While the gambling sector monopoly in Finland is financially successful, there is increasing concern about the rise in problem gambling in the region. Some people are calling for changes to be made and the sector could be in for a bumpy ride going forward.
Gambling in Finland
The way the gambling sector in Finland is structured has not changed much over the years. The government has a monopoly on gambling. Despite the European Union putting on pressure to end the monopoly, it doesn’t look as if the country plans to do it in the near future.
Slot machines first entered the country in the 1920s, and the government started to grant licenses for their operators in 1933. After constant arguing about the sector, a central authority called RAY was created in 1938 to oversee the slots sector and to make the machines the basis of funding to help those with gambling problems.
RAY shares the government monopoly with the Finnish National Lottery, which uses a lot of the revenues to help fund artistic, cultural, scientific and sporting pursuits, and Fintoto Oy, which focuses on horse racing.
There is a separate province in Finland that is made up of 6,500 islands in the Baltic Sea. The Play among Friends (PAF) group controls the gambling in that area.
When online gambling started coming to prominence, PAF and RAY were in competition. In 1999, PAF had launched its own online sports betting and casinos. However, the 2002 Act on Gaming established RAY as the single online gambling provider in mainland Finland.
Despite this, many mainlanders preferred to use PAF services because they offered better odds. When RAF threatened legal action, the government intervened and made a deal so both groups could operate in this space. While there is no law preventing Finns from gambling with overseas companies, the government does try to deter it.
Current state of gambling
For many years, the state monopoly has proven to be a success in funding its goals. With billions being spent annually on gambling in the country, the revenues are lucrative for the government. It seems that everyone is benefiting, from those who enjoy playing their favorite games to the causes that are funded.
However, because of new data released recently, the current way of doing things is being challenged. The social and economic costs of widespread gambling have led to a lot of people to question how smart the current system is.
The research in question, conducted by the National Institute of Health and Wealth, found that problem gamblers are contributing 23% of all gambling revenues. Then there is the group of people who don’t have much money that they can lose, such as the unemployed, pensioners, etc., who account for nearly 33% of the country’s total gambling revenues.
This, of course, has a lot of implications down the line. A researcher from the University of Helsinki, Janne Nikkinen, called it “a Robin Hood system in reverse.”
In essence, he is saying is that the government is taking money from the pockets of the poor and giving it to rich people. A large portion of the adult population gambles, about 80% of them according to a 2015 study.
Of course, most of these people won’t have an issue with gambling, but about 3.3% (124,000 people) are problem gamblers. Their gambling, of course, has a ripple effect on their family and friends. A high proportion of problem gamblers come from underprivileged backgrounds.
What happens next?
The European Union has been calling for the dismantling of the gambling monopoly in Finland for some time due to its protectionist nature. EU regulations state that government monopolies are only allowed when they lower or prevent harms that arise from gambling.
Slots machines are more highly concentrated in poorer areas, and there are calls for this to be changed. People in the state monopoly believe that identity authentication systems could be the optimal way to deal with problem gambling. They are due to be introduced by 2023.
Whatever happens, it appears that change of some sort is on the horizon for gambling in Finland.