The History of Gambling in Finland
Finland is dismantling one of Europe’s last state gambling monopolies. From 1938 to 2026, betting, slot machines, lotteries and casino games were run by state-linked bodies — Veikkaus, Raha-automaattiyhdistys (RAY) and Fintoto, merged into a single Veikkaus Oy in 2017 — with all profit earmarked for sport, culture, health and horse-racing organisations. A new Gambling Act, confirmed by the President on 16 January 2026, ends that arrangement for betting, online casino games, online slots and online money bingo: private operators can apply for licences from 1 March 2026, and licensed competition begins on 1 July 2027, supervised first by the National Police Board (Poliisihallitus) and then by a new agency, the Lupa- ja valvontavirasto (Licensing and Supervisory Authority). Veikkaus keeps its monopoly on lotteries, scratchcards and physical slot machines and casinos.
Origins: state lotteries and the birth of earmarked gambling
Finland’s modern gambling system did not begin as a single law but as a series of narrow permits granted to specific causes. The first organised money lottery, Raha-arpajaiset, was licensed in 1926 to fund the Finnish National Opera and the Finnish National Theatre — an explicit trade-off in which the state tolerated gambling only because the proceeds went straight to an approved public good. Secondary sources place an earlier general lottery decree (arpajaisasetus) around 1920, though this could not be verified against a primary text during research and should be treated as approximate. What is well documented is that a comprehensive arpajaislaki (Lotteries Act) governing money lotteries was not enacted until 1965, decades after the practice of earmarking had already become the norm.
That norm hardened through the 1930s. In 1938, following a 1937 decree, the state authorised a single body — the Raha-automaattiyhdistys (RAY, the Finnish Slot Machine Association) — to operate coin-operated gaming and casino machines on the Finnish mainland, with profits directed to public health promotion. RAY was built as a membership association of charitable and welfare organisations rather than a commercial firm; war-veteran and child-welfare associations were among its founding members, and its dividend model — channel gambling revenue to vetted civil-society beneficiaries, not to private owners — became the template every later Finnish gambling body would copy. RAY’s monopoly initially covered only machines placed in Finland’s finest hotels and restaurants; a 1946 relaxation, made to raise more revenue, allowed machines into ordinary restaurants and, eventually, retail premises — a decision whose consequences would still be argued over eighty years later.
Sports betting followed a similar, separate path. On 25 July 1940, a founding meeting at Helsinki’s Olympic Stadium brought together three sports federations — Suomen Valtakunnan Urheiluliitto, Työväen Urheiluliitto and Suomen Palloliitto — to launch a fixed-odds football pool company, Oy Tippaustoimisto Ab. Its first product, Vakioveikkaus, launched in September 1940 and reportedly took 140,000 wagered “columns” in its opening round. Within a year the company renamed itself Oy Veikkaustoimisto Ab — Veikkaus — and its profits, like RAY’s, were earmarked for its founders’ cause: Finnish sport.
Horse racing formed the third leg. Totalisator betting on harness racing (toto) dates to Finland’s first toto races on the ice of Helsinki’s Pohjoissatama on 5 February 1928, but the sport’s governing structure only consolidated in 1973, when regional trotting associations merged into Suomen Hippos, the national equestrian federation. Hippos ran totopelit (toto betting) directly until it incorporated the activity as Fintoto Oy in 2001; from 2012, Fintoto handled the sale of all horse-race betting in Finland. Its earmarking beneficiary was, naturally, Finnish horse breeding and equestrian sport.
By the second half of the twentieth century, Finland had arrived at what became known as the “kolmen monopolin malli” — three separate, non-competing monopolies, each legally exclusive in its vertical and each earmarking its profits to civil-society beneficiaries rather than general taxation. That earmarking is the single fact that explains almost everything that follows: it gave sport, culture, science, youth work, health and welfare organisations, and horse breeding a direct financial stake in gambling revenue staying high and domestic, and it gave the monopoly a moral case — “gambling profits fund the common good” — that outlasted its practical justifications.
