inbound.
Olli Sarekoski, Veikkaus CEO, said the company is currently subject to different requirements from its competitors which is driving players to unlicensed online operators.
The monopoly’s market share has fallen by 5 percent compared with the same period last year and it is now nearing 50 percent, which Sarekoski calls a “critical limit”.
“Unless this drastic downward trend can be stopped, we should start considering whether all gambling should be made subject to the same regulation in Finland. That could serve the prevention of the harmful effects of gambling as a whole, secure the company’s future, and thereby work to the benefit of the Finnish people,” Sarekoski said.
A spokesperson for Veikkaus said the company cannot comment further on the situation due to its political nature.
The comments first emerged in Veikkaus’ latest report, which has sparked a political debate about the future of the monopoly system.
Finland’s new Lottery Act came into effect on January 1, 2022; however, some parts of the law will be introduced at the beginning of 2023, such as empowering the National Police Board to begin payment blocking.
Anssi Airas, senior adviser for gambling administration at the National Police Board of Finland, told VIXIO the new law also gives more resources to the authority, which will be used to hire more staff to significantly improve its ability to undertake enforcement checks.
However, additional staff have not been recruited yet.
The new law also gave the police the power to intervene in social media marketing and sanction influencers as well as clamp down on international TV advertising.
Taking these changes into account, Airas says the timing of the debate around the monopoly’s market share, “is interesting, as Veikkaus has e.g. recently been granted the right to market betting services”.
“Also, new legislation has given us, as the supervisory authority, several new tools and increased our resources to enforce legislation in order to prevent gambling-related harm and strengthen the monopoly system in line with the Government Programme,” Airas said.
The increased attention from the political sphere in the debate was highlighted in the newspaper Demokraatti, which is associated with the Democratic Party.
Almost all parties, except for the Christian Democrats, are open to the idea of exploring a licensing system for gambling, with most acknowledging that any change would require further investigation and the introduction of new legislation which could take years to implement, according to the newspaper.
Jari Vahanen, a former Veikkaus executive now of Finnish Gambling Consultants, said Veikkaus’ market share “collapsed” during the first half of 2022, dropping from 74 percent of the overall market share, including land-based, to less than 67 percent.
The main challenges are in the sports betting and online casino games business, where it is estimated that the monopoly controls only a third of the market share, he told VIXIO GamblingCompliance.
Vahanen agrees the additional incoming regulatory powers will “temporarily reduce gambling for offshore companies” but he believes the effect “will be small and short-term”.
“Veikkaus’ executive management has understood that maintaining the company’s competitiveness requires the same operating conditions for all operators. This can only happen through a licence-based system,” Vahanen said.
He believes the operator is willing to move to a licensing system “as soon as possible”.
“It is assumed that the matter will be officially taken up for consideration when a new government is established in Finland after the parliamentary elections in April 2023,” Vahanen said.
Veikkaus' profit was €680.2m in 2020, a 32.6 percent drop compared with 2019. In 2021, profit remained around €680m.
In its latest financial update, Veikkaus recorded a profit of €330.8m for January to June 2022, a year-on-year increase of 2.3 percent, despite gross gaming revenue dropping by 2.1 percent to €515.9m.
