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Online gambling cutting into domestic monopolies

Finland’s domestic gambling industry pulls in some 1.7 bn euros every year, but international gambling internet sites are growing in popularity. At least right now, there’s not much authorities can do to stop it.

Internet-pelaaminen on helppoa, mutta ulkomailta Suomeen suunnatut pelisivut kuten ovat poliisin mukaan luvattomia. Image: YLE Uutisgrafiikka

Domestic gaming companies Raha-automaattiyhdistys (RAY), Veikkaus and Fintoto were set up as monopolies, and are required to give away profits to charitable organisations. They’re also charged with the promotion of moderate gambling.

Foreign gambling sites have no such restrictions and by using social media and paying Finnish bloggers to help recruit gamblers to these sites, they circumvent current law.

"Many international gambling sites are very aggressive with their direct marketing," Timo Kiiskinen, Senior Vice President of Business Operations at RAY said. “And they make no effort to care for their customers. They can, for example, promise new customers 100 euro bonuses when they register," he said. The foreign companies are making offers that Finnish companies are not allowed to.

"It's clear that often customers will take the best deal when they’re considering gambling," Kiiskinen said.

Foreign online betting companies are forbidden from marketing themselves in Finland, but by using the internet and social media, they’re able to find new customers all the time.

"This causes quite a headache for us, and the authorities should look at the issue more closely," Kiiskinen said.

130 million euros in foreign bets

It's estimated that Finns spend around 130 million euros on foreign betting sites annually, which currently is just a fraction of the legal domestic gambling industry’s yearly revenues of 1.7 billion euros. However, authorities worry that continued aggressive marketing by foreign sites could decrease that disparity.

The Ministry of the Interior’s Legislative Affairs Director Katriina Laitinen said her office is concerned about the increase in foreign online gambling, as well. The ministry is charged with shaping gambling laws, and the growth in the use of foreign gambling sites has not gone unnoticed.

"We're following the developments closely and we’re prepared to change the law if necessary," Laitinen told Yle. "For the time being there are no solid plans to limit international [gambling] sites."

Laitinen said that any eventual law changes should be directed towards the gambling companies and not the gamblers.

"The online gamblers are not committing any crime when they play on foreign sites," Laitinen said.

Finland not alone

Finland is not alone in trying to stem foreign-based internet gambling. Norway and Estonia both tried blocking foreign gambling sites’ IP-addresses, but Jouni Laiho of the National Police Board said such measures are too easy for people to circumvent.

"It's easy to do, by finding a new IP-address," Laiho said. "In theory, site blocking works but in practice it would not stop these companies."

Laiho added that instead of outright blocking sites, a pop-up window with a warning could appear when a person reaches one of the foreign gambling sites. It would be a message that explains that the site is run outside of the Finnish system, he said.

"I doubt that it would have a very big effect for someone who gambles a lot on foreign sites," Laiho said. "But if it's someone who's visiting a site for the first time, it might make them think for a moment."

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