Concerns Over Market Liberalization in Finland

Potential Pitfalls of Market Opening

The Finnish government has outlined plans to liberalize the gambling market in 2027 with the stated aim of reducing gambling-related harm and increasing participation in legally regulated systems.

However, Mika Kuismanen, CEO of Rahapeliala Ry, has voiced strong concerns about these changes.

He argues that the proposed liberalization, rather than creating a healthier gambling environment, may have the opposite effect by limiting marketing and sponsorship opportunities for licensed operators.

Kuismanen cautions that the proposal, as it stands, contains critical flaws. “The proposal contains several rather significant details that do not promote a well-functioning gambling environment,” he states.

He warns that the nature of these restrictions might encourage players to remain in, or even migrate to, the grey market, where unlicensed gaming companies operate without regulatory oversight.

Impact on Marketing, Sponsorship, and Bonuses

One of Kuismanen’s primary concerns is the severe limitations that the proposal places on marketing and sponsorship activities. He highlights that the restrictions could significantly impair the ability of licensed operators to promote their services.

“An unreasonable amount of effort is being made to limit gambling marketing,” Kuismanen explains, noting that under the new rules, licensees would only be allowed to market their own gambling services, leaving little room for broader promotional strategies.

Moreover, Kuismanen is particularly worried about the impact on sponsorship arrangements, which are often vital for sports teams and other organizations.

“Since a typical feature of sponsorship is that the marketing is carried out through the sponsored object, i.e., a sports team, the general regulations regarding the marketing of gambling games are not suitable at all for sponsorship,” he adds.

The proposal also includes a ban on bonuses and offers, which Kuismanen argues would put licensed operators at a distinct disadvantage. He points out that unlicensed operators, who would not be subject to these restrictions, could continue to attract players with enticing offers, further driving consumers toward the grey market.

Risk of Pushing Players Toward the Grey Market

Kuismanen asserts that the combined effect of these restrictions could ultimately benefit unlicensed operators.

“The current proposal contributes to feeding players directly into the hands of unlicensed game companies operating on the grey market,” he warns.

He emphasizes the importance of looking at the gambling market holistically and understanding that restrictions on marketing, sponsorship, and bonuses may have unintended consequences.

Goals of the Gambling Reform

Despite these concerns, the government’s proposal aims to address a significant issue in the Finnish gambling market: the high level of unlicensed play.

According to Jari Vähänen, a former executive at Veikkaus Oy, the reform seeks to increase the channelization rate—the proportion of gambling that occurs within the legal, regulated market.

The challenge is significant; Veikkaus reported last year that 54% of Finland’s online gambling activity occurred through unlicensed operators.

The government’s proposal is intended to reverse this trend by encouraging more gambling within the legal framework.

However, Kuismanen’s warnings suggest that without careful consideration of the market dynamics, the reform could inadvertently worsen the very problems it aims to solve.