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Finnish state-owned gambling operator Veikkaus is set to remove up to 240 jobs amid a business review.

A further 195 employees could see “significant changes in the terms of employment” as part of the review, according to a statement published on the operator’s website.

The changes are expected as Veikkaus prepares to move part of its online operations into the international licensed gambling market, it said.

While Veikkaus is set to maintain its lottery and slot machine monopoly in Finland, its online operations are set to expand into the international market while also preparing to compete with new licensees in the local market.

Finnish licensing background

In June, Finland’s government made a commitment to introduce a new licensing system for commercial gambling operators by 2026.

The new regime is expected to cover both online casino and betting.

At present, commercial gambling operators are not able to get a licence to offer online gambling in Finland, but can still do so through international regulatory authorities such as those in Curacao, Malta and the Isle of Man.

Finland’s government said the reason behind the introduction of a new licensing system is to address and mitigate the adverse consequences of gambling by moving customers away from grey market operators.

Veikkaus CEO Olli Sarekoski has previously made calls for the introduction of new gambling regulations in the country.

Veikkaus plans

As a result of the new regime, Veikkaus said it plans to invest heavily in its online business after it is spun off from the monopoly lottery business.

“Preparing for changes in the gaming industry and internationalisation are a really important part of Veikkaus’ growth strategy,” said CEO Sarekoski.

“We are building a future where Veikkaus is Finland’s most successful gambling company and a major player in the international market.”

This month, therefore, the business will begin negotiations affecting almost the entire organisation, it said.

In addition to the 240 likely job losses and further changes to 195 other roles, Veikkaus plans to reduce the number of land-based arcades it operates in Finland from 65 to between 40 and 50.

It will also discuss the possible closure of the Tampere Casino.

“We want to be competitive in the future licence market and vital in the monopoly market. That’s why we need changes in our operations that affect the entire company,” said Sarekoski.

“It means many parallel changes. We go through the entire organisation from the point of view of profitability and growth.

“We also have to make difficult decisions. For some, these changes may mean the end of the employment relationship,” he concluded.

Finland’s government has committed to dismantling Veikkaus’ long-standing gambling monopoly and will introduce a new licensing system no later than 1 January 2026.

The government programme, as first reported by Finnish newspaper Iltalehti, suggests the new licensing system will cover online casino games and online betting.

Under the proposed changes, Veikkaus’ exclusive operations and competitive market operations will be separated into different companies within the same group.

The operator is expected to maintain exclusivity over the lottery, but no other verticals.

The primary objective of the government’s reform agenda is to address and mitigate the adverse health, financial, and social consequences associated with gambling.

Additionally, the government hopes to improve the efficiency of the gambling system by enhancing channelisation.

Last year, Veikkaus acknowledged losing market share to unregulated iGaming platforms.

This development prompted Veikkaus’ CEO to advocate for a shift away from Finland’s monopoly model in favour of implementing a licensing system.

The government paper states that the existing gambling policy has proven inadequate, as gambling-related issues have become a significant problem for a portion of the Finnish population.

Furthermore, unregulated operators can generate revenue without paying licence fees and taxes.

Key measures

Key measures outlined in the reform include strengthening supervision of the gambling industry.

The government plans to allocate more funding and resources to ensure effective oversight, with a particular focus on combating money laundering.

Additionally, the relocation of gaming machines to supervised facilities will be examined, and consumers will have the option to self-exclude from all licensed services through a single platform.

Responsible marketing practices are also highlighted in the government’s reform plans, with an emphasis on channeling consumer consumption towards licensed gambling providers.

Marketing efforts will be closely regulated to prevent the promotion of harmful gambling habits, and targeting minors in gambling advertisements will be strictly prohibited.

The government has stressed the importance of moderate and responsible marketing, requiring explicit consent from individuals.

The personalised marketing of gambling without prior consent will be prohibited.

Finnish authorities have launched an investigation into a Malta-based company for alleged illegal advertising aimed at Finnish customers.  

While the Finnish National Police Board (NPB) did not disclose the company’s name, Finnish public broadcaster Yle has identified the company as Gammix.

The NPB accuses 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, according to the NPB.

Chief inspector Johanna Syväterä said the marketing campaign was not related to existing customer relationships and was intended to expand the operator’s customer base.

Gammix allegedly used Finnish-language affiliate websites and social media influencers with limited recognition outside Finland to promote its campaign.

The Finnish authorities are particularly concerned about the marketing of gambling products to minors.

Increase in reports

The NPB said that its own marketing campaign has been instrumental in raising awareness of illegal gambling advertising practices and has helped to receive notifications from citizens.

