Online Casinos or sports betting providers which provide their services and do not hold a German licence have long been a thorn in the side for the lawmakers and the tax authorities. This is however a hot issue even in other European countries. In Finland millions of Euros are lost from taxes from illegal games of chance and there is also the problem that many people are gambling addicted. Can a reform help?

A report which was published recently by the Finnish Ministry of Intern reveals that several losses are being made form uncollected taxes from unregulated games of chance on the internet. It is estimated that between 500 and 550 million Euro are being lost every year. Besides this there are massive problems in trying to combat gambling addiction within the current measures.

Concrete reason for the problems: around half of the people in Finland who make use of online slot machines regularly or place sports bets on the web, are doing this on platforms which are operating outside the state monopoly system.

Games of chance are heavily regulated, i.e. monopolized in Finland

Games of chance are provided under a state monopoly in Finland. The state organisation Veikkaus is responsible.

Veikkaus started operating at the beginning of 2017 when the Finnish games of chance system was reformed. There were previously three operators Fintoto, Finland's Slot Machine Association (RAY) and Veikkaus responsible for the regulation of games of chance. They were merged and formed one games of chance company which till date is still owned by the Finnish government. The Finnish society is benefiting from the revenue of the organisation, which is distributed among different ministries.

The regulations for games of chance were updated several times along the years so that the players are better protected:

  • Access to foreign games of chance companies is basically limited. These companies are blocked as financial transactions are prevented but of course in times of crypto currencies and other international payment methods which are available on the market (partly anonymously) this is hardly implementable.
  • Further to this, one cannot advertise slot machines or similar services. This applies also to influencers and bloggers. High monetary fines may be imposed.
  • Stationary games of chance may only be used with prior registration. Veikkaus checks the data and informs players of harmful behaviour accordingly.

The above measures and other further measures are however levered by unregulated online casinos or sports betting providers.

The Finnish gambling system is looking for an alternative model

Since there are clear shortcomings in the system, the Finish state is now looking for an alternative to the current system used for games of chance. To support this decision the mentioned report analysed the national games of chance orientation of other European countries. It focussed especially on Sweden, Denmark, Norway, France, and the Netherlands.

From these countries only Norway has a state games of chance monopoly which functions similarly to that in Finland. All others make use of a licence system and international providers of online games of chance of the respective market may make use of this system under certain appropriate conditions.

The report weighs the suggestions of having a higher channelling rate, new restrictions which prevent games of chance outside the monopoly more effectively and the licencing of private companies. According to the report the observations made in other countries suggest that the licensing system is the most appropriate choice. 

Conclusion

It is clear for the Finnish State that something must be done to retain the use of illegalised games of chance on the internet. The tax authorities are losing income from the tax which is avoided and the current measures to protect the player are not keeping up with the undermining possibilities available at international online casinos and sports betting providers.

It is still not clear which way the state will take. However, everything points out to a licencing system as is already the case in other European countries. However, it is questionable whether this will be the final solution. If one looks at the gaps and loopholes in the German regulations, one already becomes sceptical.

Image source: https://www.pexels.com/de-de/foto/finnland-flagge-fotografie-997611/

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