Finland’s Licensing Reform Creates a New Tax and Compliance Model for Online Casinos

Finland is reforming its online casino market in a move that aims to modernize the market and do away with its current state-run monopoly.

The new system is aimed at creating a competitive market that emphasises player protections as much as it does industry growth. The new system includes tax brackets and compliance requirements.

As of late last year, the Finnish parliament have approved a new iGaming bill that significantly alters the online gambling market in the country.

What has long been a state-run monopoly will instead be replaced by a competitive and regulated market, much as can be seen in many other countries across Europe.

This new system includes not only provisions for the necessary compliance with regulations that license holders must adhere to, but also a new taxation system for online casino operators.

While some are hailing the change to a more competitive online casino market, where Finnish no deposit free spins bonuses are likely to be offered as a matter of course in order for platforms to stand out from each other, others are saying that the change comes almost a decade too late.

The change in Finland is one that can be seen in many other jurisdictions across Europe and the world as a whole, where the regulation of markets seems to be a more effective tool for consumer protection than prohibition.

Let’s take a closer look at what exactly is changing for Finland, how the tax framework will work and what sort of compliance needs operators will be expected to follow.

Monopoly No-More!

The online gambling market in Finland has long been under the sole provision of the state-owned Veikkaus Oy. This betting agency had the exclusive right for the promotion of gambling services in the country.

The original idea was that a substantial amount of the profits from Veikkaus would be put towards works for the public good, and that a monopoly control by the government over gambling activities would reduce the potential for gambling-related harm. This idea did not play out as expected.

As technology around the internet improved, Veikkaus quickly fell behind in its ability to offer innovative and engaging services to consumers. This meant that the habits of players would instead be spend their time and money at offshore platforms that operated without the regulatory oversight of the Finnish government.

This meant that there was both a lack of control and a loss of tax revenue, which compounded over time as more offshore platforms arose and fewer consumers engaged with the state-run Veikkaus platform.

The new system is a response that is intended to fix this problem, and to bring those consumers back under the protection of government regulation, as well as to recoup that tax revenue that is lost to offshore operators.

Operators to Face New Tax Framework

The structure of the tax framework that online gambling operators will need to contend with if they wish to ply their trade in Finland is, according to GamingIntelligence.com, as follows. Licensed B2C operators will have a 22 per cent tax on GGR, as well as an annual fee for supervision, which is calculated on GGR.

The supervision fee will operate on a sliding scale that ranges from €4,000 for smaller operators under €100,000 in annual GGR, all the way up to €434,000 for bigger operators with at least €50 million in GGR.

The goal for the Finnish lawmakers is to create a system that encourages competition, but also provides a tax environment that is sustainable enough that operators are easily able to legally enter the market. This follows the path that several other European jurisdictions have followed, with three aims in mind:

• Ensuring that the government makes a steady stream of revenue.
• Making the market attractive for experienced international operators.
• Allowing operators to enter the market easily makes offshore operations less attractive.

Time will tell if Finland has managed to walk the line correctly.

Modern Compliance Requirements

One of the other keystones of the new online gambling framework in Finland is compliance. Operators who acquire licenses will be expected to meet a set of relatively strict compliance requirements. These include, but are not limited to:

• Incorporating modern responsible gambling tools into platforms, such as self-exclusion and deposit limits.
• Advertising guidelines that strictly limit where, when and who gambling advertising can target.
• Identity verification processes that ensure only of-age individuals are able to access gambling services.
• Adhering to reporting and monitoring obligations issued by the regulatory authority.

The idea is, once again, that consumer protections are at the forefront of the equation.

Final Thoughts

For enthusiasts of online gambling in Finland, a new bright day is dawning, one in which their gambling activities no longer have to be undertaken on offshore platforms far from the regulatory umbrella of consumer protections.

The competitive nature of the new Finnish market is expected to drive innovation and provide innovative games worth players’ time as well as attractive and competitive bonus offers.

The new market is set to launch in the middle of 2027, with operators and regulators expected to continue fine-tuning the regulatory environment until then.