Finland Gambling Regulation

Finland is a Nordic country with a population of 5.5 million people and a gross domestic product that is forecast to grow to $242 million by the end of 2020. The country offers a high standard of living and boasts a well-developed economy whose main growth drivers are the service, manufacturing, and refining industries.

These conditions seemingly pave the way for a flourishing gambling industry on Finnish soil. In reality, landbased gaming opportunities are scarce here since Finland has only 16 brick-and-mortar casinos. Nonetheless, gambling enjoys huge popularity as many locals prefer to place bets online.

The biggest betting site in the country, Veikkaus Oy, is operated by the government which holds a monopoly over the entire gambling industry in Finland. Finns are estimated to spend around €2 billion on casino gaming each year although it is difficult to arrive at accurate figures because many locals resort to playing on offshore websites.

The state monopoly prevents foreign operators from applying and receiving local licenses. The legal virtual options are restricted to Veikkaus Oy, which offers online casino games, slots, lotteries, sports betting, and poker. An exception is made for the autonomous Åland Islands where gambling is regulated on a local level.

Similarly to mainland Finland where Veikkaus dominates the landbased and digital gambling sectors, Penningautomatförening (Paf) holds the sole rights for the provision of gambling services in the Åland Islands.

Laws That Govern Landbased Gambling in Finland

The history of gambling in Finland can be traced back to the 17th century. It was prohibited in 1899 but was eventually decriminalized again in 1917 and has been legal ever since. Gambling activities are governed under the provisions of the Finnish Lotteries Act 1047/2001 , which has been amended on several occasions.

This piece of legislation describes lotteries in Section 2 as “[activities] in which participants may win a prize of monetary value based in full or in part on chance in which there is a charge for participation.” This law is also applicable to operating and designing casino table games (like roulette, craps, and blackjack), slots, tote betting, bingo, pool betting, and machines with non-monetary prizes.

Section 5 of the Finnish Lotteries Act says that lotteries and other gambling services can be run solely for non-profit purposes by organizations that have registered offices in the country. A permit must be issued by a licensing body for this purpose. Section 11 further elaborates on this subject, stating that the state-owned Veikkaus Oy has been granted the exclusive rights to distribute gambling products and services on the territory of Finland.

Government Decrees That Complement Finland’s Lottery Act

Åland Islands Gambling Legislation

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Government Decrees That Complement Finland’s Lottery Act

The Lottery Act of Finland is complemented by several additional decrees, issued by the local government. The first of these is the so-called Government Decree on Lotteries (Valtioneuvoston asetus arpajaisista), which elaborates on the licensing process and requirements for the different types of permitted gambling products.

Another complementary piece of legislation is the Government Decree on the Implementation of Veikkaus Oy Games (Valtioneuvoston asetus Veikkaus Oy: rahapelien toimeenpanosta). The decree contains important information about the payout percentage rates of various Veikkaus Oy gambling products, the maximum allowed bets for each authorized game type, and the operating hours of casinos.

According to Section 2, Finnish slot and casino players must be paid back between 70% and 99.9% of the games’ total turnover. Section 9 states that no more than 18,600 slot and special slot machines should be made available to the public by Veikkaus Oy.

As for arcades, the company is restricted to a maximum of 120 special arcades. Additionally, Veikkaus Oy can operate one landbased gambling venue in Helsinki and another one in the Tampere area from 12:00 at noon until 4:00 in the morning each day of the week. All relevant products distributed by Veikkaus should contain information about prices, amounts and value of their profits, and when they are collected.

Finally, there is the Government Decree on the Gambling Advisory Board (Valtioneuvoston asetus rahapeliasioiden neuvottelukunnasta 658/2017). The decree provides information about the responsibilities and functions of the gambling regulators of Finland. Also included here is information about the structure of the regulatory entity and its members.

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Åland Islands Gambling Legislation

As we wrote at the beginning of this article, the Åland Islands are an autonomous region of the country and as such, they have a separate legislative framework for gambling. Betting activities offered in the autonomous area are governed under the provisions of the Åland’s Provincial Lottery Law (Ahvenanmaan arpajaislaki).

