The Finnish National Police Board (NPB) has taken action against Betsson’s BML Group subsidiary by prohibiting the company from marketing and imposing a conditional fine of €2.4m.
According to the NPB, Betsson’s subsidiary advertised extensively in Mainland Finland across various channels, which goes against the Finnish Lotteries Act.
The Finnish authorities claim that Betsson had been given multiple opportunities to express its views and adjust its activities to comply with Finnish gambling regulations.
Although Betsson made some changes to its marketing channels, the NPB found the firm’s advertising continued to target Mainland Finland.
Nevertheless, the NPB did consider the measures implemented by Betsson to reduce its marketing activities as a mitigating factor when determining the amount of the conditional fine.
“BML Group has been in dialogue with the National Police Board in Finland and respectfully disagrees with this decision. The prohibition order will likely be appealed.”
Betsson spokesperson
Scope and requirements
The prohibition order specifically targets materials on the group’s websites that directly or indirectly promote the sales of gambling services in Mainland Finland.
This includes marketing communications aimed at consumers in Mainland Finland, the use of Finnish celebrities in marketing campaigns, and the publication of podcasts, videos, and articles that promote Betsson’s offerings. The prohibition also extends to affiliate marketing.
To comply with the prohibition, Betsson must refrain from publishing new promotion materials that target Mainland Finland on its websites, remove all previously published marketing materials, and abstain from marketing on other websites in the future.
Appeal likely
The decision will come into effect on 3 June, but Betsson has the option to appeal.
Additionally, once the prohibition order is in force, the Betsson subsidiary will be added to the NPB’s payment blocking list
“BML Group has been in dialogue with the National Police Board in Finland and respectfully disagrees with this decision. The prohibition order will likely be appealed,” a Betsson spokesperson told iGaming NEXT.
At this time, Betsson said it does not want to provide any further comments on the matter.
However, the spokesperson added: “Betsson is committed to responsible gaming practices and ensuring a safe gaming experience for all our customers.”
Finland remains the sole EU member state that maintains an exclusive online gambling monopoly model.
Nonetheless, many operators argue that Finnish customers have the right to access websites according to EEA law.
However, last year, a new and updated gambling law came into effect, which reinforced the state’s gambling monopoly and implemented a marketing ban.
According to the reformed law, operators who advertise their products to Finnish players, despite the ban, can face administrative penalties of up to 4% of the company’s turnover, with a maximum limit of €5m.
The €2.4m conditional fine imposed on BML sets a new record high, surpassing the previous record fine of €800,000 for broadcaster Eurosport for violating gambling-related advertising regulations in Finland.
However, in April, the Helsinki Administrative Court overturned the decision made by the NPB to ban gambling advertising on the channel.
Malta-based Gammix has found itself at the centre of a police investigation by the Finnish National Police Board (NPB) but denies any wrongdoing.
In April, the NPB issued a press release stating that it launched an investigation into a Malta-based company for alleged illegal advertising aimed at Finnish customers.
While the NPB did not disclose the company’s name, Finnish public broadcaster Yle identified the company as Gammix.
On request, the NPB confirmed the company name later to iGaming NEXT.
The NPB accusations
The NPB accused Gammix of using aggressive marketing tactics to promote gambling games via various channels, including text messages, websites, and social media influencers.
The company’s Finnish-language marketing campaign even targeted minors through unsolicited text messages, the NPB said.
Gammix fights back
Gammix holds a B2C licence from the Malta Gaming Authority (MGA) since 2015.
Phil Pearson, director of Gammix, confirmed the company had received a report from the Finnish police stating that it launched an investigation to determine whether the company runs and markets gambling operations in Finland.
For context, Finland currently operates a monopoly model on gambling.
Only the state-owned gambling company Veikkaus is allowed to market gambling services in mainland Finland, although the Nordic country is considering the introduction of an international licensing system.
However, several operators argue that Finnish customers have the right to access websites under EEA-law.
Upon receiving the police report, Pearson said Gammix informed the Finnish police that the company operates under its MGA licence in compliance with Maltese and EU law.
Disputing claims of marketing to minors
Most importantly, Pearson said the report the company received did not accuse Gammix of promoting its services to minors.
Pearson commented: “Yes, we operate in Finland, but we have very high standards of responsible gambling and are surely not targeting minors or allowing them to play.”
Moreover, Gammix said it is “disconcerting to say the least” for the Finnish Police to make public accusations about Gammix without informing the company, especially since the investigation is still in the due process stage of gathering evidence.
This, Gammix said, was casting serious doubts on whether the company has an effective right to be heard, and not a prejudged one.
In addition, the company stated the police had confirmed the allegations to the media without first informing Gammix. This, in itself, is a challengeable act, Gammix claimed.
Gammix has responded to both the police and Finnish broadcaster YLE regarding the allegations made against it and trusts that due process will be followed.
Additionally, the company has made it clear that it is reserving all of its legal rights in case any defamatory or libellous statements about it are made.
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.
The Finnish government has officially confirmed plans to dismantle the current gambling monopoly, held by Veikkaus, and implement a licensing system in its place.
