FCCA study: Supervision of Veikkaus in need of reform

According to a report by the Finnish Competition and Consumer Authority, the prevention of the negative impacts of gambling will require centred and more effective supervision. Only after this, should it be determined whether Finland’s monopoly system should be dismantled.

The FCCA has examined alternative methods for the organising, regulation and supervision of gambling. The report is the first part of the agency’s more broad-scoped gambling project on which more reports will be published over the autumn. The final report will be published in early 2020.

Nearly every European country has a licencing system or a combination of a licencing system and a monopoly system in place. In addition to Finland, Norway is the only other country in Europe with a comprehensive monopoly for all gambling. According to EU legislation, a gambling monopoly is permitted when it can effectively prevent the negative impacts of gambling. The use of gambling proceeds for the financing of NGO activities is not a sufficient justification for a monopoly.  The EU also requires that gambling monopolies must be supervised effectively, consistently and systematically.

According to the FCCA report, the regulation of Finland’s gambling system does not meet with the requirement for effective supervision. There are numerous different bodies responsible for regulation, and their tasks are in part overlapping. For this reason, their mutual responsibilities are somewhat ambiguous.

“The prevalence of gambling problems is due more to how gambling is regulated than how it is organised. Current gambling regulation must first be centred to one body and made more effective. Only after this should we consider whether there is need to change the system,” states Head of Research Anu Raijas.

It is also problematic with regard to the impartiality of supervision that the beneficiaries of gambling proceeds participate in the regulation of gambling and are responsible for making decisions on gambling policies. It may be more of an incentive for beneficiaries to manage their financing from gambling proceeds than to manage gambling problems and their prevention.

As an example, the FCCA report describes the models used in Denmark and Sweden where regulation has been centred to one actor. The regulators in these two countries also have effective measures in place with which they can verify the lawful operation of gambling companies that operate in their countries.

Finns gamble more than any other nationality in Europe, using an average of 320 euros a year per person. They spend the largest sum of money on slot machines. These can be considered among the most harmful types of gambling because they involve a risk of gambling addiction and gambling problems. Slot machines are also highlighted among customers of Peliklinikka, an association which helps problem gamblers, and in the calls to its telephone helpline Peluuri.

The FCCA report proposes that in addition to the centring of regulation the negative impacts of gambling could be reduced by telling consumers in a clear and concise manner that there is a risk of excessive or uncontrolled gambling related to certain games. In many countries, the availability of those forms of gambling that have been determined harmful has been limited.

More research is also needed for the prevention of gambling problems in areas such as people’s gambling behaviours and the consumption of gambling to gain data on e.g. how gambling is divided between different games and how extensive problematic gambling is.

FCCA’s report (in Finnish)

Further information: Head of Research Anu Raijas, tel.  +358 (0)29 505 3650 and  Specialist Maria Pirilä, tel. +358 29 505 3138, forename.surname@kkv.fi