The legislation offers insights into the legal definitions of lotteries and betting games. The latter category includes chance-based activities such as sports betting and horse racing. The Lottery Law also covers casino games, slot machines, conventional lotteries, and toto games.

Similarly to mainland Finland, the gambling sector in the autonomous region is also monopolized. The Åland Islands have been outside Veikkaus’ jurisdiction since the beginning of 2017. Veikkaus ceased the provision of gambling content in this region after the introduction of amendments to the Åland Lottery Act and the establishment of the new regulatory entity, the Lottery Inspectorate of Åland. This applies to both retail and online games via the official Veikkaus domain.

The only entity that has permission to operate such activities at the moment is Paf, which is owned and managed by the islands’ regional government. Each year, Paf collects approximately €20 million for the funding of various public initiatives for health, region sustainability, education, sport, and culture.

The company also offers gambling games on cruise ships that sail throughout the North and Baltic Sea regions. Paf services consumers from other Baltic and Nordic countries like Latvia, Estonia, and Sweden.

Online Gambling in Finland

Due to the government monopoly in the country, foreign operators cannot apply for local permits that would allow them to legally service Finnish residents. The only operators that provide virtual casino games and betting in the country are Veikkaus in mainland Finland and Paf in the Åland Islands region.

Since Finland is a member state of the European Union, it has been pressured to open its gaming market to foreign competition on several occasions. Finnish authorities have shown no signs of succumbing to the pressure so far. Since the country borders Sweden to the west, it has been keeping a close watch on the recent changes and developments in the Swedish virtual gambling industry.

Paf itself urged the Finnish government to put an end to the monopoly as this would enable the country to address gambling-related harm more adequately. However, Finland’s lawmakers are still reluctant to end the state monopoly. Some of them believe opening the local market will harm the governmental organizations that rely on the gambling funds provided by the state-operated companies.

That being said, Finnish players are not entirely devoid of options. In the absence of locally regulated operators, an increasing number of Finns are beginning to take their action to offshore online casinos , licensed in other European jurisdictions like Gibraltar and Malta.

Such websites operate in full compliance with their local regulatory policies. They normally give Finns the chance to create accounts with EUR as the base currency and their websites can be loaded in the Finnish language.

While such practices violate the country’s state monopoly, the Finnish government does not legally prosecute locals for participating in offshore gambling activities. No monetary penalties are imposed on Finnish players, either. In the words of Katriina Laitinen, who chairs the Department of Legislative Affairs at Finland’s Ministry of the Interior, local gamblers who patronize foreign gaming sites are “not committing any crime” in doing so.

This is not the case where offshore operators themselves are concerned. They are strictly prohibited from advertising their products and services to Finns. One magazine editor was even fined by the Lappeenranta District Court back in 2010 for publishing ads of offshore gaming companies like Ladbrokes.

Finland’s Gambling Regulators

The gambling industry in mainland Finland is regulated by the Lottery Administration Department of the National Police Board (Arpajaishallinto). The regulatory entity commenced operating in its present form at the beginning of 2017. Among its main responsibilities are supervising fundraising activities, reducing the negative effects gambling can have on Finnish society, and preventing money laundering.

The Lottery Administration of the National Police Board also has the mandate to oversee and control gambling-related marketing activities. Violators of the advertising restrictions are usually penalized with fines but in the most severe cases, they can end up behind bars for up to two years.

Since Åland is an autonomous area, gambling activities in the islands are controlled by the regional government. The gambling regime in this territory is rather similar to that in the mainland part in that it is monopolized, with a sole government-controlled operator (Paf, est. 1966) covering the entire Åland market.

Paf, whose name is an abbreviation from “Play among Friends”, launched its online gambling operations in 1999 after receiving an exclusive permit from the provincial government of the Åland Islands.

