Shoppers playing slot machines in a mall in Helsinki / Lehtikuva

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Over the past few years, the hidden battle between government-owned company Veikkaus and online casino providers oftentimes operating from Malta has become more intense. Both sides have taken extra measures in order to offer better services. Yet, Veikkaus has been facing criticism over its more aggressive marketing acts and the placement of slot machines in more deprived areas of Finland.

The criticism stems from stakeholders and publics, blaming Veikkaus for fueling gambling addiction and addictive behaviour with recent actions. In 2019, the state monopoly had to answer criticism over two advertising campaigns, one of which conveys a message of gambling as a daily activity or necessity

Despite growing criticism, attracting Finns to Veikkaus’ online casino seems to be a part of their strategy. In 2018, Veikkaus signed up major contracts with two major video game and slot game providers NetEnt and Yggdrasil and integrated their game to Veikkaus’ online platform in 2019. Regarding NetEnt games, The Vice President of casino games at Veikkaus Jan Hagelberg has stated that Veikkaus’ customers have been requesting for NetEnt games. Both providers have many well-known slot games that have been available at Malta-based online casinos for a long time, so a shift from creating games from scratch towards purchasing popular games is a strategic move. 

One competitive advantage that Veikkaus had over online casinos operating abroad was quick depositing and the possibility to sign up and log in with an online bank ID allowing Veikkaus to identify the user in seconds. Over recent years the industry has been able to answer the issue by utilizing Trustly, a money transferring service allowing Finns to use bank IDs as an identification method.

Revenue from gambling as a financier of culture and sports

The core value on which operating a gambling company as a government-owned monopoly has been based on is the way it handles the profits. Most of the profit is directed to culture, sports, research and other social causes. This funding has a crucial value for some small organizations in fields listed above, some even depending on it. And, as Veikkaus’ competitors are gaining more popularity due to their various offers, better return to player -rates and more games available at hand, it has been seen as a threat for the future of funding these organizations. 

One of the organizations receiving funding from Veikkaus is Peluuri, an organization working for preventing gambling addiction and helping addicts to recover from it. According to the report from 2019 conducted by the Finnish Institute for Health and Welfare, gambling on high-risk levels has lessened, but online gambling has been growing in all age categories. The dilemma of whether a government-owned monopoly should be the one supporting gambling prevention is always discussed. Online gambling and slot games are however acknowledged as high-risk games for those who have a tendency for addictive behaviour. This creates a struggle on how to promote games and attract people to play responsibly and at the same time, prevent gambling addiction.  

Should Finland follow Sweden’s footsteps?

Although it is a known fact that Veikkaus is going along with the crowd by signing agreements with popular game providers in order to attract Finns back to spend money at Veikkaus, there have been speculations on whether Finland is going to follow Sweden in regards to gambling laws. Before the change, Sweden had a similar structure as Finland still has. There was a government-owned gambling operator, and at the same time, Swedes were also playing at online casinos operating under Malta’s gambling license. 

The new Swedish Gambling Act came into force on 1st of January 2019, which had a major effect on online casino providers previously operating under Malta Gaming Authority. Spelinspektionen, The Swedish gambling regulator has been licensing and monitoring operators under its license. Whereas many well-established, major online casino providers such as Betsson Group, Kindred Group and many others applied and received the license to operate legally in Sweden, others had to shut down due to the costs and strict marketing restrictions of the Swedish gambling license. 

The pressure to renew gambling laws in Finland has existed for many years. Discussions regarding tearing down the monopoly in Sweden started already in 2017, fueling the discussion in Finland as well. During the first year of implementation of the Gambling Act, the Swedish government received over 2.3 billion euros in total. These came from gambling taxes, licenses and fines. Many companies, such as Betsson Group, got major fines for breaching the conditions of the licence. For instance, Betsson Group got fines worth 19 million SEK (around 1,8 million euros) plummeting their year-on-year quarterly revenue from 301 million SEK from 2018 to 197 million SEK in 2019. Later in 2019, multiple online casino operators were fined by The Swedish Gambling Authority for showing a live stream of an under-18 football match as a part of betting services.  

Needless to say, the licensing model has worked out well for Sweden by bringing cash and tackling marketing acts by strict restrictions regarding incentives such as deposit bonuses as well as free spins, and many Malta-based online casino operators have faced severe losses in revenue. Although Swedes engaging in gambling activities have complained about the system, the industry still exists; thus, people are playing, but they are spending less than before. 

So far, Finland has not taken any actual steps towards shifting from a government-owned model towards a licensing system, but it has been acknowledged as one possibility. For now, however, Veikkaus’ strategy continues to be trusting in people’s trust towards a government-owned company compared to online casinos operating for profit as well as renewing features and signing up agreements with popular game providers in order to diversify their portfolio. Despite criticism, many perceive government-owned gambling operators as the lesser of two evils. 

 

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