Channeling effect of a national online : case Finland

11th European Conference on Studies and Policy Issues 2016 InterContinental, Lisbon, Portugal Parallel Session 2 – Regulations and Borders September 16, 2016

RAY, Finland’s Association Anssi Airas, Research Manager, Market Intelligence The main challenge

If we open a national online casino, will there be a channeling effect, so that most, or at least more more of the players will end up playing at the local, well regulated and safer site?

Or are we just opening a Pandora’s box, by creating new online casino players, that will eventually end up playing on the offshore sites?

Anssi Airas | 16.9.2016 2 Finnish gaming scene 2016 Three + one operators with exclusive rights, both land based & online Operator Purpose / Funding Forms of gaming RAY * Supports voluntary public Slot machines Since 1938 health & welfare organisations Casino table games (NGO’s) Casino operations

Veikkaus * Supports Finnish arts, sports, Since 1940 science and youth work (via Scratch cards Finnish Ministry of Education) Fintoto * Promotes horse breeding & Tote betting racing

PAF Supports local NGO’s All forms of gaming on the (on Åland Åland Islands, ferries and Islands only) . Not on mainland.

* Merger by 1.1.2017

Anssi Airas | 16.9.2016 3 Perspective to the Finnish gaming scene – 90 years

Brick-and-mortar 1981 1938 Ray Scratch 1967 Paf cards 1940 Veikkaus 1971 1989 1993 National Gaming Viking Slot Football arcades Lotto machines pools

1969 1982 2012 1991 Public Tote Eurojackpot Casino lotteries betting tables tables lottery

1920 1930 1940 1950 1960 1970 1980 1990 2000 2010

1997 national 2010 Ray Online lottery online online casino 1998 First 2013 Mobile free Ray casino online slot 2014 Live 2000 Paf online casino online games 2015 2000 Mobile eSports lotteries on WAP phones

2001 Online tote betting

2005 eInstants

Anssi Airas | 16.9.2016 4 Finns do gamble Finnish gambling prevalence 2015 among The most popular games are 15-74 years of age • Lotteries 90% • Scratch cards 80% • Slot machines 70% 23,3 % • Daily draw games, e.g. 60% • Sports betting Once a year 50% 10,6 % • Gambling on cruise ships Once a month 40% 12,1 % 2-3 times a month 30% Once a week 20% 25,1 % Several times a week 10% 4,4 % Daily/Almost daily 4,5 % 0%

Source: Anne Salonen & Susanna Raisamo: Finnish gambling 2015, National Institute for Health and Welfare (THL), Report 16/2015 Helsinki 2015. Anssi Airas | 16.9.2016 5 Finns are active slot machine players, bechmarking Europe "When did You last play on a slot machine?" % among adult population

During the past seven days During the past 12 months = the whole pillar

Finland 2013 16 35

Great Britain 2013 4 18

Czech Republic 2013 3 17

Germany 2013 2 15

Spain 2011 2 10

Sweden 2013 0,7 9

Denmark 2013 1 7

Italy 2013 2 6

Norway 2013 0,3 4

0 5 10 15 20 25 30 35 40 Source: Omnibus surveys by Taloustutkimus Oy et al. 6 Finnish survey: Attitudes on gambling 1994-2016 Source & method: Nationally representative face-to-face -interviews on Finns by the Finnish market research company Taloustutkimus • 1000 face-to-face -interviews on Finns eight times a year • Interviews among 15-79 year old population • Sample is nationally representative and is formed by quota sampling (gender, age, area and community) • RAY a customer since 1994  145 rounds so far  Eight rounds a year since 2002 (earlier four rounds per year)  Altogether 145 000 answers so far • More on CAPI-OMNIBUS method: http://www.taloustutkimus.fi/in-english/products_services/omnibus_surveys/ • Similar benchmarking surveys are also carried out e.g. in Sweden, Norway, Denmark, Estonia, Netherlands, Spain, Great Britain, Germany, Italy, Czech Republic and Australia. A sample of unique lenght carried out with an identical method

Anssi Airas | 16.9.2016 7 Share of the Finnish adult population playing online , before and after the launch of the national Ray online casino in 11/2010

"When did you last play slot machines or casino games (e.g. Roulette or Black Jack) in the Internet for real money?", share of adult population, %

3,50% Last 12 months 3,28% 3,00% 3,00% Last week 2,42% 2,39% 2,50% 2,35% 2,22% 2,31% 2,00% 1,50%

1,00% 0,76% 0,72% 0,77% 0,68% 0,56% 0,50% 0,39% 0,50% 0,00% 2009-10 2011 2012 2013 2014 2015 2016/6

N = 7076 8068 8050 8109 8156 8072 4019 Omnibus survey by Taloustutkimus Oy

Anssi Airas | 16.9.2016 8 Benchmarking Nordic countries, regulatory framework

Money transfer IP blocking blocking Current online casino market Finland No No National online casino starting 11/2010 Sweden No No No legal online casinos, national online 2006 Norway No Yes National online casino starting 01/2014 Denmark Yes Yes Online casino licenses since 01/2012

Anssi Airas | 16.9.2016 9 Survey on channeling effect on internet poker in Sweden 2008

New players, at least partly lost offshore 35 000

Old players, at least partly channelled to the national site 55 000

Source: Lennart Gustafsson: Svenska Spels nätpoker En utvärdering, Betänkande av Nätpokerutredningen, Stockholm 03/2008, p. 22.

Anssi Airas | 16.9.2016 10 For further scenarios & thinking:

What would have happened without the opening of a national online casino?

Thank you for your attention. Questions, comments & discussion…

Information and contacts [email protected]

Anssi Airas | 16.9.2016 11