Finnish Government Advised to Sell Veikkaus Monopoly Ownership

According to local consultant Jari Vähänen, Veikkaus, the Finnish government-owned betting agency holding a monopoly in the country, could gain an important competitive advantage over licensed operators. 

This could occur in 2027, the year that will mark the legalization of the online gambling market in Finland. 

Finnish Gambling Consultants (FGC) partner Vähänen implied the government should therefore sell off its ownership of the monopoly. 

Originally, the government set out its plans to end the current monopoly by the end of 2026. 

The Dual Role, Creating a Conflict of Interest

As the Ministry of Finance is getting ready to form a new regulator that would supervise the market, Vähänen thinks the dual operator-authority role would generate a “high risk of conflict of interest.”

He added the matter has also been flagged by the country’s chancellor of justice as well as the competition and consumer authority as part of their proposal responses.

Once the draft regulations aimed at legalizing online gambling were made public in June, the Ministry of the Interior inferred the possibility of selling off its stake in the monopoly, explaining that “the state would have the opportunity to give up part of its ownership” provided “this was considered justified in the future” as a means of boosting shareholder value. 

Customer Base Worth Hundreds of Millions 

Vähänen thinks Veikkaus’ legacy player database and tech stack would provide it with an unfair advantage against competing licensed online operators. 

The respective competitors will be legally allowed to move into licensed gambling markets in the country in 2027.

According to the fresh regulations, Veikkaus will be split into distinct operating units. 

The units will feature the monopoly arm, business-to-business operation Fennica Gaming, as well as a licensed online gaming business. 

At the same time, the monopoly will maintain exclusivity over a series of games in exchange for an annual fee for exclusivity rights. 

The list will include lottery, toto games, a form of sports betting based on lottery, scratchcards, and slot machines.

As for the online business sector, the way it will be separated from the monopoly operations remains uncertain. 

According to Vähänen, who spent seven years at Veikkaus between 2013 and 2020, Veikkaus’ estimated customer base is currently worth hundreds of millions of euros. 

Vähänen asked for a clear policy on whether Veikkaus’s customers will be transferred to its licensed business, adding that by establishing an in-house technology business, Veikkaus could enjoy yet another competitive edge via omnichannel marketing opportunities across online and retail and slot players.

The consultant made it clear that the monopoly should not be allowed to offer the same games as the online licensed business while advising against Veikkaus’ monopoly over pool-based horse betting and digital instant win games. 

Finally, the filing does not want a ban on bonusing and affiliates, arguing it would interfere with the channelization rates.

Vähänen wishes affiliate activity to be “significantly cleaner” compared to the current situation which he defined as completely unregulated.