Should Finland Use Sweden as a Template for Gambling Liberalization Reform? As the country plans to end its long-standing gambling monopoly in January 2027, Sweden's recent gambling regulatory model is being viewed as a blueprint for Finland's reform.
However, Finnish local legal expert Antti Koivula cautions that Sweden still faces significant challenges in curbing illegal gambling sites and improving channelization rates, and Finland may overlook the critical issue of an intensifying black market threat if it blindly follows suit.
In an interview, Koivula pointed out that although Finland and Sweden share high similarities in gambling systems, welfare models, and player protection philosophies, and Sweden has completed the opening of the online gambling market, tax system construction, and licensing framework since 2019, this model is not flawless.
Finland's new bill emulates Sweden, allowing the state monopoly operator Veikkaus to compete with private gambling companies. However, Koivula noted that the enforcement tools proposed in the draft may not be sufficient to effectively combat illegal gambling operators. "Sweden still struggles to control the penetration of black market sites, and there are obvious shortcomings in law enforcement and regulatory implementation, while Finland seems not yet ready for this," he said.
He suggested that Finland should focus on more efficient market models, such as Denmark. "Sweden is certainly a reasonable starting point, but not the ideal benchmark. In comparison, Denmark's regulatory practices have been more successful in controlling the black market, and there is also a closer dialogue between regulatory bodies and the industry," he added, also mentioning Ontario, Canada, as another jurisdiction worth considering.
Why is Denmark a Better Model? Since opening its online gambling market in 2012, Denmark has maintained a channelization rate of about 90%. Its regulation is based on data and player behavior, avoiding the controversy caused by Sweden's hasty introduction of online casino restrictions during the pandemic.
In contrast, Sweden's challenges are becoming more significant. According to data from the Swedish horse racing operator ATG, the online channelization rate in the fourth quarter of 2023 was only 69%-82%, far below the government's initial target of 90%. Some illegal gambling operators still exploit regulatory loopholes, navigating the market in euros and English, evading punishment.
Moreover, the Swedish government's ownership of the state gambling enterprise Svenska Spel has also been criticized for creating market fairness issues. This "state player" participation in free competition has also raised concerns among Finnish stakeholders about Veikkaus's status under the new system.
However, the Finnish side also recognizes some positive practices in the Swedish model. For example, the national self-exclusion platform Spelpaus has become a key tool for protecting players and controlling addiction, and it has been included in Finland's reform considerations.
The backdrop for pushing reform is Veikkaus's own market performance, which continues to decline. Its 2024 financial report shows a 7.3% year-on-year decrease in sales revenue, to 956.2 million euros. To maintain its market position and cope with private competition, Veikkaus also supports liberalization measures.
Koivula stated, "It is important to ensure that Veikkaus's subsidiaries can compete fairly with private enterprises in the open market while retaining some vertical areas of state control. Although the proposed legislation is not perfect, it has taken a crucial step in this direction."
It is worth noting that the Finnish government has modified some of the initial draft content under industry pressure. For example, the earlier draft's proposals to ban affiliate marketing and customer rewards have been removed from the final version submitted for EU approval.
Meanwhile, the Swedish horse racing company ATG and the Finnish Equestrian Association Suomen Hippos have already established a joint venture brand, preparing to seize the opportunity in Finland's open market. The new phase of gambling regulation in Finland has just begun.
