The Gambling Industries in Sweden and Finland: Some Similarities

Photo: Flickr/Bago Games
Posted 2 months ago in More

Sweden has always exerted profound influence on the gambling industry in Finland. The two countries’ relationship in the 1920’s were tense because of the autonomous Åland islands, but Sweden was inadvertently responsible for the legalization of money lotteries and betting on horse racing by the Finnish government.

In the second decade of the previous century, when gambling was outlawed in Finland, Finnish players travelled to try their luck in games of chance to neighboring Sweden. Swedish football pools then were undoubtedly less sophisticated than today’s land-based casinos in Stockholm, but they still tempted Finns to squander large sums of money on the neighboring territory. The Finnish government was not amused by the flow of markka notes to Sweden and, unable to curb Finns’ enthusiasm for gambling, decided to make lotteries and horse racing legal in Finland.

Finnish gamblers continued losing money but their losses were now beneficial to the Finnish, rather than Swedish, economy. The idea, that by gambling Finns contribute to the growth of the Finnish economy, has firmly been planted in their minds since the inception of its gambling industry in the 1920s.

Going much further back in history, gambling in Sweden was informed not by patriotism but by deference to the country’s monarchs. The first lottery in Stockholm was organized in 1715 to fund the creation of a base plate of the statue of king Gustav II Adolf. This practice quickly took root in Sweden: lotteries were successfully organized there to sponsor various projects and in 1771, the Royal Number Lottery was established by Gustav III. This lottery existed for almost seventy years until it was abolished in 1840 as a morally corrupting pastime. Accustomed to games of chance Swedish gamblers then turned to foreign gambling organizations, selling lotteries and scratch cards in Sweden.

Yet the old habit of raising funds for special events proved to die hard. Before the end of the century, Sweden went back to organizing cash prizes to collect money for various exhibitions and museums. The General Arts and Industry Exhibition in Stockholm, the Baltic Exhibition in 1914, and the Goteborg Exhibition in 1923 were put on thanks to the funds raised with the help of lotteries.

The Nordic Museum also owes its existence to Swedes’ penchant for playing games of luck. The practice of organizing cash prizes was so beneficial to the country that the lottery became fully licensed in 1938. The Swedish government established a state monopoly to operate various lottery games and called the organization Svenska penninglotteriet aktiebolag. The initial capital of Svenska penninglotteriet AB in 1938 was SEK 100,000.

In 1997, Svenska penninglotteriet AB merged with Tipstjanst and formed state-owned gambling company AB Svenska spel. After being given a green light to operate several brick-and-mortar casinos, AB Svenska spel created Casino Cosmopol and opened land-based casinos in Stockholm, Gothenburg, and Malmo.

When the gambling industry moved online, the company started its gambling website, where Swedish gamblers could bet on sports and play poker, bingo, and other lottery games. Although there always were unlicensed foreign websites for Swedish gamblers to enjoy, until 2019, Svenska Spel was the only organization officially allowed to provide gambling in the country.

Last year, however, Sweden renounced the state gambling monopoly and invited to the Swedish gambling market private casino operators. The Swedish Gambling Authority was authorized to approve these operators and started to issue a gambling license to them. Within less than a year, more than 100 foreign companies were legalized in Sweden.

The Finnish gambling industry has had several similar milestones. As is the case in Sweden, it has long been owned by the Finnish government. Until 2017, the gambling industry in Finland was divided into three parts, each of which was operated by a different company. The casino industry was run by the Finnish Slot Machine Association (RAY). Lottery was regulated by Veikkaus. Horse betting was administered by Fintoto.

At the beginning of 2017, the three organizations merged and formed a larger state monopoly called Veikkaus. Now Veikkaus operates land-based casinos across Mainland Finland and local fully licensed gambling websites, a partial list of which can be found on ikasinot.com.

Fully licensed local virtual casinos give strong protection to Finish players. Foreign gambling websites, by contrast, are less secure. The government constantly warns Finns that gambling with them is risky and can potentially lead to large losses. It also forbids foreign operators to advertise their services in Finland. Yet this is the most severe measures that the Finnish government can take against foreign unlicensed websites, since placing bets with them is not forbidden in Finland.

Yet there are some speculations in Finland that soon the Finnish government may block access to foreign gambling websites. Whether these speculations will prove true or not, foreign casino operators meanwhile cordially welcome Finns with a rich depository of games and poker rooms. Finnish players can still easily transmit money to them and enjoy services on their websites, many of which are translated into Finnish language.

As Sweden did a year ago, Finland is now reconsidering its ‘Act on Lotteries’. After the complaint voiced by Finland’s National Institute for Health and Welfare (THL) that people are not required to show their passports when playing on slot machines, the government decided to update its gambling laws. From 2023, gamblers will need to show their IDs to enter casinos or operate slot machines in supermarkets or gas stations. They will also need to open a Veikkaus gaming account.

Some people say, however, that the government should go further than this and, like Sweden, renounce its gambling monopoly. Like Sweden, Finland should let gambling companies operate on a license-base. Only by changing the gambling industry so drastically can the Finnish government guarantee that it will continue benefiting the country and its citizens.

 

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