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Finland's Gambling Monopoly: Will Veikkaus Remain?

Author: Ivanna Shostak
22 November 2019, 15:41
Votes: 1

Finland is among the few European countries where the gambling monopoly has been preserved. In our article, you will find information regarding the rationality of this approach, the problems and prospects for the development of the Finnish gaming field.

Finland's Gambling Monopoly: Will Veikkaus Remain?

In Finland, gambling has a legal status. There are some features that distinguish the country’s market from other European states. The main feature is the existence of a monopoly. Such a practice took place in many countries, but, after some time, the authorities recognized its inefficiency. Read more about the reasons for the introduction and abolition of gambling monopolies and the current situation in the Finnish market in the following material.

General characteristics of the Finnish market

The country’s land-based gambling business is represented by 16 casinos, the largest number of which are located in Helsinki, the capital of the state. This practice is not unique to European countries and it can be explained by some economic reasons. Capitals are always an object of increased interest for tourists so they attract a lot of gambling operators’ attention. In addition, the country has seven poker rooms and there is a monopoly bookmaker. It should be mentioned that Finns are considered one of the most gambling nations in the world, and one of the most developed industries here is online gambling.

An interesting fact: Finns have been fond of gambling since the seventeenth century. In spite of the fact that for some time gambling operations were prohibited, from the moment independence was gained, gambling activities became legal in the state.

Read more: Gambling Legislation in European Countries

Gaming monopoly: Veikkaus era

Gambling and its regulations are under the strict control of the state. However, Veikkaus has not always been the only player on the market. Previously, all gambling operations were managed by three organizations. Table games and slots (common activities in land-based casinos) were controlled by RAY, lottery and betting operations - by Veikkaus Oy, and horse racing - by Fintoto.

Gaming monopoly: Veikkaus era

However, several years ago, it was decided to create a single center with a monopoly on the offering of the full range of gambling services. This is how the Veikkaus era began in the Finnish market. Why did the authorities make this decision?

Thanks to the monopoly law of the state, all funds generated by the industry remain in the country and are redistributed into several important social areas. However, the position of the European Union is that financing alone of any public needs is not a sufficient condition for maintaining monopoly rights. It makes sense in this position at least because the gambling industry transfers funds for the development of culture, sports and other social projects in the case of a market in which many companies are represented. Another argument in favor of the exclusive operator is that its existence minimizes the risk of problem gambling. In this case, Veikkaus simply could not cope with the task that had been set. Although the hypothesis has not proved successful in other countries.

Read more: Top 6 Countries Where Land-Based Casino Activity is Officially Allowed

Problems

Firstly, the EU is not quite satisfied with the fact that the gambling monopoly exists in Finland, as well as with the quality of legislation regulating the field. In recent years, the EU has repeatedly called for a review of the regulations of the Finnish gambling market.

Secondly, the presence of a monopoly does not correspond to the rules of healthy competition (the very engine of progress that is often referred to under capitalism), and gambling is an example of a market. Looking ahead, the Swedish Svenska Spel had a similar right earlier. Recently, the chief of the operator Patrick Hofbauer shared his opinion on working in a restarted market. He stressed that the company was amazed at the complexity of working in a competitive environment and noted that their profits reduced.

Problems

Thirdly, as long as there is only one operator in the state’s market, it is impossible to realize the full potential of the market. By today's standards, the country’s market is huge: Finns spend up to €10 billion on gambling every year.

Besides, advisory bodies are calling for streamlining the work of the state bodies responsible for controlling Veikkaus. This is because, at the moment, the industry is controlled by parliament, the government and several departments - the ministries of finance, internal affairs, as well as culture and education. At the same time, the problems of gambling addiction are studied by the Ministry of Social Affairs and Health. According to experts, all these aspects have an extremely negative effect: the bottom line is that the competencies of departments overlap, and there is no one responsible for the result.

Read more: Online Gambling Licenses in the European Union

Public attitude

In this situation, the opinion of the public also plays an important role. According to the conducted polls, most Finns favor the abolition of monopoly rights. Based on its results, it is possible to make a conclusion regarding several trends spread in the state. The first one is that senior citizens support more the existence of a monopoly. The second one is that only half of the country's inhabitants are ready to adopt a categorical position regarding the future of Veikkaus. The third one is that men take a more categorical position in relation to the elimination of a single operator.

Public attitude

Prospects for the development of the gambling market in Finland

A little less than a year ago, the competitive market replaced the Svenska Spel monopoly in Sweden. Despite the fact that operators are largely dissatisfied with fuzzy legislative regulations, which often brings companies to court, the number of licensed operators breaks records. This variety primarily ensures maximum satisfaction of various users’ preferences. On the other hand, the larger the market is, the more funds the state treasury receives as tax revenues.

As mentioned earlier, 127 Latvian citizens addicted to gambling have accessed required psychological support.

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