The Finnish Ministry of the Interior has introduced a draft government proposal to reform the country’s gambling system. This proposal, which aligns with the Government Programme, aims to dismantle Veikkaus Oy’s current monopoly on betting and online casino games and open these markets to competition through a licensing model. The consultation period for this draft legislation ends on August 18, 2024.

Key Changes and Objectives

Under the new proposal, Veikkaus Oy will no longer hold exclusive rights to arrange betting and online slot machine games and casino games. These areas will be opened to competition via a licensing system managed by the Finnish Supervisory Agency. The goal is to reduce gambling-related harm and channel demand toward a regulated gambling system.

Currently, Veikkaus Oy maintains a monopoly over gambling games in Finland, but a substantial portion of online gambling occurs outside this system, involving enterprises not regulated or supervised by national authorities. The new legislation seeks to regulate these activities, ensuring better oversight and consumer protection.

Licensing and Supervision

The proposed act outlines the provisions for licensed gambling and its supervision. To increase regulation and minimize gambling-related harm, enterprises can apply for licenses to operate gambling games in Finland. There will be two types of licenses: exclusive licenses and gambling game licenses. Additionally, the provision of gambling game software will require a specific software license.

Licensing will require payment of an annual supervision fee to the regulatory authority. Lotteries, pools, totalisator betting, physical slot machines, and casino games will remain under exclusive licenses, maintaining Veikkaus’ monopoly over these areas. However, the monopoly and competitive market activities will be separated into different entities within the same group.

The government will decide on the annual compensation Veikkaus pays the state for its exclusive license. The proposed legislation also grants the state owner more flexibility regarding future decisions about Veikkaus Oy’s ownership, including reducing state ownership if deemed beneficial for shareholder value.

Marketing and Player Protection

The draft legislation includes stringent provisions on the marketing and sponsorship of gambling games. Licensed gambling enterprises can advertise within specific restrictions, ensuring moderate volume, scope, visibility, and frequency of marketing efforts. Prohibited marketing tools and practices include collaboration with social media influencers on their accounts and targeting minors or vulnerable persons.

A centralized register for self-imposed gambling bans will be introduced, allowing players to exclude themselves from any gambling games any license holder offers. The act will also govern the registration of gamblers, verification of their identity and residence, age limits for gambling, and the use of gambling accounts.

New Supervisory Agency

A new Finnish Supervisory Agency, operating under the Ministry of Finance, will replace the National Police Board as the regulatory authority. This agency will have extensive powers to regulate the market, including imposing administrative sanctions, prohibiting unlawful activities, rescinding licenses, and conducting test purchases. It will also oversee compliance with anti-money laundering and terrorist financing legislation.

The agency will use network barring and payment blocking to prevent unauthorized gambling and steer demand toward licensed operators. Additionally, the Ministry of Social Affairs and Health, through the Finnish Institute for Health and Welfare, will monitor, study, and assess gambling-related harms.

Implementation Timeline

The government plans a phased implementation of the new system:

• August 18, 2024: End of the consultation period.
• Spring 2025: Submission of the government proposal to Parliament.
• Early 2026: Opening of license applications for operators.
• End of 2026: Veikkaus’ monopoly on sports betting and online casino games ends, with the company split into separate entities.
• Early 2027: Suppliers can apply for software licenses, and licensed gambling activities commence.
• 2028: Requirement for operators to use only locally licensed software providers.

The draft legislation represents a significant shift in Finland’s approach to gambling, aiming to create a more regulated and competitive market. Feedback from industry stakeholders and government departments is being sought to refine the proposals before final submission to Parliament.

Source:

Draft legislation on new gambling system submitted for consultation, intermin.fi, July 3, 2024.

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Playtech, one of the world’s most important suppliers of technology and content for the iGaming industry, has announced it signed a live casino agreement with Veikkaus, the state-owned monopoly operator in Finland.

The partnership was formed at the end of a rigorous selection process, which concluded with Playtech securing the winning tender. The two parties have agreed to a long-term framework deal, which paves the way for an extensive partnership.

The initial duration of the contract is six years but the agreement contains the potential for extension. The deal includes the live casino vertical and is regarded as a significant milestone in the collaboration between Playtech and Veikkaus.

In fact, the two companies had been working together before, with their cooperation including online casino and poker as well as video lottery terminal machines. Moreover, Playtech supplied a casino management system to Veikkaus and now their collaboration will expand to include live casino technology and content.

The deal will see Playtech become the exclusive live casino content provider for Veikkaus, offering the Finnish state-owned operator network live dealer games and also exclusive live casino titles broadcast from a brand new Veikkaus-branded studio.

