Major changes coming to the gambling market in Finland

Finland is among the European countries with the strictest gambling regulations. Currently, the sector is operated by a state-owned gambling giant, Veikkaus, which holds a monopoly. However, that monopoly is planned to break soon, bringing meaningful changes to the market and opening it to new commercial gambling operators.

Gambling revenue steadily declines year after year

Veikkaus started operating on January 1, 2017, and it follows the merger of three gambling companies in Finland, Veikkaus, Fintoto and the Slot Machine Association (RAY). Holding exclusive rights over the operation of digital and retail gambling in Finland, the state-owned monopoly saw its revenue soar in the years that followed.

In 2019, Veikkaus reported €1.69bn in total gaming revenue. Some €1.15bn, or the lion's share of the revenue, came from retail sales, while the digital channel was responsible for €537m in revenue. Five years later, in 2024, the total gaming revenue decreased significantly to €959.1m.

The gross gaming revenue reported by Veikkaus for last year represented a 7.2% decrease year-over-year. The result marked another dip in an ongoing downward trend. Undoubtedly, the impact of the illegal gambling sector contributed and will continue to contribute to the decline in revenue.

Market changes result in a dip in revenue, but the impact of offshore gambling operators is significant

Publishing its 2024 gaming revenue report earlier this year, Veikkaus acknowledged the decrease in revenue. The state-owned gambling monopoly attributed the year-over-year dip in revenue to changes to the market, including the authentication checks for ticket-based games and the fact that 2024 was the first full year with the aforementioned measure.

The gambling monopoly further explained: "the gross gaming revenue of physical slot machines decreased due to changes in point-of-sale networks. General changes in consumer behavior and decreases in purchasing power also had an impact on Veikkaus’ business. In addition, the launches of several new games were delayed due to slower than expected progress in official permit processes."

Besides those factors, Veikkaus highlighted its ongoing competition with gambling operators offering their services to Finnish customers from other countries. Referred to as offshore operators, the state-owned monopoly estimated that, based on H2 Gambling Capital data, the share of offshore gambling operators in 2024 was more than €550m. A comparison between the €550m that goes to offshore gambling operators and the €959.1m in revenue reported by Veikkaus shows the scale of the illegal gambling vertical.

According to a breakdown provided by the Finnish gambling monopoly, the share of gross gaming revenue from the digital channel, like Veikkaus Casino, for example, in 2024 was 60.2%, while retail points of sale contributed 39.8%. A year-over-year comparison in the digital channel revenue share points to a 5.4% increase.

However, Veikkaus estimated that based on H2 Gambling Capital data, in 2024, it was responsible for "approximately half of the total digital money gaming market in Finland." This otherwise means that the other half of the market is in the hands of unregulated, offshore gambling operators that do not pay taxes, adhere to the established regulations and are in fact in competition with Veikkaus.

In the context of the impact of the black market on the regulated sector in Finland, Casino Guru's Head of Casino Research, Matej Novota, said:
As Veikkaus’s financial reports reveal a growing strength in Finland’s black market, this juncture offers regulators not a reason for hesitation, but a mandate for bold regulatory reform. The surge in offshore activity underscores the urgency of moving beyond the monopoly model. Finland’s regulator should look to neighboring systems such as:

• Denmark, which achieved over 90% channelisation through its multi-license framework;
• The UK, where a statutory levy—mandated for all licensed operators—earmarks around £100m annually for independent research, prevention and treatment of gambling harm;
• Sweden, where a licensing system prioritized enforcement and player protection.

By blending the most effective enforcement protocols, taxation mechanisms, and harm‑prevention funding structures from these frameworks, Finland can redesign its market into a regulated, competitive ecosystem that channels users away from unregulated and potentially harmful alternatives. - Matej Novota, Head of Casino Research at Casino Guru

Despite the strict regulations, many Finnish gamblers use the services of offshore operators.

The share of offshore gambling operators may be greater than Veikkaus' estimate

Based on the recent data, the share of offshore gambling operators in the iGaming vertical across Finland is significant. While Veikkaus estimates it at €550m, one former executive of the gambling monopoly has a different opinion.

In a post on LinkedIn, Jari Vähänen, a former executive at Veikkaus who held different senior-level positions, including the role of Vice President, New Business and Senior Vice President, International Affairs until April 2020, the size of the offshore gambling sector is significantly larger.

Per Vähänen's estimate approximately €900m goes to offshore gambling operators, a figure that is close to the revenue posted by Veikkaus for 2024. "According to my estimate, it is around €900m euros. This gives a very different estimate of market shares and the channelization rate of the gambling system. I would argue that our estimate is much closer to reality," Vähänen wrote earlier this year.

Moreover, the executive pointed to the decreasing revenue of the gambling monopoly, highlighting that six years ago, Veikkaus posted revenue of approximately €1.8bn. Analyzing the latest results, Vähänen outlined that a notable decrease of 45% in revenue was observed.

Veikkaus is optimistic about the upcoming changes to the gambling vertical in Finland

Despite the dip in results and ongoing competition with offshore gambling operators, Veikkaus is optimistic about the upcoming change to the gambling market in Finland.

By 2027, the country is set to liberalize its gambling sector, a reform that has been long under debate and only recently gained significant traction with a green light from lawmakers. As a result, Veikkaus' monopoly is going to be dismantled at the end of 2026.

Next year is going to be pivotal for gambling operators that are interested in obtaining a license in Finland and will have an opportunity to submit their bids. While Finland is finally on the path to breaking the gambling monopoly model, it is worth noting that strict marketing and advertising rules are going to be in place.

At the same time, enhanced monitoring and player protection measures that seek to prevent and reduce gambling harm are expected to safeguard consumers. All those efforts are expected to improve the taxes collected from gambling, while addressing potential cases of gambling harm.

Channelization to the regulated gambling sector is also expected to improve. Veikkaus has already begun investing in new strategies and improvements that seek to ensure its success in the future gambling vertical in Finland.

Regina Sippel, Veikkaus' CFO, said on the topic: "The reform of the gambling system is a great opportunity for Veikkaus, and we have done long-term work to prepare for the future. In 2024, as planned, we implemented the Veikkaus strategy and invested in both business development and international growth." Moreover, the executive pointed out: "We want to continuously develop, driven by our new mission 'We passionately drive better gaming'."

It is worth noting that while Finland will somewhat break its gambling monopoly model, Veikkaus is going to retain exclusivity over certain activities. For example, the state-owned gambling operator will continue to exclusively offer lottery and scratch card tickets, as well as slots. This otherwise means that the only major change will affect the digital gambling channel.

Matej Novota, Casino Guru's Head of Casino Research, spoke about the future of the gambling sector in Finland: I believe no model is perfect, but Finland now has a unique opportunity to construct something robust by drawing on elements from several successful systems. While the existing frameworks in Denmark, Sweden, and the UK each have their limitations, they also offer proven mechanisms worth adapting.

By selectively integrating the most effective enforcement tools, licensing structures, and harm‑prevention strategies used in these neighboring countries, Finland can design a tailored regulatory model that combines the strengths of each system. - Matej Novota, Head of Casino Research at Casino Guru

The clock is ticking on the overhaul of the gambling industry in Finland

It is clear that offshore gambling currently impacts the Finnish gambling monopoly. While change is imminent, it is yet to be seen how the overhaul of the market is going to affect it and whether or not it will improve channelization.

Still, the goal of opening the market and encouraging competition is expected to make the legal sector more attractive. This, in turn, can benefit consumers who can access enhanced player protection tools and address concerns that they may have with licensed gambling operators, something that isn't available when gambling with offshore companies.

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