Slot machines everywhere: the retail ubiquity problem
RAY’s 1946 decision to allow machines beyond luxury hotels set a pattern that lasted into the 2020s: Veikkaus (after the 2017 merger inherited RAY’s machine estate) placed coin-operated slot machines in ordinary supermarkets, kiosks, petrol stations, restaurants and bars across the country, in a density that was unusual by international standards for a country without a liberalised gambling market. Journalistic investigations repeatedly found that machine placement correlated with deprivation: reporting based on Veikkaus’s own location data found that around 39% of the poorest postcode areas hosted a high concentration of machines, against roughly 9% of the wealthiest areas. A citizens’ initiative (kansalaisaloite) calling for the removal of slot machines from shops, kiosks, restaurants and petrol stations gathered public support as the political conversation shifted from treating supermarket slots as a harmless convenience to treating them as a visible, unavoidable temptation with a regressive social footprint. That shift in perception — slot machines as an everyday retail fixture rather than a supervised, opt-in activity — became one of the domestic political pressures behind identification reform and, ultimately, behind the case for opening the market to licensed, better-supervised competition instead of simply expanding the state monopoly’s own machine estate.
2017: one company instead of three
On 1 January 2017, Veikkaus, RAY and Fintoto formally merged into a single company retaining the Veikkaus name, using a transitional holding entity to manage the integration. The stated logic was regulatory and administrative simplicity: a single state-owned operator, responsible for the whole legal Finnish gambling offer — lotteries, sports betting, slot machines, casino games and horse-race betting — was judged easier to regulate, monitor for problem-gambling harm, and hold accountable than three parallel monopolies with separate governance. The merger did not change the underlying earmarking system: Veikkaus Oy’s profits continued to be distributed to the same categories of beneficiary — sport and physical activity, science, the arts, youth work, health and social welfare organisations, and horse breeding and equestrian sport — under the Arpajaislaki (Lotteries Act) framework that governed the merged company until the 2026–2027 reform replaced it.
The EU-law problem: justifying a monopoly under free-movement rules
A state gambling monopoly sits awkwardly with the EU single market’s guarantee of free movement of services, and Finland’s model was tested directly at the Court of Justice of the European Union. In Markku Juhani Läärä, Cotswold Microsystems Ltd and Oy Transatlantic Software Ltd v Kihlakunnansyyttäjä (Jyväskylä) and the Finnish State (Case C-124/97), a private slot-machine operator challenged RAY’s exclusive right to operate gaming machines. On 21 September 1999, the Court ruled that Finland’s restriction on the freedom to provide services could be justified by overriding reasons in the public interest — consumer protection, the prevention of fraud, and limiting the inducement to squander money on gambling — provided the restriction was proportionate and genuinely served those aims rather than simply maximising state revenue.
That “genuinely serves the public interest” test became the monopoly’s long-term vulnerability rather than its guarantee. In 2006 the European Commission opened infringement proceedings against Finland over the cross-border marketing and provision of sports-betting services, questioning whether the Finnish system was applied consistently with the public-interest aims the CJEU had accepted. Finland amended its Lotteries Act in 2010 and 2012 to tighten enforcement against unlicensed marketing and strengthen the link between the monopoly and harm-prevention measures; in November 2013 the Commission closed the case, satisfied the amended law no longer conflicted with EU law. The monopoly survived, but the episode fixed the terms on which it would keep being judged: not whether a monopoly is desirable in principle, but whether this specific monopoly actually reduces gambling harm and protects consumers better than a regulated market would. As Finnish players increasingly gambled with offshore, EU-licensed operators the state could not police, that question became harder to answer convincingly — by 2021 Finland’s own Competition and Consumer Authority (Kilpailu- ja kuluttajavirasto, KKV) had concluded the monopoly was not demonstrably preventing gambling-related harm any better than a licensed market would.
Mandatory identification: closing the anonymous-play loophole
For most of Veikkaus’s history, a player could walk up to a slot machine in a supermarket or kiosk and play anonymously — no way for the operator to track losses, set a spending limit, or intervene when harmful play emerged. Reform came in stages. Identification was technically available on roughly 14,000 of the company’s machines by 2017, and in December 2017 Veikkaus announced a programme toward full identification across its dispersed, retail-located machines. Mandatory ID followed on dispersed retail machines from January 2022 and inside Veikkaus’s own staffed gaming halls from July 2022, with several thousand machines removed from circulation during the changeover (Veikkaus itself cited an initial reduction of around 3,000). From 1 January 2023, identification became mandatory across all Veikkaus gambling — online and land-based alike — under a strengthened Lotteries Act, with scratchcard identification following in 2024. Finland also introduced payment blocking against unlicensed operators from the start of 2023, and had already brought in loss limits for online games back in December 2017.
