Was Sweden the best market model for Finland to follow?
Has Finland effectively chosen its path by emulating Sweden’s gambling regulation framework? Local legal expert Antti Koivula raises concerns that the burgeoning black market in the gambling sector remains inadequately addressed.
As Finland prepares to transition from its traditional gambling monopoly model—set to be implemented in January 2027—it has looked to Sweden’s gambling laws as a foundational guide. However, Koivula cautions that Sweden’s ongoing challenges concerning its channelisation rate and the rise of illegal gambling websites may render it a less-than-ideal prototype for Finland to replicate.
In an interview with iGB, Koivula explains that Sweden serves as a natural reference point for Finland. Both nations harbor a history of gambling monopolies, analogous welfare models, and shared values regarding player protection.
Notably, Sweden reformed its gambling landscape in 2019, liberalising its online gambling sector and establishing comprehensive licensing and taxation procedures. Finland has mirrored this framework with its own impending regulatory changes, allowing the state monopoly to compete alongside private operators within the online betting and gaming spheres.
Nevertheless, Koivula asserts that adopting Sweden’s model may overlook crucial aspects of black market enforcement. “Sweden faces significant challenges, particularly in curbing illegal operations,” he states, “and Finland has yet to effectively confront this impending threat. The proposed enforcement mechanisms are unlikely to be robust enough.”
Evaluating the Limits of Regulatory Models
“No regulatory framework is flawless,” Koivula emphasizes. “While Sweden serves as a logical reference point, its persistent struggles with the black market and limited stakeholder engagement with the regulator cast doubt on its applicability for Finland.” He suggests that Denmark—along with other jurisdictions like Ontario—might present a superior blueprint for Finland’s forthcoming regulatory framework.
The Danish Success Story: A Closer Look
Since the inauguration of its online gambling market in 2012, Denmark has consistently achieved success, boasting a channelisation rate of 90%, as confirmed by the Danish Gambling Authority (Spillemyndigheden) in April. Morten Ronde, CEO of the Danish online gambling trade organization Spillebranchen, attributes this success to a regulation framework centered on player behavior.
In 2020, contrasting Sweden’s stringent measures, Denmark chose to rely on comprehensive data analysis regarding player trends amidst the pandemic, ultimately avoiding unnecessary regulatory interventions. Ronde recalls, “Danish authorities monitored player behavior closely, discovering that gambling habits had not escalated significantly. This proactive approach set Denmark apart from Sweden, where government predictions drove restrictive policies.”
Challenges with Sweden’s Regulatory Framework
Despite striving to mitigate the adverse effects of the black market, Sweden continues to confront regulatory issues. This past February, the government initiated a review of its Gambling Act, prompted by the trade body BOS highlighting critical loopholes that enable illegal operators to skirt penalties by conducting activities in English and utilizing euros.
BOS has also criticized the state-owned lottery operator Svenska Spel’s monopolistic position, which raises potential conflicts of interest. The push for privatization echoed trends in Finland, where concerns around the government’s ownership of Veikkaus affecting competitive fairness have surfaced.
As for illegal gambling, the Swedish horseracing operator ATG reported a surprising online channelisation rate ranging from 69% to 82% by Q4, falling short of the regulator’s ambitious long-term target of achieving 90%. While these challenges persist, Koivula notes several successful initiatives within the Swedish model, including the implementation of Spelpaus, the national self-exclusion platform, which Finland has taken into account while drafting its gambling legislation.
Finland’s Declining Revenues and Market Liberalization
Several stakeholders, including Koivula, highlight that Finland’s move toward market liberalization is partly driven by the need to enhance Veikkaus’ competitive standing in a changing landscape. Recent financial results reveal a 7.3% year-on-year decline in sales revenue for Veikkaus, totaling €956.2 million for the 2024 fiscal year.
Koivula advocates for the reforms allowing Veikkaus to compete against private operators. “For Veikkaus, establishing a level playing field within the competitive market while maintaining monopoly status in other domains is crucial,” he asserts. “The proposed legislation aligns with these objectives, signaling a progressive step forward for Veikkaus, albeit with room for enhancement.”
In preparation for this regulatory shift, Sweden’s racing monopoly, AB Trav och Galopp, has collaborated with Finland’s equestrian association, Suomen Hippos, to launch a joint initiative targeting the Finnish market.
Finland’s initial regulatory draft faced backlash for restrictive marketing stipulations, including banning affiliate marketing and customer bonuses. Owing to industry feedback, these provisions were removed from the bill submitted to the EU for approval in November.
