Finland’s state-led gaming monopoly, Veikkaus, has come to realize what others in the industry have been trying to say for years – monopolies don’t work. As a result, Veikkaus could be ready to throw in the towel.
Finnish media outlet Ylen Ykkösaamu highlighted in a recent article that Veikkaus is considering a shift in the country’s gaming market. Where it once gripped the market tightly with no desire to let go, Veikkaus could move to dismantle itself.
The surprise decision doesn’t come from a journalist’s interpretation of the company’s efforts. Instead, it comes from Veikkaus itself, which confirmed its decision this week.
Gaming Monopoly a Failed Experiment
When Veikkaus issued its interim report last week, it hinted at a change in the market. It mentioned a possible change in strategy and the potential for the country to have an open market.
Velipekka Nummikoski, Deputy CEO of Veikkaus, reiterated the position this week. He participated in an interview with the media outlet, confirming that eliminating the monopoly is probably the best option.
The decision follows a constant review of the gaming market, as well as the revenue Veikkaus is earning. Its financial situation is deteriorating as more gamers turn to unregulated, unlicensed platforms.
Instead of trying to force gamblers to use Veikkaus, a task that produces more challenges than solutions, Nummikoski concedes defeat. He and the other Veikkaus leaders welcome the idea of opening up a regulated market, perhaps introducing a legal framework similar to what Sweden offers.
Veikkaus CEO Olli Sarekoski spoke about the possibility of change again this week, as well. He told another media outlet, Helsingin Sanomat, that the writing’s on the wall.
Sarekoski explained that Veikkaus’ market share in the digital market has fallen by five percentage points year on year. It is also “approaching the 50% threshold,” which he considers a critical level.
The threshold refers to the use of offshore sites, which continues to gain ground. Therefore, without any relief, Finland must begin to consider making changes.
Foreign gaming operators enjoy virtually unfettered access to Finnish consumers. By scrapping the monopoly and transforming the market into an open and regulated one, all operators would then be on the same ground.
After 70 years, the monopoly may fall.
Rehashing An Old Theme
Dissolving the monopoly is not a novel concept. On the contrary, it is a recurring theme that has received support numerous times before. Last December, the European Gaming and Betting Association (EGBA) highlighted the fallacy of the monopoly when lawmakers tried to force payment providers to get involved.
The EGBA also predicted that more consumers would turn to offshore sites and that wager limits would cause more damage. It was right.
Veikkaus obviously realizes it’s in a bad spot. The introduction of loss limits was especially devastating, although it later tried to put a band-aid on the issue. In June, for certain gamblers, it lifted the limit.
Veikkaus announced that gamblers didn’t have to abide by the annual loss limits if they met certain requirements. These included three consecutive years of winnings and turnover of €500,000 (US$496,650) or more.
However, it was too little too late. On the other hand, it may have been just what Finland needed to wake up from the monopoly dream.
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