End of an Era - Finnish Government’s Draft Proposal on a Gambling License System

The Finnish government published its draft proposal for a new online-gaming and gambling legislation earlier in July on 3.7.2024. The topic might be familiar to you since we have discussed the potential future regulatory landscape in our previous articles on The beginning of legislative projects to reform Finland’s gambling system and From monopoly to a license model – the Finnish gambling system in historical transition.

Nordic Law has actively been following and participating in the discussion that already began in autumn 2022 and has been anticipating what the future of Finland’s gambling system might look like. The latest publication has not been an exception, and we have been familiarizing ourselves with the draft proposal all summer, since the statement round and consultation period subject to the draft proposal is open only until 18.8.2024. Now with the proposed changes to the gambling legislation and a drafted proposal for a national Gambling Act the future of a partial license model is closer than ever before.

Draft Proposal on a Gambling License System

In its draft proposal the Finnish Government has proposed on legislation for a partial gambling license system and a Gambling Act in accordance with which the monopoly of Veikkaus Oy would be dismantled. In light of the draft proposal gambling operators would be allowed to provide gambling services within the Finnish jurisdiction based on a national license. The license types in the draft proposal are:

• Monopoly license
• Gambling license
• Game software license

A monopoly license could be provided only to a State-controlled limited liability company that operates in the gambling industry providing and enforcing gambling services, who meets the criterion for a monopoly license specified in the proposed Gambling Act and whose affective management and owners meet the fit and proper criterions laid out in the proposed Gambling Act. Currently only Veikkaus Oy would in practice meet the criterion for a monopoly license in Finland.

Other operators seeking to offer and enforce their gambling services on the Finnish gambling market could, considering the draft proposal, apply for a Gambling license. The Gambling license could be applied for the provision of services referring to fixed or variable stake betting, for the transmission of online casino games, online bingo and online slot games. However, offering gambling services in crypto-assets is currently not allowed in accordance with the draft proposal, to being said, without proper justification.

Operators with either a monopoly license or a gambling license would only be allowed to use the services provided by an operator that has a Finnish Game software license for the manufacturing, supply, installation or adaptation of software used in their operations. This would mean that also the software used in gambling on the Finnish markets would be subject to Finnish licensing and supervision.

Licensing, Operations and Restrictions

Restrictions on gambling services are proposed to include a ban on outsourcing the marketing to the third-party operators and specific restrictions on marketing and interactivity. A licensed gambling operator would not be prohibited from utilizing marketing, specific sponsors, or social media platforms. However, the draft proposal effectively prohibits interactions and re-sharing of gambling content uploaded by a gambling operator and sets precise rules for allowed marketing channels. The use of affiliate marketing would be prohibited which in the draft proposal is also expected to better the channelization of online gambling to gambling platforms and online casino services operated under a Finnish license. Additionally, a complete ban on bonuses, free spins, and other offers is proposed.

Both the adaptation of a license model system and restrictions referring to marketing and operations of gambling services are rationalized with the aim of better preventing harmful effects of gambling. By advancing to a licensing model the national authorities are expected to have better control and intervene in actions and operations that are unlawful or disruptive for the aims of the proposed legislation.

Even though the draft proposal entails the initiation of a legislative project that offers opportunities for operators seeking entry into the gambling markets in Finland, it also means that all operations would be subject to national licensing and supervision. Currently, the draft proposal would administer the National Police Board of Finland as the license authority starting on 1.1.2026, but a license- and supervisory authority may be established for the task starting from 1.1.2027.

As already said, the statement round and consultation period subject to the draft proposal is open until 18.8.2024.

Let’s Be in Touch!

At Nordic Law, we have extensive experience working with clients in the gambling industry, whereby we have accumulated knowledge of the industry’s legislation throughout the EU. We will continue to assist clients in the gambling industry with a wide range of questions that may arise due to the changing situation and regulatory landscape in Finland.

We are happy to discuss with you how to enter the Finnish markets as swiftly as possible and what methods operators can use to contribute to their expertise to the legislative project. If you wish to form your statement before the consultation period ends, please contact us with low threshold – we are happy to assist.

Our Associate Trainee Charlotta Grandell took part in writing this article.