FINLAND
Struggling Veikkaus withdraws its support from its own monopoly The enforcement problems, combined with the new and strict responsible gambling features introduced in the Lotteries Act reform of 2022, have made Veikkaus’ position increasingly difficult. Due to the monopoly system, the responsible gambling features only apply to Veikkaus and not to their competitors. Veikkaus has already struggled online for years in the verticals where they have faced serious competition, namely in casino games and fixed-odds sports betting, and their overall market share has been steadily decreasing year after year. Veikkaus’ GGR had fallen from EUR1.8 billion to EUR1.1 billion since 2017, with no improvement in the trend in sight. As a consequence, Veikkaus made a 180-degree turn and publicly withdrew support for its own monopoly. Veikkaus CEO Olli Sarekoski first stated in Veikkaus’ interim report on August 29, 2022, that if the sharply declining trend of Veikkaus’ market share cannot be stopped, Finland will have to consider bringing all gambling under the same regulatory regime. Sarekoski’s words were echoed by Veikkaus VP Velipekka Nummikoski a week later, who underlined that Veikkaus is ready to give up its monopoly and that all gambling should be brought under the same regulatory regime. Since then, Veikkaus representatives have reiterated the same message and expressed their clear support for the shift to a partial licensing system. It is worth noting that in neighboring Sweden and Denmark, the shift from gambling monopolies to licensing systems began when the national monopoly operators Svenska Spel and ATG, and Danske Spil began advocating for the licensing system. In many ways, the situation in Finland is now analogous. It’s all about the numbers The main reason for Veikkaus withdrawing support from its own monopoly is in the numbers. Veikkaus’ gross gaming revenue (“GGR”) had been slowly decreasing since the merger of three Finnish gambling companies in 2017 that formed the “new Veikkaus”. In addition, the COVID-19 pandemic hit the company hard. Veikkaus GGR: • 2017 – EUR1780 million
• 2018 – EUR1759 million • 2019 – EUR1691 million • 2020 – EUR1260 million • 2021 – EUR1100 million • 2022 – EUR1070 million.
The whole Finnish iGaming market also suffered a significant decline during the pandemic (2017 – EUR 1978 million, 2018 – EUR2050 million, 2019 – EUR2000 million, 2020 – EUR1585 million, 2021 – EUR1490 million, 2022 – EUR1540 million). Notably, Veikkaus’ GGR is not expected to reach its pre-pandemic level again due to competitiveness problems, and currently, the company is struggling even to maintain the current level. According to predictions, the Finnish iGaming market is expected to return to the level of EUR1800 million within a few years. However, even if Veikkaus does manage to stabilize its GGR, it would continue to lose market share at an alarming pace. EU law justification for the monopoly is falling apart and the beneficiaries support is gone Veikkaus’ total market share is currently at 70 percent, with an online market share of 53 percent. When it comes to the competitive online verticals, namely casino games and fixed- odds sports betting, Veikkaus’ market share has been estimated to be around 30 percent. Monopolies are an exception to the EU’s basic freedoms, namely the freedom to provide services and the freedom of establishment. Rules that restrict basic EU freedoms must be justified by imperative requirements in the general interest, be suitable for achieving the pursued objectives, and not go beyond what is necessary to attain them. For years, Finland has justified its gambling monopoly primarily by claiming that it is the most effective way to prevent and reduce gambling-related harm and protect the vulnerable. Without getting into the argument as to whether or not Finland has been successful, it should be noted that when the channelization rate drops too low, it is not possible, even in theory, to reach that aim. In general, 50 percent has been considered the “magic line”, and Finland is perilously close to getting there. As there is no possibility for Veikkaus’ to arrest its declining market share, it means that Finland’s EU law justification for the gambling monopoly is deteriorating, and
PAGE 43
IMGL MAGAZINE | APRIL 2023
Made with FlippingBook flipbook maker