What the harm data actually shows
Finland’s Institute for Health and Welfare (THL, Terveyden ja hyvinvoinnin laitos) tracks Finnish gambling behaviour and gambling-related harm through periodic population surveys, and its most recent findings, reported in 2024 and covering 2023, describe a genuinely paradoxical trend: gambling participation is falling, while problem gambling is rising. In 2023, an estimated 70% of the mainland Finnish population gambled, down from 78% four years earlier in 2019 — an eight-percentage-point decline. Over the same period, the share of the population at moderate-risk or problem-gambling level rose from 3% in 2019 to 4.2% in 2023, equivalent to just over 150,000 people. The harm is heavily gendered: 6.6% of men were classed at moderate-risk or problem level in 2023, against 1.8% of women. THL’s research also points to a striking concentration of gambling revenue among a small share of players: just over 2% of gamblers are estimated to generate roughly half of all gambling revenue — a figure that has anchored much of the domestic argument that Veikkaus’s commercial incentives and its stated harm-prevention mission pull in opposite directions, since the company’s profitability depends disproportionately on its heaviest-losing customers.
The channelisation problem
“Channelisation” (kanavointi) is the share of a country’s total gambling spend that flows through domestically licensed or state-sanctioned operators, rather than leaking to operators with no Finnish licence — chiefly offshore online casinos, typically licensed elsewhere in the EU or in jurisdictions such as Malta or Curaçao, that Finnish players can reach freely online. Because Veikkaus’s monopoly covered the entire legal market, channelisation and Veikkaus’s own market share were once close to the same number — commonly cited at around 90% a decade or so ago. As unlicensed offshore operators became easier to reach and often more competitive on odds, bonusing and product range, that share fell sharply. Peer-reviewed research published in Frontiers in Sociology in 2024 (Järvinen-Tassopoulos, Marionneau and Egerer) put Veikkaus’s online market share at only around 65% in 2021, and industry and legal commentary tracking the reform cite an online channelisation rate falling to around 50% by 2022 — roughly halving within a decade. Estimates of the resulting financial leakage vary by source and methodology, with figures cited in Finnish policy discussion ranging from roughly €260 million to €470 million lost annually to operators outside the licensed system. The government’s ambition for the 2027 system is to lift channelisation back toward the 85–90% range achieved in Sweden and Denmark.
2021–2023: the political decision to end the monopoly
The shift from “reform the monopoly” to “replace it with licensing” happened in distinct steps rather than a single announcement. The Ministry of the Interior set up a preliminary inquiry project (Esiselvityshanke: kanavointikykyinen rahapelijärjestelmä, SM001:00/2023) to examine alternatives to the monopoly for digital gambling specifically, chaired by economist Harri Sailas with members including Riitta Matilainen of the EHYT harm-prevention unit, Roschier partner Mikko Alkio and Rule of Law Institute director Tuija Brax, backed by a civil-service working group spanning the Ministry of Social Affairs and Health, the Prime Minister’s Office, the Ministry of Economic Affairs and Employment, the Ministry of Finance and the Ministry of the Interior. That preparatory work fed into the main Rahapelijärjestelmähanke (Gambling System Reform Project, SM053:00/2023), which the Ministry of the Interior formally established and which produced the working group draft that became the government’s legislative proposal.
Alongside the licensing question, Finland separately reformed how gambling-funded beneficiaries are paid. From the start of 2024, Veikkaus’s profits stopped being earmarked for specific statutory purposes and were instead paid into the state budget as general revenue; the beneficiary organisations that had previously received a defined share of gambling proceeds now have their funding decided through ordinary state budget preparation instead. To manage the transition, the new funding model set an initial funding level of €990 million for 2024, based on Veikkaus’s long-run average revenue, with a three-year political guarantee intended to protect beneficiaries’ income while the switch to budget-based funding took effect (the funding level was set to fall to roughly €974.9 million by 2026 as veterans’-affairs appropriations wind down). This decoupling was a necessary precondition for the licensing reform: as long as sport, culture, science, youth work, health and welfare organisations depended directly on Veikkaus’s monopoly profits, any move to open the market to competing licensed operators threatened those organisations’ income directly. Severing that link let the government open betting and online casino gambling to competition without simultaneously cutting funding to the civil-society organisations the old system had always claimed to protect.
The new Gambling Act and the 2026–2027 licensing system
Parliament approved the new Gambling Act and a package of amendments to thirteen other laws in December 2025, and the President of the Republic confirmed the legislation on 16 January 2026. The reform does not abolish the state monopoly outright — it splits the Finnish gambling market into a licensed segment and a continuing state-monopoly segment.
