Finland's Gambling Reform: Opportunities, Challenges, and the Swedish Model Debate

In a move poised to reshape its gambling landscape, Finland has officially committed to liberalizing its gambling market by January 1, 2027. This decision ends the long-standing monopoly held by the state-owned operator Veikkaus and opens the door for private operators to enter a regulated market.

The reform is one of the most significant shifts in Finnish gambling history and aligns the country more closely with other European nations that have transitioned to multi-license systems.

While the decision is being praised by many stakeholders as a step toward modernization and better consumer protection, the government’s choice to model the reform largely after Sweden’s approach has ignited debate. Critics argue that Sweden’s own struggles with market channelization and illegal operators make it a questionable blueprint.

Why Reform Now?

Finland’s decision follows years of criticism over the effectiveness and ethics of its gambling monopoly. Although Veikkaus has consistently generated revenue for public causes, the monopoly has struggled to address the rise in offshore gambling and related harms. Studies estimate that a significant percentage of Finnish players gamble with unlicensed foreign operators, bypassing Veikkaus entirely.

In response, the government initiated a reform process, aiming to:

• Improve consumer protection through regulation
• Curb illegal gambling by attracting users to legal platforms
• Enhance transparency and oversight
• Increase tax revenue through license-based participation

The Swedish Model: A Cautionary Template?

Finland’s Ministry of the Interior has cited Sweden’s 2019 market liberalization as a model, particularly in terms of licensing structures and responsible gambling frameworks. However, several Finnish industry experts, including gaming lawyer Antti Koivula, have raised concerns about this choice.

Sweden has faced considerable issues since its liberalization, particularly with channelization—the percentage of players who use licensed operators. In 2023, Swedish channelization for online casino games dropped below 75%, raising alarms about the persistent appeal of black-market operators.

Koivula and others suggest that Finland may have been better served by looking to Denmark, where effective compliance controls and lower tax rates have helped maintain a channelization rate near 90%.

What Will Change?

The full scope of Finland’s gambling reform is still being drafted, but some core features have already been outlined:

• Licensing System: Private operators will be able to apply for licenses to offer online casino games, poker, and sports betting.
• Responsible Gambling Measures: Operators will be required to implement player protection tools such as deposit limits, time tracking, and self-exclusion programs.
• Taxation: A proposed gross gaming revenue (GGR) tax is expected, with exact rates under negotiation.
• Advertising Controls: Stricter rules are anticipated to limit aggressive marketing and target vulnerable populations.
• Central Registry: A national self-exclusion system, similar to Sweden’s Spelpaus, will be introduced.

Veikkaus will retain control over lottery games and physical gaming locations, but its online dominance will be diminished significantly.

Impact on Operators

For domestic and international gambling firms, Finland’s regulatory opening represents a lucrative opportunity. The country has high internet penetration and a well-established gambling culture. However, success in this market will depend on operators’ ability to navigate a highly controlled environment.

Key considerations include:

• Compliance Requirements: Adherence to responsible gambling protocols will be non-negotiable, and technical integration with national self-exclusion tools will likely be mandatory.
• Competition: Major European operators already active in nearby markets are expected to apply for licenses, creating a competitive but potentially high-reward landscape.
• Tax and Regulatory Burden: High taxes or burdensome compliance could affect margins, especially for smaller or mid-tier operators.

Impact on Players

For Finnish consumers, the reform promises both more choice and stronger protection. Key benefits include:

• Safer Gambling Environment: Licensed platforms will be required to provide clear, accessible tools for managing gambling habits.
• Improved User Experience: With competition comes innovation. Players can expect better platforms, features, and promotions.
• Transparency: Regulated operators must disclose odds, terms, and licensing information, improving trust and accountability.

However, the transition period could see some confusion or regulatory gaps. Ensuring that players are aware of the difference between licensed and unlicensed operators will be essential.

Challenges and Criticisms

Despite broad support for the reform, several challenges remain:

• Channelization: Successfully steering players away from offshore sites will require competitive offerings, low friction in registration, and effective public education.
• Regulatory Complexity: Developing a fully functional licensing and monitoring system by 2027 is a logistical challenge, especially for a country transitioning from a full monopoly.
• Stakeholder Coordination: The government will need to engage closely with Veikkaus, new market entrants, consumer groups, and treatment organizations to ensure a balanced implementation.

Finland’s decision to liberalize its gambling market marks a pivotal shift with the potential to align consumer protection, market efficiency, and public revenue. However, the success of the reform will depend largely on how effectively it is implemented—and whether the Swedish model proves adaptable to Finnish needs.