Under Construction: Finland's Lotteries Act

3 February 2009
Daniel Widman and John Eriksson, attorneys with Widman & Hannes Snellman in Mariehamn, Åland Islands, examine the amendments currently under review for Finland's contentious Lotteries Act.

Click here to view their article, "Comments on the Proposed Changes to the Finnish Lotteries Act (2001/1047)," in Microsoft Word format.

Executive Summary

Despite the proposed prohibition against marketing of games connected with special risks for gambling problems, such as casino games, the Government gambling associations may continue to expose their brands and addresses to their internet gambling sites, for instance by offering sponsorship, even after the changes come into force. This demonstrates the inconsistency of the Finnish gambling regulation.

After the changes to the Lotteries Act come in to force, a lottery still may only be arranged by an association whose registered office is in Finland. Therefore, the Finnish gambling regulation may constitute discrimination on grounds of nationality and would hence be prohibited by EC law.

In spite of the fact that the main purpose with the proposed amendments of the Lotteries Act is to prevent social issues and health problems connected to gaming, the Finnish Government has plans to permit one of the Government gambling associations to arrange internet poker which -- according to the proposition -- is one of the games connected with special risks for gambling problems.

After the changes to the Lotteries Act come into force, it will still be a fact that (i) the Finnish Government gambling associations conducts extensive and aggressive marketing measures of their gambling services yearly, (ii) as a result of the new regulations, it will not only be easier for the Government to control the gambling business in Finland, but it will also increase the profit of the Government, since private competitors will be kept from the Finnish market in a more effective way and (iii) the Government’s view that gambling should not lead to profits for private businesses is contradictious, since the sales nets of the Government gambling associations in Finland are run by private entrepreneurs.

The main reasons behind the current -- as well as the proposed Lotteries Act -- seem to be to strengthen the finances of the Finnish Government, rather then protecting the public from the negative consequences gambling may cause, therefore the Finnish Government looses its right to call on social interests of protection as support for the restrictions of the free movements of services in the Lotteries Act.

It is a fact that the reasons of public good, referred to by the Finnish Government, can be fulfilled through other and less intrusive measures, hence the proposed changes to the Lotteries Act, as well as the current Lotteries Act must be considered as violations against Article 49 of the Treaty and the free movement of services.

With regard to recent media occurrences in Finland concerning the proposed changes of the Lotteries Act and the attached submission from the Federation of the Finnish Media Industry, it can be concluded that companies in the Finnish media sector believe that -- after the proposed amendments come into force – all advertisement of gaming services has to stop and all foreign newspapers and magazines which include advertisement of gaming services can no longer be sold in Finland.

In conclusion, the proposed changes of the Lotteries Act strengthen the Finnish state con-trolled gaming monopoly and results in further restrictions of the free movement of ser-vices within the Community. Considering the motives given in the proposition and the fact that the definition of marketing has been expanded, one can make the assumption that the amendment of the prohibition in section 62 of the Lotteries Act will result in that the Finnish authorities -- after the proposed changes come into force -- will take further actions against media and gaming providers that advertise and/or organize gaming ser-vices without a license on the Finnish market.




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