Opened to licensed competition from 1 July 2027: betting (vedonlyönti), online casino games, online slot games and online money bingo. Any operator, Finnish or foreign, that obtains a Finnish gambling-game licence will be able to offer these products to Finnish players.
Remaining under Veikkaus’s exclusive licence: lottery-type games including Lotto, scratchcards, and all land-based slot machines and casino operations. Veikkaus’s exclusive licence for these verticals runs for a ten-year term.
The licensing structure created by the Act has three tiers: an exclusive licence (yksinoikeus) held only by Veikkaus, for up to ten years; a gambling-game licence (rahapelitoimilupa) available to any qualifying natural or legal person, for up to five years; and a separate game-software licence (peliohjelmistolupa) for suppliers of the underlying gaming software, also for up to five years — whose own provisions apply only from 1 July 2027 (not January 2027, per the Act’s commencement clause), with licensed operators required to use only software-licensed suppliers from 1 July 2028 (not January 2028).
The timetable is staggered. Provisions governing licence applications and compensation for the exclusive licence took effect on 1 March 2026 — not from the start of the year, per the Act’s own commencement clause (Rahapelilaki 10/2026, Section 106) — and the National Police Board (Poliisihallitus) opened gambling-game licence applications that same day, charging a €29,000 processing fee; within weeks it reported dozens of applications, the large majority from foreign operators. The Police Board supervises gambling until 30 June 2027; from 1 July 2027 the Act fully commences, supervisory authority transfers to a newly created body, the Lupa- ja valvontavirasto (rendered in English as the Licensing and Supervisory Authority or Finnish Supervisory Agency), and licensed betting and online casino operations may legally begin. The game-software licence’s own provisions do not take effect until 1 July 2027 — the same date the rest of the Act fully commences, not ahead of it.
The reform sets a single uniform gambling tax rate of 22% on gambling activities conducted under the new licensing system. Marketing is tightly restricted rather than liberalised alongside licensing: advertising must be “moderate” in volume, scope, visibility and frequency, is restricted to specified channels, and marketing through unlisted channels — explicitly including affiliate marketing and influencer marketing — is prohibited outright. Licensed operators will also be required to implement player identification and age verification, a cross-operator self-exclusion mechanism, gambling-harm monitoring, anti-money-laundering controls and regular reporting to the supervisory authority.
Key dates
| Date | Event |
|---|---|
| 1926 | First organised Finnish money lottery (Raha-arpajaiset) licensed, funding the National Opera and National Theatre |
| 1 April 1938 | Raha-automaattiyhdistys (RAY) founded, given exclusive rights to slot machines and casino games, profits earmarked for public health |
| 25 July 1940 | Founding meeting of Oy Tippaustoimisto Ab (renamed Veikkaus in 1941) at Helsinki’s Olympic Stadium; Vakioveikkaus launches that September |
| 1965 | Finland’s first comprehensive Arpajaislaki (Lotteries Act) enacted |
| 21 September 1999 | CJEU rules in Läärä (C-124/97) that Finland’s slot-machine monopoly can be justified under EU law on public-interest grounds |
| 2001 | Fintoto Oy incorporated to run horse-race totalisator betting for Suomen Hippos |
| 2006–2013 | European Commission infringement proceedings against Finland over gambling monopoly and EU law; closed in November 2013 after Finland amended the Lotteries Act |
| 1 January 2017 | Veikkaus, RAY and Fintoto merge into a single company, Veikkaus Oy |
| January–July 2022 | Mandatory player identification phased in across Veikkaus’s dispersed retail machines and its own gaming halls |
| 1 January 2023 | Mandatory identification extended to all Veikkaus gambling; payment blocking against unlicensed operators begins |
| 2023 (survey year) | THL: 70% of the population gambled; 4.2% at moderate-risk/problem level (~150,000 people) |
| 1 January 2024 | New funding model: Veikkaus profits become general state budget revenue, decoupled from earmarked beneficiary funding |
| 16 January 2026 | President of the Republic confirms the new Gambling Act |
| 1 March 2026 | National Police Board opens gambling-game licence applications (€29,000 fee) |
| 1 July 2027 | New Gambling Act fully enters into force; betting, online casino, online slots and online bingo open to licensed competition; supervision transfers to the Lupa- ja valvontavirasto |
| 1 July 2028 | Licensed operators required to use only game-software-licensed suppliers |
What stays state-run, and what is still to come
Even after the 2027 transition, Finland is not adopting a fully open gambling market. Veikkaus retains exclusive rights to lottery-type games, scratchcards, and every physical slot machine and land-based casino — the retail machine estate that drew the strongest public criticism stays, for now, entirely a state monopoly. What changes is confined to online and remote betting and gaming, where Finland concluded it could no longer credibly claim the monopoly was containing harm better than a supervised licensed market would.
