A Finnish law firm has informed the Helsinki Times that betting and gambling are the third biggest growth drivers of over-indebtedness among Finns.
Takaisinperintä, a law firm which specialises in serving financially vulnerable clients, told the outlet that it had conducted a survey of 765 heavily indebted people, asking them what they had taken out payday loans for.
A total of 28% of respondents said that they had taken out loans for betting and gaming, coming behind payments for clothing, accessories or electronics, with urgent household maintenance the most widely stated reason for taking out a short-term loan.
The findings come at a critical juncture for Finland’s gambling sector, which is in the process of being reformed from a monopoly system to a multi-licence mass market model. The government launched legislation to parliament earlier this year with the goal of creating a multi-licence market in 2026.
The recent findings may lead to further debate around player protection and social responsibility in Finland as legislators continue to hash out the framework of the proposed Finnish Gambling Act.
At its core, the act will break up the monopoly held by the state-backed Veikkaus Oy. It is worth noting that Veikkaus itself is in favour of breaking up the monopoly, due to sharing the government’s concerns around low channelisation rates in Finland. A likely outcome will see Veikkaus retain exclusive control over lotteries and land-based gaming while private licences are issued for online betting and casino.
Finland’s government has been concerned about the number of Finnish consumers gambling with offshore firms, which do not pay tax in the country and do not adhere to its player protection requirements. This has led to spats with some companies, like BML Group.
Gambling reform proponents argue that changes are needed to get Finnish gambling revenue back under control. This was argued by MP Jani Mäkelä, Vice Chair of Veikkaus’ Supervisory Board and Chair of the Finns Party, in a recent video shared online.
“At the moment, Finland cannot tax operators that fall outside our monopoly system,” he said. “With the new licensing model, these companies can apply for a licence to operate in Finland, and we can finally bring that revenue under national control.”
Reform advocates like Mäkelä also argue that competition will be good for the market overall, providing Veikkaus with motivation to improve its own offering and better compete with the overseas firms that have been plaguing channelisation rates for years.
Veikkaus market share of online betting and online casino in Finland have previously been estimated to be at 20% and 40% respectively, far below the minimum target of 50%. Reform will bring this revenue under Finnish tax frameworks while also ensuring that Finns are better offered better legal protection, advocates argue.
Mäkelä continued: “This reform is about fairness, responsibility, and making sure that gambling is both well-regulated and beneficial to Finland – not foreign operators.”
In this context, Takaisinperintä’s stats may further fuel reformists’ fire, as many of the Finns who have racked up payday loan debts for gambling may well have done so using overseas firms. Bringing these firms under Finnish tax and player protection rules may counteract this.
However, opponents may argue the opposite – that the creation of a more liberal gambling market with less state control could drive further proliferation of gambling harm and indebtedness in Finland.
Stakeholders may look to other markets, both new and well established, as examples of what to do and not to do. The topic of financial vulnerability was raised in Brazil recently, for example, where people who receive some state benefits were recently excluded from betting under the country’s new gambling framework, launched this year.
Closer to home, the debate around gambling harm in the UK continues to rage on two years after the government published a review of the country’s gambling legislation. It has often been noted in the UK that gambling addiction comes as a pair or trio with alcohol and/or substance addiction, and all can impact not just the person with the problem but also family and close friends.
“We regularly hear from women who are in debt because they’ve tried to support a partner struggling with substance abuse,” Olli-Matti Korhonen, CEO of Takaisinperintä, told the Helsinki Times.
The prospect of Finnish market liberalisation has been welcomed by gaming stakeholders like the European Gaming and Betting Association (EBGA) while companies both in Finland and overseas have been preparing partnerships in anticipation of market launch.
Policymakers have a lot of factors to consider though – marketing and advertising, player protection and KYC, AML and CTF, and taxation to name a few – and stakeholders will benefit from seeing how reform in other countries has progressed to ensure a smooth transition from monopoly-to-multi-licence.
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