Finland to move on from monopoly model as government study proposes 25% GGR tax
As Finland considers removing its monopoly model on gambling, a government study has recommended that maintaining the status quo is not an option to improve the country’s channelisation rate.
Time up for Finland’s monopoly?
Discussions to end the monopoly model were initiated by Olli Sarekoski, CEO of state-owned gambling company Veikkaus, in August 2022.In January, the Finnish government confirmed plans to officially dismantle the current gambling monopoly and launched a study on the best way forward.
The study, conducted by the Ministry of the Interior and now presented to Finnish lawmakers, outlined two potential options for regulating gambling.
The first option would involve giving regulatory authorities more power to block unlicensed providers from abroad, while the second option would establish a new licensing model for commercial operators.
The study suggested that the introduction of a licensing system would improve the channelisation of users to legal offerings.
Online operations currently make up around two-thirds of Finland’s gambling market, and its overall share of gambling revenue in the country is expected to increase further in the future.
The study emphasised that any decision to introduce a licensing system should prioritise reducing gambling harms, with mandatory identification for all players, a self-exclusion scheme, and measures to prevent unlicensed gambling from abroad.
Weak channeling ability
The study noted that the “channeling ability” of Finland’s current monopoly system is weak with regard to online gambling, and it could deteriorate further if an even larger share of gambling moves online.
The research group suggested that to prevent an uncontrolled weakening of the channeling ability of the current monopoly system, decisions regarding the development of Finland’s gambling system should be made promptly after a new government is elected in April 2023.They also noted that if a decision in principle regarding the introduction of a licensing system were to be made during 2023, it would be possible to implement such a system during the same legislative period.
Finland went to the polls on 2 April.
Finland’s conservative National Coalition Party (NCP) gained 20.8% of the votes. The right-wing populist party The Finns came in second with 20.1%, and the Social Democrats, led by Sanna Marin, came in third with 19.9%.
As none of the top three parties gained a majority, a new centre-right government is likely to be formed in Finland.
More resources required
Should a licensing system be introduced, the study proposed a tax rate of around 20% to 25% on GGR to all licensed companies.
They also cautioned that the transition to a licensing system would require significant additional resources for the supervision of gambling. The expenses of supervision activities could increase annually to around €30m, which is six times more than in 2022.“The report recognises that the channelisation rate is already relatively low and expected to decrease further at an alarming pace,” Antti Koivula, legal adviser at Legal Gaming Attorneys at Law, told iGaming NEXT.
“Based on the evidence obtained from reference countries, it would be possible to achieve a higher channelisation rate and thus also more effective prevention of gambling problems through a partial licensing system,” he added.
The study compared Finland’s current system to those in Sweden, Denmark, Norway, the Netherlands, and France and found that only Norway had a similar monopoly system.
Norway, by contrast, last week doubled down on its monopoly with the government set to introduce DNS blocking on unlicensed gambling websites from 1 January 2024.