Veikkaus Strikes Deal with OpenBet to Strengthen Operation as Monopoly End Inches Closer
Author:
Muhammad Gregory
Veikkaus has held an exclusive gambling permit from the Finnish Government to offer sports betting and online games of chance in the country that still runs a gambling monopoly. However, in recent developments, encouraged by the European Gaming and Betting Association (EGBA), the Nordic jurisdiction has decided to opt for a licensing system soon. In light of this development, Veikkaus has struck a landmark deal with online sports betting operator OpenBet to upgrade and prepare for the imminent competition in the Finnish gambling market.
Finnish monopoly operator Veikkaus agrees to partnership with renowned igaming operator OpenBet to enhance its online sports betting platform. ?Alexandr Bormotin/Unsplash
Veikkaus, a government-owned betting agency in Finland, monopolizes all gambling activities in the country. The organization was established in 2017 by merging three pre-existing betting and gambling entities: Veikkaus, Fintoto, and Finland’s Slot Machine Association. Under the Finnish government’s ownership, Veikkaus possesses an exclusive legal license for lotteries and sports betting in Finland. Oversight of Veikkaus is undertaken by the Finnish Ministry of Education, which distributes the generated revenue to various organizations. Profits from Veikkaus contribute to amateur sports, the arts, science, and youth work, allocated by the Finnish Ministry of Education in a socially optimal manner. In response to the government’s proposed gambling regulations, Veikkaus has expressed “full support” for gambling reform in Finland. There have been ongoing discussions regarding the potential cessation of Veikkaus’ gambling monopoly, with particular industry groups and a legislative committee advocating its end.
The gambling market in Finland is primarily regulated by the state-owned company Veikkaus, which holds a monopoly on gambling activities in the country. In 2021, the gross gaming revenue (GGR) of exclusive gambling in mainland Finland was €1,100 million, with 51.4% of the GGR generated through electronic distribution channels. However, there have been discussions about ending Veikkaus’s gambling monopoly, with the government planning to open up the online gambling market and introduce a licensing system for online casino games and betting. This move is in response to the significant amount of gambling activities outside the monopoly system, estimated to cost the Finnish state around €500–550 million per year. Veikkaus has expressed full support for the government’s plans to regulate gambling, and the company is seemingly optimistic about the proposed changes. The government aims to create a system that effectively channels gambling into the licensed supply, with a focus on preventing and reducing gambling-related harm. The online gambling market in Finland is projected to grow by 6.98% from 2023 to 2027, resulting in a market volume of €1.48 billion in 2027.
OpenBet, a leading content, platform, and service provider to the sports betting industry, has recently entered into a significant four-year partnership with Veikkaus. With 25 years of experience in the gaming industry, OpenBet is recognized as a leader in the sports betting market, operating in North America, Europe, and Australia. The company’s modular solutions have led to numerous partnerships with tier-1 gaming operators. This landmark partnership is set to amplify Veikkaus’ digital and retail sportsbook capabilities, with OpenBet’s advanced technology powering Veikkaus’ sportsbook platform and expanding its online and retail betting operations. As part of this strategic move, OpenBet will also provide Veikkaus with its Managed Trading Services, signifying a significant step in strengthening Veikkaus’ position in the evolving European sports betting landscape.
The partnership is expected to redefine the user experience and elevate the sports betting offering, setting an unparalleled benchmark in the industry. This collaboration is expected to significantly impact the sports betting industry in Europe, particularly as Finland moves towards a more inclusive betting system, allowing private companies to apply for sports betting and iGaming licenses. The partnership is poised to contribute to the broader European sports betting market and transform the sports betting landscape in Finland.
Nikos Konstakis, Chief Product Officer at OpenBet, expressed the company’s ambition as a pioneer in regulating markets and emphasized the transformative nature of the partnership.
“By integrating our innovative technology and tailored solutions, we are not just entering Finland; we’re transforming its sports betting landscape. It’s a monumental chapter for OpenBet, and we look forward to setting an unparalleled benchmark with Veikkaus. This reaffirms our position as an undisputed leader in the WLA space, with 18 global partners, and highlights our expertise in the lottery sector and commitment to responsible gaming and driving success for operators through localized strategies.”
Finland Government to diminish monopoly on online gaming
The Finnish government will modernize its online gambling regulations by implementing a licensing system for casino games and betting activities. This shift signals a departure from the country’s exclusive online gambling monopoly, making Finland the sole EU member state still adhering to such a framework. The decision to reform the regulation stems from the loss of substantial taxable revenues, diminished control over the online gambling market, and Finnish players resorting to international gambling websites beyond the reach of Finnish laws. The European Gaming and Betting Association (EGBA) has expressed approval for this development, viewing it as a crucial step in addressing the deficiencies of Finland’s outdated online gambling monopoly.
Introducing a multi-licensing system is anticipated to offer more options and protections for Finnish consumers, foster fair competition among operators, and empower the Finnish government to reassert authority over its online gambling market. The proposed reform responds to heightened public scrutiny of the existing monopoly, with Finnish gamblers seeking increased choices and more competitive betting odds on international platforms. A government study has recommended replacing the current system, marking a significant transformation in Finland’s online gambling landscape. The study revealed substantial financial losses incurred by the Finnish state due to gambling activities outside the monopoly system, amounting to approximately €500-550 million annually. Researchers indicated that roughly half of all online gambling occurs in games not covered by the state monopoly system. Additionally, the study highlighted that gambling outside the state monopoly contributes significantly to gambling-related harm.
BML Group receives temporary relief on Finland fine
Finland’s National Police Board imposed a €2.4 million fine on Betsson’s subsidiary, BML Group Ltd, for violating the Finnish Lotteries Act. The company was found guilty of promoting gambling services in Finland, targeting Finnish players through various marketing channels over an extended period, despite lacking a license to operate in the country. According to the Lotteries Act, only Veikkaus, the national gambling monopoly, can market its gambling offerings to Finnish consumers. Although BML claimed to have changed its marketing during the hearing, the board determined that the targeting of Finnish players persisted.
Due to the ruling, BML is prohibited from marketing its gambling services to players in Finland and has been added to the National Police Board’s list of payment blocks since the prohibition took effect on June 3, 2023. However, a Finnish court granted temporary relief to the company, ruling in its favour. Betsson appealed the decision and won on June 2 when the Helsinki Administrative Court ordered a suspension of the enforcement order and a fine until the completion of the appeals process. Minna Ripatti, one of the founding partners at Legal Gaming Attorneys at Law, provided insights into the court’s decision, focusing on its implications for the National Police Board’s attempts to block payment service providers (PSPs). She highlighted the broader consequences of the decision concerning Finland’s decision to implement a license-based online gaming system.