In January, the NPB released a series of social media ads that have created controversy in the iGaming industry due to the nature of their content.

According to Syväterä, the campaign had a significant impact on increasing marketing-related notifications, with almost a 33% increase observed.

This has enabled authorities to focus their surveillance efforts on areas with the most active marketing activities.

In mainland Finland, the marketing of gambling is strictly prohibited, outside of advertising monopoly operator Veikkaus.

The NPB has sent a request for clarification to Gammix and may impose a fine for illegal marketing practices.

iGaming NEXT has also reached out to Gammix and the NPB for comment.

Finland’s Lotteries Act empowers authorities to impose administrative penalties on companies, up to 4% of their turnover and a maximum of €5m.

The Finnish authorities are determined to take action against operators who advertise their products to Finnish players, despite the ban.

Last month, Gammix was hit with a €4.4m fine in the Netherlands for ignoring a cease-and-desist order from the regulator.

Eurosport case overturned

However, just yesterday (19 April) the Helsinki Administrative Court overturned the NPB’s decision to ban gambling advertising on Eurosport 1 (Finland).

The NPB had prohibited the TV channel from marketing gambling products on the channel.

The NPB argued that the gambling ads shown on Eurosport Finland, which were broadcast from France to Finland, were not permitted by the Lotteries Act.

However, the Administrative Court found the decision to be in violation of the EU’s Audiovisual Media Services Directive (AVMSD).

The Court ruled that the NPB had restricted the transmission of television broadcasts from another EU member state in Finland, which was against the AV Directive.

The decision can still be appealed to Finland’s Supreme Administrative Court.

“The ruling was well-written and left no doubts. I would consider it a waste of resources for the NPB to appeal,” Antti Koivula, partner and legal adviser at Finnish gaming law firm Legal Gaming told iGaming NEXT.

He stressed that the ruling is significant as it is the first time a Finnish court has examined the NPB’s authority to intervene in TV broadcasts from another EU state.

Nonetheless, Koivula believes the the impact of the case will be limited, as it only concerned the AVMSD and not the Finnish Lotteries Act.

Finland is currently in the spotlight as the country is removing its monopoly model on gambling and considering the introduction of a licensing system.

Finland is currently the centre of attention in the iGaming industry as the country is in the process of removing its monopoly model on gambling and considering the introduction of a licensing system.

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.

While the end of Finland’s gambling monopoly model seems ever more likely, Swedish trade organisation BOS has insisted on change at state-run gambling operator Svenska Spel.

“The current gambling system needs to be changed,” Velipekka Nummikoski, vice president of Finnish state-owned gambling and lottery monopoly Veikkaus told Finnish news agency STT yesterday (28 December).

“A situation where Veikkaus has a formal but not actual monopoly” is not in anyone’s interest, Nummikoski said.

In August, Veikkaus CEO Olli Sarekoski kickstarted a fresh discussion on Finnish gambling regulation.

He stressed that Finland needs to start thinking about bringing all gambling under the same regulation as Veikkaus’ online revenue and market share dropped significantly.

This move would mean dismantling Veikkaus’ monopoly and switching to an international licensing model.

“The discussion has been heating up for quite some time now and there appears to be very little disagreement,” Antti Koivula, partner and legal adviser at Finnish gaming law firm Legal Gaming, commented on LinkedIn today (29 December).

Koivula previously told iGaming NEXT that he expects Finland to have a licensing system in place by 2026.

With three months to the Finnish parliamentary elections, Koivula now wrote that the main question is whether the current government will initiative the process prior to the elections, or if the industry will have to wait for the next government to do it.

Meanwhile in Sweden, Gustaf Hoffstedt, secretary general of the Swedish trade association for online gambling BOS, urged the government to sell the betting and online casino part of governmental gambling operator Svenska Spel in 2023.

In an opinion piece for Swedish newspaper Dagens Nyheter, Hoffstedt stressed the state should have no particular advantage in this market and that the presence of Svenska Spel is an infringement on commercial gambling.

There are currently 70 licensed operators in the competitive market fighting for market share, and Hoffstedt argued that competition is already fierce and would remain so without the state’s presence as a commercial casino operator and bookmaker.

“Normally, the state engages in business activities when the market itself has failed, above all in terms of competition,” Hoffstedt wrote.

“However, no one who has followed developments in the Swedish gambling market can claim that there is too little competition between the 70 companies that operate in competitive gambling,” he added.

Hoffstedt concluded that the Swedish government needs to establish a “fundamental distinction” between being the ruler setter of the Swedish gambling industry and a commercial operator.