The new live casino studio will be established and operated in one of Playtech’s main studio facilities and the two companies will work together to establish the studio design and functionality. The studio will feature Finnish-speaking dealers in charge of blackjack and roulette tables.

An Important Milestone

Speaking of the new deal with Playtech, Riikka Seppänen, VicePresident for iCasino at Veikkaus, described it as “an important milestone” for the company, which has never offered live dealer games to its customers before.

“With Playtech’s network of Live games and their support in setting up our dedicated Veikkaus-branded studio, we are excited to offer our Finnish players an immersive and authentic gaming experience,” Riikka Seppänen added.

Fredrik Sylvander, Commercial Director at Playtech, declared himself “thrilled” to see his company get selected as the exclusive live casino partner for Veikkaus and added that this achievement “is a testament to the strength” of Playtech’s live casino offering.

“We are excited to support Veikkaus in their first launch of Live casino games, providing Finnish players with an exceptional gaming experience,” Fredrik Sylvander added. “Together, we will leverage our expertise and market knowledge to deliver a tailored Live offering that meets the needs of the Finnish market and exceeds the expectations of Veikkaus’ customers.”

Source: “Playtech and Veikkaus Forge Strategic Partnership to Elevate Live Casino Experience in Finland“. Playtech. February 22, 2024.

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The leading supplier of content and technology, powering online gambling operators across the globe, Playtech, confirmed a strategic partnership with the Finnish state-owned and monopoly operator, Veikkaus. The company disclosed details regarding the new collaboration on Thursday. Under the terms of the new agreement, Playtech agreed to power Veikkaus’ offering by delivering an extensive range of customized live casino games.

The latest new deal takes the collaboration between the duo to a new level. This is because previously, Playtech agreed to supply the Finnish state-owned monopoly with its retail VLT machines, casino management system, as well as online casino and poker games. Now, Veikkaus’ offering will expand further with the addition of live casino games from Playtech.

The new partnership follows a competitive Public Procurement Process. Ultimately, Veikkaus picked Playtech as the supplier of its live casino games, recognizing the company’s quality and innovative offering.

“We are thrilled to be selected as Veikkaus’ partner for Live casino games, and this long-term partnership is a testament to the strength of our Live product and further solidifies our position as a leading supplier in the Nordic region.“

Fredrik Sylvander, commercial director at Playtech

Fredrik Sylvander, Playtech’s commercial director, revealed that the company is excited to grow Veikkaus’ offering by delivering live casino games. He explained that this new collaboration builds upon the success of the partnership between the two companies. “We are excited to support Veikkaus in their first launch of Live casino games, providing Finnish players with an exceptional gaming experience,” added Sylvander. Finally, he predicted that the new collaboration would bring unrivaled entertainment and experiences for customers of the Finnish gambling monopoly.

The Partnership Marks a Milestone Achievement for Veikkaus

The deal with Playtech is expected to strengthen Veikkaus’ offering by delivering engaging live casino games. Per the strategic deal, the iGaming content supplier will collaborate with the Finnish gambling monopoly to deliver exclusive games from a new Veikkaus-branded studio. Ultimately, the games are expected to fit the preferences of Finnish players and provide immersive, engaging and entertaining experiences.

“We are delighted to collaborate with Playtech as our partner for Live casino games, following a comprehensive public procurement process.“

Riikka Seppänen, VP iCasino at Veikkaus

The collaboration brought excitement for Veikkaus with its VP iCasino, Riikka Seppänen, explaining that the company is thrilled to join forces with Playtech for the delivery of live casino games. The VP iCasino said that the deal represents an important achievement for Veikkaus as it marks the first time live casino games will become available for its players. Finally, Seppänen predicted the new partnership will bring exciting experiences, adding that it underlines Veikkaus’ dedication to supplying the best games for its growing customer base.

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Veikkaus, Finland’s state-owned gambling monopoly, has officially launched its new identification requirements. As announced in early November, the monopoly will now check the identities of players for all games.

In line with the identification protocols implemented for coupon games earlier in 2023, Veikkaus will now verify the identities of all of its players. The measure seeks to prevent harmed or excluded players from gambling and ensure a healthier gambling market. In addition to that, the identification measures will ensure that the Veikkaus is not allowing underage players to gamble.

The new identification system will work in the same way as the identification process for coupon games, such as Eurojackpot and Lotto. This means that players can confirm their identities with a Veikkaus Card, a Kela card or a digital Veikkaus card.

