Calls for Regulation in Finland

The Competition and Consumer Authority (KKV) in Finland has spoken out in favor of the introduction of a central regulatory body for gambling. The KKV has suggested this in order to improve the current supervision of the gambling sector carried out by the country’s monopoly operator Veikkaus.

KKV concluded that the current regulatory framework in the country was not fit for purpose. This, it said, is due to the nature of the regulation in Finland, which is carried out by many different bodies which are all responsible for different elements, many of which overlap with one another. This overlap, KKV argues, leaves it unclear which bodies are ultimately responsible for which element.

The authority stated that under European Union legislation, a monopoly is only justified when it can prevent potential negative effects of gambling effectively. A company having a role in funding social causes does not give sufficient grounds for maintaining the monopoly status of a company, KKV added.

The agency also suggested that better regulation could help to address the issue of problem gambling in the market.

“The prevalence of problem gambling is due more to how gambling is regulated than how it is organized,” KKV head of research Anu Raijas said. “Current gambling regulations must first be centered around one body and made more effective.”

Regulation currently split in several departments

Regulation of Veikkaus is currently split between the government, parliament and a number of departments such as the Ministries of Finance, the Interior and Education and Culture. Groups such as the National Police Board are in charge of monitoring and enforcement, whereas the Gambling Advisory Board gives recommendations to the government for changes in policy, and also monitors the effectiveness of such changes. The potentially problematic effects of gambling are dealt with by the Ministry of Society and Health and is supported by an advisory board. Veikkaus itself is overseen by an Ethics council and a supervisory board.

This raises issues in the opinion of KKV. The authority believes that not only does this mean that regulation is split between many disparate groups, but also that the direct beneficiaries of the money taken by Veikkaus have a say in policy. KKV believes that this may encourage such people to act in a way to maximize their profits, rather than in a way that would more effectively tackle problem gambling.

A roulette table with chips on it and a hand placing chips.

The monopoly of Finnish operator Veikkaus is under threat after recent calls for centralized regulation from the Competition and Consumer Authority (KKV). ©

The establishment of a single regulatory body to replace the numerous governmental groups which regulate the gambling sector currently, would leave Finland in a better position to enforce controls and deal with offshore activity, KKV suggested. The landscape of regulation in Denmark and Sweden was used as a case study to emphasize this point. In these countries, a centralized regulator has played a role in pushing out unlicensed operators.

The authority also added that a central regulator would be better suited to tackle the negative effects of gambling. The agency noted that Finns are among the highest spenders on gambling each year, with each person averaging a €320 spend annually. A regulator, KKV argues, would be able to give consumers information in a clear and concise way to educate on the potentially harmful effects of gambling.

A central regulatory body would also be able to take action and could limit supplies of certain products. Veikkaus claims that this is something the company is already doing.

At present, there has been an ongoing investigation by KKV into alternatives to the current system for organizing and regulating gambling in Finland. This recently published recommendation has come as a result of this investigation.

This report is the first of a series that will be published to explore the alternatives to the current gambling regulatory framework in Finland. This series of reports will culminate with the eventual recommendation as to whether Veikkaus should keep its monopoly status in Finland. The reports to follow up this initial one will be released in the coming months, and the eventual conclusion to determine the future of Veikkaus’ monopoly status will be published early next year.

Calls to scrap the current monopoly of Veikkaus in Finland and to replace this with a centralized licensing system that would allow foreign operators to come into the country have been growing in recent months. Veikkaus has, as a result, been forced to recently defend its monopoly status, arguing that it allocates 72% of profits to social causes in the country. The operator has however, been described by some, as an “inverse Robin Hood”, as they argue it is taking money from the very poorest in Finland and is using this to line the pockets of its executives. Veikkaus has also recently needed to dispute claims that its turnover is in fact much higher than it disclosed in financial reports.

Such criticisms of Veikkaus are turning public distrust for the organization to anger. Police in Finland have revealed that an unspecified threat was made against the business over the weekend. The details of this threat have not been made public as yet, but it was severe enough for authorities to visit the chief executive of the company, Olli Sarekosi.

“Veikkaus does not accept any threats against the company or our personnel, but we ask the police to investigate each threat” security director Elias Olando said.

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