This decision was made public by Tytti Tuppurainen, minister of European affairs and ownership steering, in an interview with Finnish media outlet MTV Uutisten last week (29 December).
Discussions to end the monopoly model were initiated by Olli Sarekoski, CEO of state-owned gambling company Veikkaus, in August 2022.
Sarekoski pointed to Veikkaus’ declining digital revenue and market share as evidence that Finns were turning to unregulated websites for their gambling needs.
As a result, he called for the introduction of a licensing regime and uniform gambling regulations to better protect consumers.
Tuppurainen has expressed a desire to see this process initiated as soon as possible and has called for an immediate start to a study of the potential pros and cons of such a system.
While the government is ready to give up Veikkaus’ monopoly, Tuppurainen stated that a change to a licensing model requires extensive legislative changes.
However, if the study is completed by the beginning of 2023, Tuppurainen believes that the next government will be able to make a decision on transitioning to a licensing system in their government programme.
Parliamentary elections will be held in April in Finland.
According to current polls, Sanna Marin’s government coalition, made up of the Social Democratic Party, the Centre Party, the Greens, the Left, and the liberal Swedish People’s Party, is expected to defend its majority.
The National Coalition Party (KoK), a centre-right political party, is currently polling as the strongest party and has also expressed support for the introduction of a licensing system for the gambling industry.
According to Tuppurainen, the Finnish Ministry of the Interior will soon determine the timeline for commencing the study phase, which could potentially expedite the transition process by several months.
Initially, industry experts believed that Finland would have a licensing system in place by 2026. However, given the latest developments, this could already become a reality in 2025.
Meanwhile, Tuppurainen indicated that Veikkaus will continue to hold the monopoly on lotteries and slot machines.
Finnish authorities will in January publish a blacklist of operators that target Finnish players and instruct payment service providers (PSPs) to block deposits to these companies.
While currently only two Curaçao-based entities, Nordic Tech Services and Viking Technology, are on the blacklist, the gambling administration within the National Police Board said it has initiated administrative procedures to issue blocking orders against five further foreign operators.
The rationale behind the payment blocks is to reduce the availability and accessibility of gambling offerings, the gambling administration said.
Finland is the only EU member state which to date still operates an exclusive online gambling monopoly model, with Veikkaus the only permitted gambling company in the country.
The gambling administration estimates that between 5% and 6% of the Finnish population uses online gambling websites, which costs the country somewhere between €250m and €300m annually.
Juhani Ala-Kurikka, senior adviser at the gambling administration, said payment blocks should “reduce the willingness” of unregulated gambling operators “to target marketing at players” in Finland.
The gambling administration said the blocks would probably affect occasional and moderate players more significantly, and ultimately, increase awareness of consumer protection risks among this group of players.
Meanwhile, the impact on frequent, high-risk and problem players would be lower, the National Police Board estimated.
The payment blocks will restrict deposit payments from players to blacklisted gambling operators, but withdrawals will not be affected.
The gambling administration stressed that PSPs are obligated to block payments when instructed to do so by the National Police Board.
Should payment service providers fail to comply with a blocking order, the gambling administration can impose a fine.
Earlier this year, Olli Sarekoski, CEO of state-owned gambling company Veikkaus, ignited a fresh discussion on Finnish gambling regulation, including the potential introduction of an international licensing model.
B2B technology provider EveryMatrix has won a public tender to provide Finnish state-owned gambling and lottery monopoly Veikkaus with online casino content.
The six-year agreement was awarded to EveryMatrix after a competitive procurement process.
Last month, iGaming NEXT reported that Veikkaus’ digital offering moved into the spotlight after the company admitted it had lost market share to unregulated iGaming websites, which are considered more attractive, according to industry experts.
The situation caused Veikkaus’ CEO to call for an end of the Finnish monopoly model in favour of a licensing regime.
Meanwhile, Europe’s leading payment providers have cut ties with dot com-licensed gambling operators in Finland. As of 2023, Finland plans to issue payment blocking orders against iGaming companies which – in spite of a ban – still advertise their services in Finland.
Commenting on the cooperation with EveryMatrix, Veikkaus CPO Jan Hagelberg said: “Veikkaus is constantly improving its offering to stay as number one operator for Finnish casino players.
“EveryMatrix’s full-service platform offers us one of the industry’s best catalogues of games, including its proprietary in-house portfolio.”
Veikkaus will integrate the supplier’s CasinoEngine solution, iGaming Integration Platform, and source a catalogue of 65 game providers, with more to be added over the coming years.
EveryMatrix will also distribute proprietary content from its gaming studios, Spearhead Studios and Armadillo Studios, and content from its exclusive SlotMatrix partners, among other vendors.
“Winning Veikkaus as a client marks another major milestone for EveryMatrix,” said EveryMatrix CCO Stian Hornsletten.
“We are already working with several other state-owned monopolies and have enough experience in the field to deliver the best service to Veikkaus,” he added.
EveryMatrix has 700 employees across 10 countries and serves 150+ customers worldwide, including in the regulated US market.