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 iGaming technology supplier EveryMatrix saw its financial performance exceed expectations in Q3 as the business continued to grow its bottom line.

Revenue for the quarter came in at €33.5m, an increase of 56% year-on-year.

Gross profit, which EveryMatrix said is the best reflection of its underlying performance, came in up 33% year-on-year at €16.8m, which was also a 13% increase over the previous quarter.

EBITDA for the quarter was up by 45% year-on-year at €6.4m, giving the firm an EBITDA margin of around 38%.

EveryMatrix’s online casino segment generated €7.7m of the total gross profit, up 31% year-on-year, while the sports segment made up around €5m of the total and platform services around €4m.

Growth was driven by the company’s product diversification and broad client base, EveryMatrix said, as it continued to overcome the effects of restrictions in the German online gambling market.

In previous years, EveryMatrix generated a larger proportion of its gross profit from Germany, but declines in the market in recent quarters have now been more than offset by growth in other markets around the world.

EveryMatrix group CEO Ebbe Groes: “I am pleased to see a fantastic third quarter, with global sales performance and very good financial results. Even more important, we won two new tier-1 clients in the quarter, Veikkaus in Finland and bet-at-home in Germany and international markets.”

The firm is currently live in 18 regulated markets on its own remote gaming servers. In Q3, it launched services with the Moroccan state lottery, MDJS, and its first US client, BetMGM, which went live with its SlotMatrix casino aggregator.

EveryMatrix signed a total of 14 new casino deals in Q3, with 22 new client launches within the vertical. It also signed a further 18 new affiliate platform deals and 11 sports betting deals, in addition to securing market entry in the Canadian province of Ontario.

The firm also signed a significant deal with bet-at-home in Q3, which is expected to go live with EveryMatrix products in Q1 2023, immediately becoming one of its top sports clients in terms of revenue and brand value, it said.

Another leading European operator to sign a deal with EveryMatrix during the quarter was Finnish state-owned gaming monopoly Veikkaus, which awarded a public tender to supply online casino games to EveryMatrix, lasting for a period of six years.

As of the end of the quarter, EveryMatrix had a cash balance of €21.1m.

“I am pleased to see a fantastic third quarter, with global sales performance and very good financial results. Even more important, we won two new tier-1 clients in the quarter, Veikkaus in Finland and bet-at-home in Germany and international markets,” said Ebbe Groes, group CEO of EveryMatrix.

“EveryMatrix launched with BetMGM in the US and Morroco’s state-owned lottery MDJS. The group’s record gross profit across all business segments clearly underlines our strong market position.”

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.

Finland’s move to adopt a licensing model is becoming increasingly likely and a fully regulated gambling market could become a reality in the country by as soon as 2026.

iGaming NEXT took a deep dive into the gambling market of the EU’s northernmost country and explores what the potential end of Finland’s state monopoly could mean for the iGaming industry.

Finland is the only EU member state which to date still operates an exclusive online gambling monopoly model.

However, last month, Olli Sarekoski, CEO of state-owned gambling company Veikkaus, kickstarted a fresh discussion on Finnish gambling regulation.

Veikkaus, the only permitted gambling company in the country, was founded in 2017 when three betting and gambling agencies merged: Finland’s Slot Machine Association, Veikkaus, and Fintoto.

When presenting Veikkaus’ H1 results, Sarekoski flagged that Finland needs to start thinking about bringing all gambling under the same regulation. This move would mean dismantling Veikkaus’ monopoly and switching to an international licensing model.

Currently, foreign iGaming companies are not allowed to set up in Finland or advertise in local media. However, there is no legislation in place that prevents players in Finland from accessing the websites.

Losing market share

One reason for the growing opposition to the monopoly model is that unregulated (offshore) operators are capturing an ever larger share of the market.

According to H2 Gambling Capital, in 2017, Veikkaus generated €1.78bn in total gross gaming revenue (GGR), which included income from both retail and online products.

The data set also shows that offshore operators generated €240m in GGR during the same year.

However, by 2021, Veikkaus’ GGR dropped to €1.12bn, while the unregulated revenue total increased to around €400m, and is even expected to reach €500m this year.

“Veikkaus is losing market share as its digital offering is not as attractive as that of other iGaming companies, but I do not expect to see any significant traction on the proposal before the next parliamentary election in April 2023,” Antti Koivula, partner and legal adviser at Finnish gaming law firm Legal Gaming told iGaming NEXT.

However, Koivula also pointed out that it’s not a question of if but when. “My best guess would be that by 2026 Finland will have a licensing regime in place as this would allow sufficient time to prepare the legal basis,” Koivula said.