Veikkaus Says It’s the First Operator to Check the IDs of All Customers

Veikkaus representatives commented on the changes, saying that they will cement the monopoly as the first gambling company in the world to require identification for all of its games, be it digital or land-based.

According to Susanna Saikkonen, Veikkaus’ responsibility director, the identification system will have the added benefit of allowing players to easily track their playtime and spending and set annual loss limits. In addition, the verification system will boost the efficiency of Veikkaus’ exclusion scheme.

Ville Venojärvi, Veikkaus’ head of lottery games, also commented on the matter, praising the change. He pointed out that coupon game players should be already familiar with how this works. Venojärvi added that players who have purchased lottery tickets this Christmas would still be able to redeem them without identification.

In other news, the Veikkaus is preparing for the reforms in Finnish gambling that would put an end to its monopoly. Although the state-owned company is not firmly opposed to the changes, it warned that the drastic shift will likely force it to undergo major internal restructuring. As a result, hundreds of Veikkaus employees might lose their jobs, the operator warned.

The Veikkaus expects a quarter of its workforce to be affected in one way or another.

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Finland might be on the way to introducing a licensing model for online gaming. The country, which is the only EU member to still maintain a monopoly over iGaming, just broke ground by introducing a legislative plan to transition to a licensing system.

Finland’s online gaming monopoly, Veikkaus, commented on the matter, expressing its support for the move. According to CEO Velipekka Nummikoski, the company believes that regulation can benefit the whole Finish gaming market.

Nummikoski praised the Ministry of the Interior for what he called the most significant reforms in Finnish gaming yet. He hailed the government’s clear plan of action and said that he hopes that it would be able to channel players toward the legal market.

Under the new legislative plan, Finland will abolish Veikkaus’ exclusivity when it comes to online gambling. Still, the company will retain its monopoly over retail slots and the lottery.

Despite its apparent support of the measure, Veikkaus warned that the transition to a licensing model will likely lead to redundancies, forcing the company to restructure its business, close properties and lay off workers. According to the company’s estimates, as many as 240 employees may lose their jobs.

A New Age for Finnish iGaming

If Finland introduces a regulated gambling model, Veikkaus will split into two companies within the same group. One of the newly-formed entities will be Veikkaus’ arm which will retain its monopoly over retail slot machines and the lottery, while the other joins the competitive online market.

The Finnish government’s plans to introduce a licensing model come amid strong support for the introduction of regulated gambling. However, the transition process is set to take a few years at the very least. Under the current plans, the Ministry of the Interior will take two years to draft a legislative proposal for regulated iGaming.

The proposal will cover important matters, such as what games should be legalized, what the licensing and tax fees for online operators should be and how Finland would protect consumers from harm.

Finland’s decision to explore the possibility of introducing licensed online gaming marks a historic turning point for the country and will align it with other EU member states that use similar models.

The move was praised by the European Betting and Gaming Association, which highlighted that a licensing model will bring many benefits to Finland, including improved channelization rates and better player protections.

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Pragmatic Play has been tapped by the Finnish monopoly to provide it with new games that will bolster the experiences for players. Officially run as Veikkaus Oy, this is the country’s state-owned casino, betting, and lottery gaming operator.

Pragmatic Play Brings a Variety of Worthwhile Games

The games that will be featured with Veikkaus Oy include 10 of the supplier’s most prominent titles, such as Sugar Rush, Gates of Olympus, Big Bass Bonanza, and The Dog House Megaways, among others. Pragmatic Play has been building up its European and Nordic footprint with confidence and the arrival of its products with one of the most significant industry players in the region further reflects positively on this commitment.

Veikkaus has been actively looking to build its iGaming footprint with a series of content partnerships designed to help the company bring more worthwhile entertainment to the local ecosystem. The company is also putting a strong emphasis on responsible gambling, which is something that Pragmatic Play shares as a core value.

Commenting on the tie-up, Pragmatic Play COO Irina Cornides welcomed the chance to be collaborating with the company and introduce the Pragmatic Play iconic slots to Finnish players for the very first time.

“Not only does the deal signal our continued growth in regulated markets across Europe, but it also highlights our shared commitment to player protection and corporate social responsibility,” Cornides said.

She added that Veikkaus is a trusted partner that is fully committed to making gambling safer and more entertaining for its players, as well as contributing to good causes. That is why Cornides is confident that Pragmatic Play and Veikkaus will both work to make this alliance a success in the long run.