The profits generated by the operator are distributed across various non-profit organizations by an independent allocation board. Since its establishment in 1966, Paf has donated over €300 million for different charitable and socially beneficial causes.

Responsible Gambling Policies in Finland

Responsible Gambling in the Åland Islands

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Responsible Gambling Policies in Finland

Gambling is a widespread form of recreation in Finland so it makes sense the local authorities do their best to minimize the harms that can potentially result from it. The Finns’ love for betting is further substantiated by the results of a 2019 population survey, conducted by the Finnish Institute for Health and Welfare (THL), which showed that over 78% of the locals had gambled over the last year.

The state-owned Veikkaus Oy must run its operations in full compliance with the responsible gambling requirements of the local authorities. The operator can service only players who are at least 18 years old and are permanently domiciled in the country. Each customer must hold a Finnish bank account and possess a local social security number.

Before someone is granted access to any online gambling products, their identity and address should be verified. This verification prevents underage gambling on one hand, and ensures Veikkaus honors the territorial scope of other countries’ gambling legislation on the other hand.

Finland’s gambling system shares some similarities with the UK regime, in the sense that both countries forbid free games before the customers have registered and verified their accounts. Various measures are in place to promote responsible gaming. Veikkaus must display notifications to warn customers about the adverse impact of gambling.

Self-exclusion, restrictions on maximum bets, and daily and monthly loss limits are also implemented. Veikkaus’ online gambling services are limited to certain hours only. The monopoly operator must advertise its products in a socially responsible fashion.

This largely means gambling-related services should not be marketed to underage individuals. Chance games like slots should not be advertised outside casino floors and gaming rooms. Veikkaus must display clear information about the terms of participation and its games’ probabilities of winning.

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Responsible Gambling in the Åland Islands

The proclivity for responsible gambling extends to Paf as well. The Åland monopoly operator is famed for its responsible betting policies, so much so that it won a prize for the most socially responsible gambling brand at the 2014 EGR Awards.

In 2018, Paf became the first-ever gambling operator to voluntarily enforce loss limits for its players. The losses of Paf customers cannot exceed €25,000 per year. As of the beginning of 2021, this limit will drop by another €5,000 to €20,000. Players afflicted with problem gambling can take advantage of the Paf supportive insurance.

This is an option for customers who have maintained Paf accounts for at least a year and have spent a minimum of €120 within this period. Those who feel they can no longer control their gaming have access to counseling services at a value of up to €2,300 with a licensed specialist.

Finally, there is a responsible withdrawal tool available to Paf customers. Similar to manual flushing, this feature prevents undisciplined players from canceling their withdrawal requests and spending whatever they have won back at the online casino.

How Gambling Operations Are Taxed in Finland

The monopoly operator Veikkaus Oy is taxed based on its gross gaming revenue, which is the difference between the total amount Finnish players have wagered and the amount paid to them in the form of winnings. The provisions of the Finnish Lottery Act stipulate that Veikkaus must contribute 12% of its GGR each month.

The proceeds go toward socially beneficial initiatives and charities. Most of the funds are used to promote sports, health, science, and the horse racing sector. As for Veikkaus’ Åland counterpart, Paf, it offers gambling products across different categories with a single permit and is charged €70,000 for each renewal.

Finnish law does not require local players to pay taxes on their gambling-related profits. With that in mind, gambling debts are enforceable in Finland but on condition the player incurs them through participation in activities offered by the government-owned Veikkaus.

What’s in Store for Finland’s Gambling Industry?

The state monopoly on the gaming sector has met significant criticism over the years. Despite this, the local authorities show no signs of lifting the monopoly. Only the future can tell whether the gambling industry in the Nordic country will remain stuck in a rut or not. Other than that several regulatory amendments loom over the Finnish gambling sector but none of them has to do with opening the market to foreign competition.

One change concerns slot players in landbased venues who will have to undergo obligatory identity verification from 2023. Finns might end up with fewer offshore gambling options since the local government has also unveiled intentions to start blocking the access and payments to foreign betting sites as of 2021.