Political support

Meanwhile, last week (9 September), Demokraatti, the newspaper of the Finnish Social Democratic Party (SDP), asked seven parties in the Finnish parliament about their position on the matter. Only one of the parties stated they would continue to support the country’s monopoly model while the others were open to considering a licensing model.

Until recently in Finland, it was unheard of that political parties would consider anything but the current monopoly regime, according to Koivula.

The recent change in attitude will come as welcome news to the international iGaming industry.

“We welcome Veikkaus’ new position on the future of the Finnish gambling market,” Rolf Sims, public affairs manager at Kindred Group, told iGaming NEXT.

“A licence system is the only way to build a sustainable gambling market in Finland. We look forward to contributing and taking part in the establishment of a better market and the best licensing conditions in Finland, as we have in several other markets,” he added.

Sims’ thoughts were echoed by his boss and Kindred chief executive Henrik Tjärnström during the operator’s recent Capital Markets Day event in London.

Legal Gaming’s Antti Koivula: “We have the opportunity of a lifetime to properly regulate the market and learn from the mistakes of other jurisdictions. However, the big question is whether the Finnish policy-makers will seek the input of those who understand the industry.”

“Both Norway and Finland are on their way to a re-regulation and we are convinced of that,” said Tjärnström. “They’re both at different stages of development. We believe Finland is ahead of Norway.

“We heard only a couple of weeks ago that the Finnish monopoly is in favour of a local re-regulation, and that’s very similar to what happened in Denmark in 2010 ahead of re-regulation in 2012.

“So that’s a positive step in Finland, but still nothing concrete yet. It normally takes at least two years between a country actually deciding something and implementing it,” he added.

Kindred has already felt the short-term negative impacts of re-regulation on revenue in both Sweden and the Netherlands, in 2019 and 2022 respectively, although regulation is undoubtedly a long-term positive for operators targeting regulated markets.

Finnish national Joonas Karhu, who leads Malta-based affiliate Bojoko.com, told iGaming NEXT he was glad that his “home country was finally doing away with the gambling monopoly as the last EU country to do so.”

According to him, a licensing model would bring many benefits to Finland. “I am excited to see the flow of new jobs and opportunities that this industry will bring to the Finnish people,” he said.

Currently, iGaming companies do not pay any taxes in Finland and also do not have to comply with Finnish responsible gambling legislation.

But it’s not just about economic activity. “We know, problem gambling rates are higher in monopoly markets. In Norway, the problem gambling rate has doubled in seven years and is more than four times higher than in Spain or the UK, countries which don’t have a gambling monopoly,” Karhu explained.

Payment blocking

While all signs point to Finland regulating, operators already active in the Finnish market should be prepared to navigate “a very complicated market” over the next few years, warned one CEO who spoke to iGaming NEXT on the condition of anonymity.

In January 2022, a new updated gambling law entered into force. The objective of the reformed Lotteries Act was to help Finland maintain the monopoly system of gambling while strengthening responsible gambling measures.

The Finnish authorities are intent on cracking down on operators which – in spite of the ban – market their products to Finnish players.

Under the new law, companies can be issued administrative penalties of up to 4% of the company’s turnover, capped at €5m.

Moreover, come next year, Finland plans to issue payment blocking orders against iGaming companies in violation of the Lotteries Act.

Koivula believes the gambling administration – the unit within Finland’s National Police Board  (NPB) responsible for overseeing the entire gambling sector – lacks the proper means to effectively stop foreign operators from targeting Finnish players.

The unit currently has a total headcount of 34, but Anssi Airas, senior adviser in the gambling administration of the NPB, told iGaming NEXT that the unit plans to recruit “seven to eight new specialists focused on payment blocking and illegal marketing” this autumn.

While foreign gambling operators will not be added automatically to the NPB’s blacklist, the police will instruct payment and virtual currency service providers to block transactions from players to operators who fall foul of illegal advertising or do not comply with the police’s prohibition decisions.

Future gazing

Meanwhile, the industry is turning its attention to what a future Finnish licensing model could be like.

There are fears that Finland could emulate the Swedish model, which operators say is overly restrictive due to deposit and bonus limits.

According to Koivula, this is a “valid concern” as Finland looks to Sweden for inspiration in many policy areas.

However, it appears the Danish model will also be looked at, while the idea of a “cooling off’ period, as was the case in the Netherlands, might also be considered.

“We have the opportunity of a lifetime to properly regulate the market and learn from the mistakes of other jurisdictions,” said Koivula. “However, the big question is whether the Finnish policy-makers will seek the input of those who understand the industry.”