Several elements remain to be tested in practice rather than confirmed on paper. Licence applications opened in March 2026 with strong early interest, chiefly from operators already licensed elsewhere in Europe, but how many licences are ultimately granted, and how quickly Finnish players migrate from unlicensed offshore sites, will not be known until well after the 1 July 2027 start date. The Lupa- ja valvontavirasto has no operating track record as a gambling regulator, only formally taking over from the Police Board on that date. And whether the reform actually lifts channelisation back toward the 85–90% seen in Sweden and Denmark, or whether Finnish-specific factors — Veikkaus’s brand strength, the scope of the advertising restrictions, continued competition from unlicensed sites — hold it below that level, is a question the pre-reform data cannot answer in advance.
Sources
- Veikkaus Group, “Our story” — official corporate history: 1940 founding of Tippaustoimisto/Veikkaus, 1938 founding of RAY, 1973 consolidation of equestrian bodies under Suomen Hippos, and the 1 January 2017 three-way merger.
- Borenius, “Finland’s Gambling Act Reform: A Practical Guide to the New Licensing Regime” (28 May 2026) — Gambling Act (10/2026) commencement dates, licensed verticals, supervisory authority names, application fee, marketing rules.
- Hannes Snellman, “Finland’s Gambling Market Reform — Key Points” — confirmation date of the Act, licensing timetable, three-tier licence structure and durations.
- IMGL Magazine, “Finnish gambling reform – first regulatory steps towards liberalization” — 2006–2013 European Commission infringement timeline, 2021 KKV finding, online channelisation rate near 50% in 2022, reform drafting timeline 2023–2024.
- Case note, Markku Juhani Läärä and Others v Kihlakunnansyyttäjä (Jyväskylä) and Suomen valtio, Case C-124/97, CJEU, 21 September 1999 — judgment date and the accepted public-interest justifications (consumer protection, public order, non-discriminatory application) for Finland’s slot-machine monopoly under EU free-movement law. The judgment itself was subsequently retrieved directly from EUR-Lex (CELEX 61997CJ0124, ECLI:EU:C:1999:435): the Court held that Finland’s exclusive-rights regime for slot machines did not breach the Treaty’s freedom-to-provide-services guarantee, given the public-interest grounds the Court accepted — consumer protection, prevention of crime and fraud, and containing the desire to gamble within controlled, profit-earmarked channels.
- Järvinen-Tassopoulos, J., Marionneau, V. & Egerer, M. (2024), “Strengthening channeling policy: the Finnish approach to protecting domestic online gambling market,” Frontiers in Sociology 8:1272735 — peer-reviewed channelisation figures (89% Veikkaus share 2018, ~65% 2021), estimated €260–470 million annual offshore leakage, 2017–2023 harm-reduction measures.
- Yle, reporting on THL’s 2023 gambling survey findings — 70% participation in 2023 (down from 78% in 2019), 4.2% at moderate-risk/problem level (up from 3% in 2019), 6.6%/1.8% male/female breakdown, ~150,000 people affected, and the finding that just over 2% of gamblers generate about half of all gambling revenue.
- THL (Finnish Institute for Health and Welfare), preliminary findings release on Finnish gambling, 2023 survey — official THL summary corroborating participation and problem-gambling prevalence trends.
- Finnish Government (Valtioneuvosto), press release on the new funding model for gambling-financed activities from 2024 — decoupling of Veikkaus profits from earmarked beneficiary funding, €990 million 2024 funding level, three-year transitional guarantee (accessed via search index; direct fetch blocked to automated tools).
- Finlex, Government proposal GP 16/2025 — “Hallituksen esitys eduskunnalle uutta rahapelijärjestelmää koskevaksi lainsäädännöksi,” the legislative proposal underlying the new Gambling Act.
- Suomen Hippos / Fintoto historical background — 1928 first toto races, 2001 incorporation of Fintoto Oy, 2012 consolidation of horse-race betting sales (cross-checked against Veikkaus Group corporate history).