The proposal for Finland's new gambling legislation has finally been published, and stakeholders have commented on it. As many as 130 statements were collected during the public hearing process, and now the authorities are analyzing them and thinking about how they might affect the final content. According to unofficial information, the purpose is to complete the legal package during October 2024 and then send it to the EU notification process. At that stage, we will know even more precisely what Finland's new gambling system will be like.
However, we can already evaluate the future system at this stage because it is assumed that the "big picture" will not change much compared to the proposal published at the beginning of July. As I have stated in my previous writings, Finland's goal is to raise the channelization rate of the gambling system as high as possible, preferably close to the 90 % level. This is intended to be implemented so gambling companies get the best possible business opportunities. Still, even so, the number of gambling problems should at least not increase but rather decrease.
The business opportunities of gambling companies are greatly influenced by the marketing they are allowed to do in Finland. My focus in this blog is to evaluate the marketing and sponsorship content of the gambling bill. Will the operators acquiring the license have sufficient opportunities to market their brand, products, and services? Are those opportunities better than illegal companies operating without a Finnish license? Will the channeling ability of the gambling system rise to the desired level, and will the gambling problems remain under control?
Marketing will be allowed but limited
Gambling marketing will be allowed in Finland's new system. Well-planned marketing regulation helps licensed companies attract customers and gambling into the legal system, increasing the channelization rate and enabling the authorities to regulate as much gambling as possible. Fortunately, the legislation's drafters have finally understood how this dynamic works.
It is a pity that the starting point for marketing regulation is Finland's current legislation, which only applies to the monopoly company Veikkaus. This shows that the law's drafters either do not know or do not want to know the legalities of the modern gambling business. For some reason, the officials don't understand that the current regulation that significantly limits the operation of Veikkaus is the main reason our gambling system's channelization rate has collapsed, especially in digital sales channels. Veikkaus has been banned from several activities that offshore operators use daily. Active customers, in particular, have switched to other companies following better offers. The restrictions on the operation of Veikkaus would still be acceptable if they would have reduced gambling problems. However, the opposite has unfortunately happened, i.e., the problems have also grown.
In general, I can say that gambling marketing in mass media will be possible without any significant limitations. Still, in digital media, there would be many restrictions that offshore companies are not used to elsewhere. I am afraid that the restrictions may be so significant that at least some potential companies decide not to apply for a Finnish gambling license.
Finland wants to ban affiliate activity
Based on the bill, only the gambling company is allowed to market gambling. This marketing includes both brand and product advertising. The bill states that a "third party" is not permitted to do gambling marketing. However, the proposal does not define what marketing means in practice. Regarding this limitation, it should be noted that affiliate activity is not possible for the current monopoly company, so presumably, the law drafters have also taken this idea from the current legislation and have not sufficiently familiarized themselves with the operations of other countries.
The proposal aims to prevent celebrities and social media influencers from marketing gambling. However, the current definition also includes affiliate services common in digital channels. These services aim to provide sports punters and casino players with information about gambling content. Although these affiliates often make their income from customers' gambling losses, these sites also offer valuable information to support gambling.
According to my understanding, the share of gambling companies' new customer acquisition coming through affiliate operators is very high, in some cases even close to one hundred percent. Affiliate operators are search engine optimization professionals and will undoubtedly continue their activities, even if efforts are made to prevent their activities by Finnish legislation. In this case, the affiliates will serve operators outside the system, which will automatically decrease the channeling capacity of the system. This is not in Finland's interest. Instead, a solution should be found to allow affiliate activity and bring it within the scope of Finnish legislation.
So, I'm in favor of allowing affiliate activity, even though I wouldn't say I like it. However, I believe it is a better solution for everyone that affiliates can work in cooperation with licensed operators than that they remain tools of illegal activity.
Bonuses are going to be banned
Another common feature of gambling that I dislike is the offer of bonuses. In my opinion, bonuses are, generally speaking, "cheating" customers. However, I don't think offering bonuses can be stopped in the world's gambling business. For this reason, I consider the Finnish bill to be a lousy solution, based on which offering all kinds of bonuses and similar customer benefits will be prohibited.
I believe this proposal also originates from the current legislation, based on which Veikkaus is not allowed to offer bonuses, discounts, free spins, or give customers betting money. Such offers are widely used in the international gambling business. In Sweden, the supply has been significantly limited, but there is no complete ban there either. Gambling companies operating with a Swedish license consider the current bonus restrictions to be the biggest reason why the channeling capacity of the Swedish system is now rapidly decreasing. This happens especially in online casino gaming, where companies with a Curacao license take Swedish customers with bonus offers.
If affiliate operators and bonuses are prohibited, new gambling operators coming to Finland will have significant challenges getting customers. This primarily serves the interest of Veikkaus and possibly a couple of other big gambling companies, which already have many Finnish customers, and distorts the competition. Therefore, concerning bonuses, a way should be found to allow them, at least to some extent, in Finland as well.
I propose that bonuses be allowed so the gambling company can only set a wagering requirement of one round for them. The customer could, therefore, claim the bonus money for himself after he has played that amount in the company's games once. In this model, it would be much easier for the customer to understand what he is getting than in the current offshore model, where the money has to be played dozens of times before he gets it for himself. From the point of view of the operator, the model I proposed is much worse financially compared to the current model, where the companies practically do not give out money at all.
There will be just few restrictions on mass media marketing
Based on the bill, the Finnish mass media has been highly successful in lobbying. In practice, gambling advertising in the mass media seems to be possible almost without any restrictions. Of course, there will be restrictions and prohibitions for marketing aimed at children and other groups of minors.
If the digital media marketing methods increasingly used by offshore companies are banned, there is a significant risk that the general public in Finland will encounter a lot of gambling marketing in mass media - TV, radio, and newspapers. In Sweden, this has caused public opinion to turn negative towards gambling. There has been far too much marketing in mass media, according to the opinion of ordinary Swedes. Finland should not find itself in the same situation because it is against the interests of all parties operating in the gambling business.
I propose that while digital media's marketing restrictions are reduced, mass media marketing is tightened. One option to be considered could be a restriction according to which the mass media should only contain brand advertising of the gambling companies, which should not include an order to gamble. In this way, the gambling companies would make their brand known among Finns, but people would not have to face the "play now right now" type of advertising against their will. Operators could give such messages in their betting services when customers come to play.
Sports sponsorship will be possible
One crucial marketing tool, especially related to betting, is sponsorship. The bill allows gambling companies to enter into sponsorship agreements with sports and other parties. Restrictions are proposed for sponsorship to prevent or at least limit exposure to minors.
I have previously criticized proposals concerning marketing, but concerning sponsorship, it must be said that I think the bill is well-founded, and its content seems reasonable. However, in the proposal's arguments, a model is presented for consideration, namely that the gambling company should not be the so-called title sponsor. If implemented, this proposal would make the current model, where Veikkaus is the title sponsor of the Finnish football league, impossible. I think that would be an unnecessary restriction.
Finnish sports, or at least the most prominent sports leagues, are already excitedly waiting for new revenue streams to open up. However, based on the experiences of Denmark and Sweden, I believe that only football and ice hockey will make up for the larger amount of money in the new model.
JARI VÄHÄNEN
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