Veikkaus Keen to Make This a Long-Term Success

Veikkaus chief product officer Jan Hagelberg was similarly encouraged by this new opportunity and hailed the chance to see Finnish players get access to some of the industry’s leading iGaming titles. Hagelberg reaffirmed that Veikkaus Oy’s mission was to provide player bases with some of the most excellent titles there are.

Games such as Sugar Rush and Big Bass Bonanza would be among the ones featured moving forward, offering players access to some worthwhile and incredible choices across the board. Earlier this year, Finland spoke about replacing the Veikkaus monopoly and introducing a more liberal system in which private companies and operators can compete, a process that already took place in neighboring Sweden a few years ago.

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Veikkaus, the state-owned gaming company, has welcomed the Finnish Ministry of the Interior’s recent study on the gambling monopoly system which advises against maintaining the current status quo.

In January, the ministry commissioned the study to examine the effectiveness of the Finland gambling market in channelling consumers towards Veikkaus and to recommend alternative models for the gambling system. 

The study indicated that the monopoly system weakens the “channelling abilities” and had pushed players towards seeking gambling services outside the regulated market. 

According to the report, “Approximately half of all gambling online goes to games outside the system. Playing outside the system also causes significant gambling disadvantages, the effective prevention of which is challenging when operating within the framework of the current system.”

In addition, as a result of the gaming activities outside of the state monopoly, the country’s gaming industry has an annual revenue shortfall of approximately EUR 500-550 million.

The report suggested two ways to reform Finland’s gaming market: reducing access to unlicensed gaming and introducing a licensing model. The report said that implementing a licence system could potentially result in a greater level of channelling in online gambling compared to the current state.

Welcoming the report, Veikkaus CEO Olli Sarekosk said, “The report is good and balanced. It is important that the amount of gaming margin outside the exclusive rights system is confirmed to be in the range of 500-550 million.

“If the system change is headed towards a licence system, from Veikkaus’ point of view, it is desirable that this change happens faster rather than slowly.”

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Veikkaus Oy’s 2022 profits remained roughly in line with last year. Fennica Gaming, the group’s first subsidiary, showed promising results and should soon significantly contribute to the group’s market presence. Despite optimistic remarks from board members, rising political pressures may soon disrupt Veikkaus’ undisputed reign over the Swedish market.

Financials Remained Stable across the Board

The group’s overall performance for the 12-month period ending 31 December is roughly in line with 2021. Revenues reached €1,07 billion ($1,14 billion), a 3% drop compared to last year. Operating income and financial profit also saw little change, remaining respectively at €680.3 million (7$24.97 million) and €680.0 million ($724.67 million). 

Brick-and-mortar venues accounted for 49.7% of gross gaming revenue, while the agency’s iGaming offerings edged ahead, contributing 50.3%. Lotteries continue to be the cornerstone of Veikkaus’ business model, netting €600.0 million ($639.52 million) in revenue. Land-based casinos generated a respectable € 346.7 million ($369.55 million), but betting revenues dropped by 16.9% year-on-year to €123.8 million ($131.97 million).

Expenses also remained relatively stable despite rising inflation. The monopoly paid significantly lower lottery taxes at €36.3 million ($38.75 million) for a 39.8% drop. However, the 3.3% rise in material and service costs of €132.5 million ($141.51 million) balanced the net sum. As a state-owned entity, Veikkaus’ total net income of €671.0 million ($716.4 million) will go toward government initiatives and projects.

Foreign Operators Continue to Siphon Profits

According to Veikkaus’s most recent press release, the ongoing stagnation primarily resulted from several unfavorable factors. CFO Regina Sippel explained that consumer activity still lagged behind pre-pandemic levels despite the group’s venues operating at capacity. She noted that 2021’s manual limits for slot machines, the war in Ukraine, and a challenging economic climate exerted significant pressure on potential gamblers.

The… increase in consumer uncertainty and reduced purchasing power have… affected demand for Veikkaus games.

Regina Sippel, Veikkaus CFO

Veikkaus’ status as a state-owned entity means it remains fully committed to fostering a responsible gaming environment. In 2023, the company plans to introduce compulsory authentication for ticket-based games, covering most of the company’s offerings. However, foreign operators continue to undermine the monopoly’s online market share. They function outside the country’s player protection regulations, putting an increasing number of players at harm.

While revenues remained stable, Veikkaus is facing trouble on the political front. Politicians are becoming increasingly weary of foreign operators siphoning profits overseas while causing harm within the country’s borders. Three leading parties have expressed a desire to end Veikkaus’s monopoly and introduce a licensing system similar to Sweden’s. With plans to transition by 2025, the agency’s competition-free days may soon meet their end.

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