Christer Fahlstedt, CEO of Paf has his say on Finnish regulation
The problems in the Finnish gaming industry could be solved with a regulated license system
There is a lively debate about gambling in Finland. Many emphasize the fight against gambling problems while some are worried about the future of Veikkaus and its beneficiaries.
The THL report (April 21, 2020) shows that risk-based gambling was at its lowest level last year since 2007. The mandatory identification, which will be introduced next year, will even further reduce problem gambling. However, mandatory identification is also estimated to reduce Veikkaus’ revenues by EUR 150 million per year. This is directly reflected in the activities of the beneficiaries, such as important social, sports and youth organizations.
In the budget debate, the government said that its solution to the situation is to block all operators other than Veikkaus’ gaming sites. However, blocking access to gaming sites or payments is the wrong tool to use. Restrictions must be based on combating the disadvantages of gambling, but problem gamblers are quick to find ways on the Internet to get past the limits set by the authorities. Those who drive payment blocking themselves know that it doesn’t work. As a tool, it is a heavy tool that is ineffective. In addition, it would mean an exceptional intrusion on the freedom of citizens and it would force banks to act as secret police guarding their customers’ transactions.
All EU countries have a gambling license system
With the exception of Finland, all EU countries have a gambling license system in place. The experiences in Sweden and Denmark, for example, are excellent. The state revenues from gaming companies have increased with the licensing system when gambling on foreign sites can be taxed.
Finland could build a regulated licensing system that serves Finnish society and enables gamblers to exclude games and gambling ads. When they set up the regulated license system, it would be important to utilize the expertise of Peluuri and other organizations familiar with the prevention of gambling problems. It would also be possible to include a loss limit for all gaming operators within the licensing system.
The regulated licensing system could also restrict advertising in media as well as outdoors and at different events, in particular, to protect minors. This would be a significant improvement for gambling addicts compared to the current situation, where it is impossible to avoid gaming advertising in everyday life.
With a licensing system for online gaming, Veikkaus would finally have an equal competitive position in online gaming as other foreign competitors, who would be subject to the strict regulation in Finland. In Denmark and Sweden, for example, the companies comparable to Veikkaus have also maintained a very strong market position in the licensing system. In Sweden, Svenska Spel even increased its online market share from 46% to 56% after the system change. Veikkaus’ monopoly on slot machines and lotteries would be maintained, and the company would have the opportunity to become a significant player in online gaming.
So, we have a well known European alternative, a regulated licensing system that would achieve the result that the government wants. Political decision-makers now need the courage to look at the Finnish gaming system on the basis of facts.
CEO of Paf