Is Finland’s Gambling Regulation Path Aligned with Sweden’s Approach? A Legal Perspective
As Finland prepares to transition away from its traditional gambling monopoly by January 2027, many eyes are on Sweden’s regulatory framework as a potential blueprint. However, local legal expert Antti Koivula cautions that Sweden’s struggles with rising illegal gambling activities may indicate that it’s not the best model for Finland’s evolving market.
Koivula points out that while both countries share historical similarities in their gambling monopolies and consumer protection strategies, Sweden’s current challenges, particularly its low channelisation rates, raise questions about using its framework as a guide.
In 2019, Sweden made significant changes to its gambling laws, moving towards liberalization and establishing a taxation and licensing framework for online gambling. Finland has mirrored some of these aspects in its new regulations, allowing its state monopoly to operate alongside private gambling entities. However, Koivula warns that by adopting Sweden’s model, Finland may overlook the pressing issue of black market gambling, which he believes has not been adequately addressed in the proposed reforms.
“No Regulatory Framework is Without Flaws”
Koivula emphasizes that no regulatory system is flawless, citing Sweden’s ongoing difficulties in regulating its gambling market. "Sweden is currently grappling with substantial enforcement issues against illegal gambling operations, which Finland seems to have insufficiently considered," he told iGB. He suggests that looking at Denmark, which has successfully managed its online gambling sector since 2012, might offer Finland more beneficial insights. Denmark has achieved an impressive channelisation rate of 90%, showcasing the effectiveness of a player-centric regulatory approach.
Morten Ronde, CEO of the Danish online gambling association Spillebranchen, previously highlighted that Denmark’s regulation adapts to player behavior rather than imposing restrictions based on predictions. In light of the COVID-19 pandemic, while Sweden mandated limits on online gambling, Denmark instead monitored player data, finding no drastic increases in gambling, which allowed them to avoid unnecessary regulations.
Shortcomings in Sweden’s Framework
Although Sweden is taking steps to alleviate the growth of its black market—which include proposals to amend its Gambling Act—substantial gaps remain. The current regulations do not penalize foreign operators that exploit loopholes by marketing in English and transacting in euros, undermining local operators. Additionally, the call for privatizing the state-run lottery, Svenska Spel, reflects ongoing concerns about potential conflicts of interest and market fairness, a sentiment that resonates in Finland’s preparations as well.
In Sweden, the channelisation rate across the gambling market has struggled to meet the intended target, indicating a substantial amount of gambling activity may be taking place outside of regulated channels, which poses risks to both consumers and public revenues.
The Path Forward for Finland
As stakeholders in Finland, including Koivula, emphasize the need for the government’s gambling monopoly, Veikkaus, to adapt effectively within a competitive landscape, the declining sales figures underline the urgency for reform. With Veikkaus reporting a 7.3% drop in revenue for 2024, opening the market to competition is seen as essential for revitalizing its position.
In anticipation of these regulatory changes, collaborations between entities like Sweden’s AB Trav och Galopp and Finnish associations, such as Suomen Hippos, highlight a proactive approach to capitalizing on the new landscape.
While Finland’s initial regulations included prohibitive marketing practices, backlash from industry stakeholders led to modifications in the legislative proposals submitted to the EU. This evolution suggests a responsiveness to market realities that could help shape a more resilient and equitable gambling environment.
In summary, while Sweden’s model offers some valuable insights, Koivula advocates that Finland could gain significantly from examining other jurisdictions like Denmark. By addressing these concerns and adapting its regulatory framework to the local context, Finland can better position itself to compete while ensuring consumer protections and curbing illegal activities.