Finland’s State-Run Gaming Operator Admits Monopoly Isn’t Working

Posted on: September 7, 2022, 09:35h. 

Last updated on: September 7, 2022, 02:17h.

Finland’s state-led gaming monopoly, Veikkaus, has come to realize what others in the industry have been trying to say for years – monopolies don’t work. As a result, Veikkaus could be ready to throw in the towel.

Finnish gaming monopoly Veikkaus
The flag of the Finnish gaming monopoly Veikkaus flies outside its office. The state-run company is willing to give up its monopoly in favor of an open and regulated market. (Image: Veikkaus)

Now Veikkaus is considering a shift in the country’s gaming market, according to Finnish media outlet Ylen Ykkösaamu. Veikkaus may now move to dismantle itself. The surprise decision doesn’t come from a journalist’s interpretation of the company’s efforts. Instead, it comes from Veikkaus, which confirmed its decision this week.

Velipekka Nummikoski, Veikkaus’ deputy CEO, reiterated the position this week. He participated in an interview with Ylen Ykkösaamu, confirming that eliminating the monopoly is probably the best option.

When Veikkaus issued its interim report last week, it hinted at a change in the market. It mentioned a possible strategy change and the country’s potential to have an open market.

Gaming Monopoly a Failed Experiment

The decision follows a t review of the gaming market and Veikkaus revenue. Its financial situation is deteriorating as more gamers turn toward unregulated, unlicensed platforms.

Instead of trying to force gamblers to use Veikkaus, a task that produces more challenges than solutions, Nummikoski is conceding defeat. He and the other Veikkaus leaders welcome the idea of opening up a regulated market, perhaps introducing a legal framework similar to what Sweden offers.

Veikkaus CEO Olli Sarekoski spoke about the possibility of change again this week. He told another media outlet, Helsingin Sanomat, that the writing is on the wall. Sarekoski explained that Veikkaus’ market share in the digital market has fallen by five percentage points year on year. It is also “approaching the 50% threshold,” which he considers a critical level.

The threshold refers to the use of offshore sites, which continues to gain ground. Therefore, without any relief, Finland must begin to consider making changes.

Foreign gaming operators enjoy virtually unfettered access to Finnish consumers. By scrapping the monopoly and transforming the market into an open and regulated one, all operators would be on the same ground.

As a result, after 70 years, the monopoly may fall.

Rehashing an Old Theme

Dissolving the monopoly isn’t a novel concept. On the contrary, it’s a recurring theme that has received support numerous times. Last December, the European Gaming and Betting Association (EGBA) highlighted the fallacy of the monopoly when lawmakers tried to force payment providers to get involved.

The EGBA also predicted that more consumers would turn to offshore sites and that wager limits would cause more damage. It was right.

Veikkaus announced that gamblers didn’t have to abide by the annual loss limits if they met certain requirements. These included three consecutive years of winnings and a turnover of €500K (US$496,650) or more.