Finland to Ban Offshore Gambling Deposits to Protect State Online Gaming Monopoly

Finland Flag Against Cloudy SkyThe Finnish government plans to protect their monopoly on online casino gaming by preventing players from making deposits to offshore gambling firms.

It is estimated that some €300 million a year is flowing out of the country to offshore firms and those in the Åland province, and now ministers want to protect the authority that Veikkaus – which owns the exclusive rights to online casino gaming in Finland – has.

Their plan is to ‘block’ money being transferred from Finnish bank accounts to those of foreign gambling brands, with the ultimate aim of keeping domestic players engaged with Veikkaus rather than taking advantage of offers from elsewhere.

What are the Gambling Laws in Finland?

Helsinki Harbour

In essence, there are no gambling laws in Finland, other than a very simple you will bet with Veikkaus (mainland) or PAF, the accepted gambling site of the Åland province.

These are the only sanctioned gambling sites in Finland, and so – in theory at least – all Finnish natives wishing to play roulette, blackjack, slots and the like should do so at one of these state-controlled operators.

In truth, that isn’t necessarily the case, with offshore betting sites and online casinos accepting players from Finland.

Veikkaus and PAF are tremendous sources of revenue for the Finnish government, and the profits generated are typically poured into projects under the banner of arts, culture and sport.

This monopolistic set-up typically goes against the trade rules of the European Union, however the government has so far gotten away with their state controls on gambling.

Why Is the Government Blocking International Money Transfers?

Denied Stamp

The blocking of international money transfers is actually a tactic that has been used by other governments as well, such as Norway.

The premise, in essence, is to shoulder barge foreign competition out of the gambling market by preventing Finnish natives from depositing funds into an offshore betting account. Ministers are also thought to be looking into the legal process behind asking banks to reject the ‘repatriation’ of money from foreign gambling firms, essentially blocking players from withdrawing any winnings made.

Veikkaus is being undercut by many foreign gambling operators, who offer incentives and enticing welcome offers to attract players from Finland and beyond – currently, there is no legal framework in place to prevent this. Ministers are hoping to introduce legislation that would prevent offshore firms from advertising to Finnish players, although that has the feel of the horse already bolting from the stable.

Coronavirus has also hit the group’s profits hard, and now they want to squeeze their rivals out of the market with their ban on international money transfers, which would be implemented no earlier than 2022 according to reports.

Could the Ban Be Circumnavigated?

Online Payment with Gold Card

The thing with the internet is that where there’s a will, there’s usually a way.

When individuals feel that their freedom is being obstructed, or where enticing bonuses and promotions are available elsewhere, they will look to find loopholes in the law – hence the birth of VPN services and the like.

Finnish gamblers could use the cover of VPN to access a foreign gaming site before pushing any winnings through an e-wallet payment system or by using a foreign money transfer service. They could also, in theory, open a bank account in another EU country without restriction.

Reports suggest that the government is aware that a minority of players will try to circumnavigate their rules, but they believe the benefits will outweigh the negatives – especially given the likely hassle to players of accessing offshore money using cloak-and-dagger methods.

Also, the government – who have yet to forecast how much any such legislation would net them per year – believe that their new laws could lay the foundation for IP blocking and other restrictions further down the line.

UIGEA in the United States Highlights Issues in Wait

Dollar Bill Stacks and Smartphone
There has been a similar scenario unfolding in the United States due to the introduction of the Unlawful Internet Gambling Enforcement Act 2006 (UIGEA), which essentially outlawed the vast majority of online gambling options.

The basic tenet of the legislation is that gambling firms are prohibited from ‘…knowingly accepting payments in connection with the participation of another person in a bet or wager that involves the use of the Internet and that is unlawful under any federal or state law.’

But, as the Finnish government may subsequently find out, there is a myriad ways to fund a gambling account without resorting to domestic banks and financial institutions.

The UIGEA did succeed in forcing some major multi-national gambling firms out of the U.S. market, with the downside being that their void was filled by brands that perhaps were not offering the highest standards of service and responsible gaming.

Indeed, in April 2011 there was the extraordinary case of the founders of PokerStars and Full Tilt Poker, who deliberately violated the UIGEA by disguising deposits and withdrawals from gambling accounts by pretending the user was purchasing goods such as jewellery or golf equipment from them.