Q&A with Joonas Karhu from Bojoko

What is the current state of play in Finland when it comes to online casino/sports betting regulations?

The online licensed operator in Finland is Veikkaus and it has a monopoly on all land-based, online casino and sports betting. That being said, players in Finland are allowed to gamble wherever they like however operators are not allowed to advertise their brands within the borders of Finland. This is why you see a large number of affiliates running Finnish-language versions of their sites as there is no law preventing them from pushing players from Finland to their operator partners, so long as they are not considered to be advertising within the country’s borders.

Do you believe the market will ultimately move away from being a monopoly? If so, why?

Ultimately, Finland will open up its market through a regulatory framework and licensing model similar to what is in place in Sweden. And it really is only a matter of time before this happens. Last year, Finnish journalist Senja Larsen wrote a book called Veikkauskratia that brought to light some of the horrors of the country’s gambling monopoly. The discussion about the open model versus the closed monopoly has been brewing for years but the book has caused things to explode.

The proceeds Veikkaus generates are now being directed to the government budget but before they were distributed directly by the operator. This has led to instances of corruption. Now that the proceeds are being controlled by the government, it makes instances of corruption much less likely and not only that, but the government will be able to clearly see the greater benefits that regulating and licensing land-based and online gambling will bring to the country.

How long do you think it will take before the market is regulated/licensed and more operators are allowed to enter?

A parliamentary election is set for 2023 and I believe that this will be one of the key topics discussed throughout the election process. Given the tremendous benefits that licensing and regulation would bring, and that other European countries continue to embrace open gambling markets, it could easily be the case that Finland has a licensed market as early as 2024.

What opportunities does the Finnish market present now for operators and affiliates?

A 2017 article in the Economist put Finland as the fourth biggest market in the world based on gambling losses per adult so the potential for operators and indeed affiliates is clear. Of course, due to the current monopoly approach operators and affiliates need to tread carefully to ensure they do not fall foul of the country’s gambling laws. At present, it is about considering whether the balance between risk and reward can be struck, and despite the clear opportunities the market offers, for many it is better to wait for the country to embrace regulation and licensing.

How will those opportunities change in the event the market moves away from the monopoly model?

The cost of operating in the market increase as operators will have to ensure they are compliant with the regulations in place. They will also have to market to players, and in the early days those that can spend big and be more aggressive are best placed to gain the all-important first-mover advantage. Another challenge will be securing talent – companies will undoubtedly open offices in Finland and seek to onboard those with experience in the market. This can lead to a situation where supply outstrips demand. Of course, a regulated, licensed market gives businesses the confidence they need to invest into the industry which in turn helps it to grow.

Do monopolies ultimately harm the consumer experience? If so, how/why?

Many years ago, a number of Finnish political leaders and perhaps the gambling monopoly Veikkaus came up with a story that with a monopoly they can protect the consumer better. With this story, Finland got a wild pass from the EU to maintain this approach to its gambling industry. Of course, several years on we now know, based on data both from Finland and Norway, that actually a monopoly creates more gambling problems when compared to regulated markets.

When it comes to consumer experience, every year we see that consumers play less at Veikkaus than the previous year and more abroad and at offshore sites. This is no surprise as the world has been globalising for years and consumers want choice. I mean if you just look at the list of online casinos regulated by the UKGC we have at Bojoko here, you can see that there are 200 of them.

What are the main benefits that licensing and regulation could bring to Finland?

Better player protection. No one company can be more responsible than the sum of many with independent and objective regulations and regulators. It also creates more value for players due to the competitiveness of a free market. In addition, it leads to better channelisation which in turn generates increased tax revenues for the Finnish government instead of money flowing abroad. Opening up the market also creates opportunities for businesses as gambling companies need often work with third-parties while also providing solid ground for start-ups looking to bring something new and exciting to the market.