Finland: Maarten Haijer interview with EGR
Maarten Haijer, Secretary General of EGBA, recently spoke to EGR about the review of Finland’s lottery act and why it was a missed opportunity for overdue gambling reform in the country. The full article is behind a paywall but you can find the Q&A below.
EGR: What is the problem with a monopoly model as opposed to a fully regulated licensed market?
MH: A monopoly is not the optimum model for regulating online gambling, particularly in respect to its negative effects on channelling and encouraging customers to play inside the regulated market. That is because online monopolies are impossible to maintain, in an effective way, in today’s global online marketplace where consumers can go from one website to another with ease and Finnish gamblers can easily find more choice and alternatives to Veikkaus, Finland’s gambling monopoly, elsewhere on the internet.
Gambling is a price-sensitive activity and, because the gambling offer available to Finns is so restricted, it is inevitable that some Finns will look towards international websites for better betting odds and return rates, higher potential winnings, and a wider product selection than those offered by Veikkaus. And the significance of this demand for alternatives is clear: a recent survey showed that 16.4% of Finland’s total online gambling spend, equivalent to €105m in taxable revenue, was spent by Finns on international betting websites in 2019. We think this is a conservative estimate but, even so, it does highlight the extent to which Finland’s gambling monopoly model in failing to ensure that Finns gamble on websites which apply Finnish consumer laws, are regulated in Finland, and pay taxes in Finland.
As these are the main reasons why any government regulates online gambling in the first place, we think that Finland’s monopoly model is failing and should be replaced with a multi-licensing model for online gambling, as every other EU country has already done.
Finland is the EU’s last gambling monopoly, and its authorities should look to the experiences of other member states to understand why they moved away from monopolistic online gambling regimes and the benefits (and challenges) of doing so. While certainly not perfect by default, multi-licensing is a much more optimum model for regulating online gambling because it provides the consumer with more choice locally to encourage them to play with gambling websites which are licensed and regulated in their country.
EGR: Veikkaus recently posted figures of 1.8% problem gamblers in Finland. Does having a monopoly make it easier to spot those who have problems or are developing problems with gambling as opposed to SCV model used in other countries?
MH: Problem gambling is an important and complex topic and regulators, operators and all other stakeholders need to work towards common solutions to promote safer gambling. In Finland, the government has long justified its state-run gambling monopoly with the argument that the state is better placed to protect consumers than private companies – but there is no evidence to suggest that any gambling monopoly-type model protects consumers any better than a licensing model.
On the contrary, if it were true, Finland would have the lowest rate of problem gambling in the EU since it is the only member state left with a state-run gambling monopoly. But that is far from being the case because Spain, for example, has a multi-licensing model and the problem gambling rate is 0.3%, much lower than in Finland. While it is difficult to compare problem gambling rates across jurisdictions, because how these rates are measured can be very different, it is clear that all other EU member states believe that a multi-licensing, rather than monopoly model, provides the optimum level of consumer choice and consumer protection.
EGR: Is Finland now too dependent on the monopoly model or is there still chance for a change of heart?
MH: The Finnish government’s recent proposal to introduce payment blockings for online gambling has been approved but, with its introduction, policymakers have missed an opportunity for meaningful and overdue gambling reform in the country. The introduction of PSP blockings is an implicit admission that many of Finland’s gamblers prefer to bet on other websites rather than that of the state-run monopoly – and this will not change. There are many reasons why they do so: the availability of better betting odds, and better diversity and expertise in the products offered, are to name a few. In the online world, consumers vote with their feet and that is why we will continue to encourage the government to rethink, rather than reinforce, the country’s online gambling monopoly model and advocate for the benefits of establishing a well-regulated, multi-licensing model for online gambling in Finland.
Finland should look towards the experiences of its neighbours – Denmark and Sweden – which recently moved to replace their online gambling monopolies with multi-licensing models. When Denmark replaced its online gambling monopoly with an open-licensing system in 2012, the extra competition on the market led to a significant drop in the amount of Denmark’s online gambling which was taking place on international websites – from 28% in 2012 to 8% in 2019. While in Sweden, the amount of its online gambling taking place on international websites dropped significantly – from 56% in 2016 to 15% in 2020, after the country replaced its online gambling monopoly with multi-licensing in 2019.
Both countries clearly benefited by replacing their online monopolies with a multi-licensing model: it resulted in more of their citizens playing within their respective regulated online gambling environments, more citizens were protected by local consumer protection laws, and more taxes were raised from online gambling in both countries because offshore gambling was significantly reduced. Importantly, also, the former monopoly companies in both countries were not negatively affected by the opening of the online market to competition through the introduction of multi-licensing.
Finland can achieve the same benefits. Replacing Finland’s online gambling monopoly with multi-licensing is not about getting more people in Finland to gamble, nor is it about defeating the monopoly company. Rather, it is the sensible way to meet the pre-existing demands of many Finnish gamblers who already seek alternatives to the monopoly and who currently prefer to gamble on international gambling websites – and to regulate and tax this activity. Both Denmark and Sweden have shown that replacing an online gambling monopoly can be done sensibly, while maximising the dividends for society and establishing more effective regulation of online gambling.
 Prevalence of at-risk gambling has decreased – gambling problems still as common as before, Finnish Institute for Health and Welfare (2020). The survey found that, in 2019, 16.4% of Finland’s online gambling revenue was spent with other operators than Veikkaus. When applying the survey findings to Veikkaus’ €537m online gross gaming revenue in 2019, it would mean that Veikkaus had a 83.6% share of Finland’s total onshore and offshore online gambling market revenue estimated at €642m, with operators other than Veikkaus accounting for the remaining €105m in revenue.
 Juego y Sociedad 2020, University Carlos III Madrid (2020). 84.9% of the population of Spain participates in some form of gambling activity each year and the country has a problem gambling rate of 0.3% (pages 90+).
 Report on illegal gambling, Danish Gambling Authority (2020), see page 14. The channelisation rate for Denmark’s regulated online market grew from 72% in 2012 to 92% in 2019.
 The degree of channlization on the Swedish online gambling market, Copenhagen Economics (2020), see page 10. The channelisation rate to Sweden’s regulated online market is estimated to be 81-85%, meaning at least 15% of online gambling activity takes place offshore.
The European Gaming and Betting Association (EGBA) is the Brussels-based trade association representing the leading online gaming and betting operators established, licensed, and regulated within the EU, including bet365, Betsson Group, Entain, Flutter, Kindred Group, and William Hill. EGBA works together with national and EU regulatory authorities and other stakeholders towards a well-regulated and well-channelled online gambling market which provides a high level of consumer protection and takes into account the realities of the internet and online consumer demand. EGBA member companies meet the highest regulatory standards and, in 2020, had 234 online gambling licenses to provide their services to 29 million customers across 19 different European countries. Currently, EGBA members account for 36% of Europe’s online gambling gross gaming revenue (GGR).