Was Finland's adoption of Sweden's market liberalization strategy an ideal approach to emulate?
As Finland gears up to abandon its gambling monopoly, starting in January 2027, it views Sweden's gambling laws as a guiding light for its own market. Antti Koivula, a local legal expert, however, has cautioned that Sweden's issues with illegal sites and a suboptimal channelization rate may make it less than ideal for Finland to model itself after.
Sweden, with its shared history of gambling monopolies, comparable welfare models, and similar player protection standards, initially seems like a natural fit for Finland. Sweden executed significant gambling reforms in 2019, liberalizing its online gambling market and setting up taxation and licensing frameworks.
However, Finland's new gambling regulations, patterned after Sweden's, are criticized for failing to adequately address the black market threat. Koivula expressed concerns to our website, stating, "Sweden faces significant challenges, particularly with enforcing against the black market. This is a crucial issue that Finland, sadly, hasn't fully tackled, and the proposed enforcement tools may likely prove insufficient."
Koivula argued that Denmark could have served as a better model for Finland. "While the Swedish system seemed a logical starting point for Finland, it might not be the ideal benchmark, especially considering its ongoing struggles with the black market and limited dialogue with the industry," he said.
Denmark, which launched its online gambling market in 2012, is widely regarded as a triumph, with the Danish gambling authority, Spillemyndigheden, announcing in April 2022 that it had managed to maintain a commendable 90% channelization rate. Morten Ronde, CEO of the Danish online gambling trade body Spillebranchen, previously told our website that the market's success stemmed from a player behavior-driven approach to regulation.
In 2020, Sweden introduced mandatory online casino limits to protect players during the Covid-19 pandemic, anticipating drastic increases in player activity due to lockdowns. However, this move was met with heavy criticism, and Ronde noted that Denmark instead chose to closely monitor data and player behaviors, discovering that players had not significantly increased their gambling, and no measures were enforced.
Sweden faces a myriad of challenges, but the government and regulator are actively attempting to mitigate the impact of the growing black market. In February 2022, the government initiated a review of its Gambling Act in response to a letter from the gambling trade body BOS, requesting a review of a loophole in the gambling law. The rules do not penalize illegal operators for offering activities in English and using euros, instead of Sweden's local currency.
BOS has also long called on the government to privatize the lottery monopoly Svenska Spel's competitive business, arguing that state ownership creates a conflict of interest. BOS repeated this call in December, following the state's sale of vehicle inspection company Bilprovningen to TÜV Rheinland.
This sentiment has already been echoed in Finland, as stakeholders have warned that the government's ownership of Veikkaus could give the operator an unfair advantage in the liberalized market.
In terms of illegal gambling, Swedish horseracing operator ATG reported that online channelization was between 69% and 82% across the entire market in Q4, significantly below the Swedish regulator's long-term channelization target of 90%, established when the market launched in 2019.
Despite its ongoing challenges, Koivula noted several positive aspects of Sweden's model, such as the national self-exclusion platform Spelpaus, which the Finnish regulator has taken note of. "The Swedish model has several strong points that the Finnish regulator has acknowledged," he said.
Industry watchers have suggested that Finland's move to liberalize is, in part, an effort to strengthen Veikkaus' position in the market, as the Finnish monopoly has seen sales decline in recent years. In its 2024 full-year results, published on 5 March, Veikkaus posted a sales revenue decrease of 7.3% year-on-year to €956.2 million.
In anticipation of the reform, Sweden's racing monopoly AB Trav och Galopp and the Finnish equestrian association Suomen Hippos have established a joint venture to operate a brand in Finland's market. Following initial legislation that included restrictive marketing measures such as the banning of affiliate marketing and customer bonuses, the industry successfully lobbied to have these measures removed from the bill sent to the EU for approval in November.
- The Finnish government, as it prepares to abolish its gambling monopoly in 2027, is closely observing Sweden's gambling laws for guidance, acknowledging that Sweden's approach could potentially serve as a foundation for its own market.
- A local legal expert, Antti Koivula, has voiced concerns that Finland's suggested regulations, modeled after Sweden's, might be inadequate for effectively combating the illegal gambling market.
- In contrast, Denmark's online gambling market, established in 2012, has been hailed as a success, with the Danish gambling authority (Spillemyndigheden) proudly announcing a commendable 90% channelization rate in April 2022.
- Swedish stakeholders, including the gambling trade body BOS, have repeatedly called for the privatization of the state-owned lottery monopoly Svenska Spel, arguing that state ownership creates a conflict of interest and may result in an unfair advantage for the operator in the market.
