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Gambling taxes and law in Finland

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The rules relating to fees are set by law on taxes in the lottery, (lotteriskattelagen 26.2.1992 / 552) Articles 2 and 4. These sections apply to:

– Lotteries: the tax rate is 9.5% of earnings.
– Casino games: the tax rate is 8.25% gains.
– Gaming machines which access is proposed off the casinos: the tax rate is 8.25% yield.
– Paris: the tax rate is 9.5% of earnings.
– Bingo: the tax rate is 5% of the total value of prize money.
– Digital gambling services: the tax rate is 30% of the total value of prize money.
– Sales promotional gambling: the tax rate is 30% of total value of prize money.
– Games organized in the framework of charitable activities (for games that have not already been mentioned): the tax rate is 1.5% yield of the lottery.

There are also other samples. The company RAY (Raha-automaattiyhdistys) and pay 8.25% tax on lotteries and it organizes all its profits are redistributed according to the terms set by the State for the benefit of organizations responsible for the protection of health, social welfare and those in charge of the rehabilitation of war veterans. In 2004, RAY has distributed 73.8% of its total revenues games. ) Information issued by RAY in response to the questionnaire sent by the ISDC.) Veikkaus Oy, however, pay 9.5% tax and all its profits (The Federation of Finnish sport, in a reply to the questionnaire sent by the SICL, said that income is vital to the existence of the organization.) are donated to the Ministry of education, which in turn distributes the money to the benefit of physical education, science, arts and youth work. (Government Decree on accountability for gains from the gaming industry (1436/2001)) In 2004, this figure corresponded to 376 million euros. (Information supplied by Veikkaus Oy answer the questionnaire sent by the ISDC.)

Fintoto Oy pay 9.5% tax and pays about 4% of its turnover (According to information issued by the Ministry of the Interior, this figure amounted to € 7 million in 2004) to Ministry of agriculture and forestry which, in turn, redistributes this money for the benefit of horse breeding and equestrian sport. All proceeds from Fintoto Oy are distributed (see the Act 1054/2001 the use of lottery revenues and paris.) In favor of trotting as prizes. (Information supplied by Suomen Hippos RY and Fintoto Oy in response to the questionnaire sent by the ISDC. Suomen Hippos also stresses that the equestrian industry is totally dependent on income generated from this financing system.) In 2004, Fintoto Oy distributed 27.4 million euros. (Information supplied by the Ministry of Interior in response to the questionnaire sent by the ISDC.)

In addition RAY, Veikkaus Oy and Oy Fintoto funding costs driven by regulation games for the Ministries of Interior, Social Affairs and Health (games-related research, salaries of civil servants in charge of market surveillance etc.). (Information supplied by the Ministry of Interior in response to the questionnaire sent by the ISDC; Article 46 of the Law on Lotteries’ games operators must reimburse the State the costs of the supervision of gaming activities (…) “; Article 52 of the law on lotteries:” problems caused by participating in lotteries shall be monitored and studied this control activity and study is the responsibility of the Ministry of social Affairs and. health. game operators must reimburse the state for costs incurred for the activities referred to in paragraph (…) “.)

LISTING

ENACTED LEGISLATION

General

– Law of 20 January 1978 on consumer protection (20.1.1978 / 38) (Konsuentskyddslag)
– Act of 26 June 1992 on taxes on lotteries (26.6.1992 / 552) (Lotteriskattelag) Article 85 amended in 2005 (20.5.2005 / 334)
– Law of 1998 on the prevention of money laundering and the information and investigation procedure regarding suspicious transactions (1998-1968) (Lag om förhindrande och av Utredning penningtvätt)
– Act of 23 November 2001 on lotteries (23.11.2001 / 1047) (Lotterilag)
– Act 1054/2001 the use of lottery revenues and paris (Lag om användning avkastningen av och av penninglotterier samt tippnings- vadhållningsspel)
– Act 1055/2001 the use of Toto income to the promotion of equine breeding (Lag om användning av avkastningen totospel av och för främjande av hästuppfödning hästsport)
– Act 1056/2001 revenue use robots for the benefit of non-profit organizations (Lag om penningautomatunderstöd)
– Government Decree on accountability for gains from the gaming industry (1436/2001) (förordning om Statsrådets redovisningen avkastningen av av penninglotteri-, tippnings, -OCH vadhållningsspel)
– Ordinance under the Lotteries Act of 20 December 2001 (20.12.2001 / 1345) (förordning om Statsrådets lotterier)
– Ordinance of the Government of the Federation of money PLC (1169/2001) (förordning om Statsrådets Penningautomatföreningen)
– Ordinance of the Government on how to recognize turnovers in the lottery (1174/2001) (förordning om Statsrådet räkneverk för kontroll av penningrörelsen)
– Government Decree on the use of revenues Toto games to promote the sport and the creation of a delegation of the equestrian economy (1476/2001) (Statsrådets förordning om och hästhushållningsdelegationen användning avkastningen av av av totospel för främjande hästuppfödning och hästsport)
– Social Affairs Ministry Decree and the relative health reimbursement of expenses incurred for research and the treatment of gambling addiction (381/2002) (Social- och för hälsovårdsministeriets förordning om ersättning kostnaderna för och av uppföljningen forskningen fring spelberoende)
– Decree of the Ministry of Interior on the cost of police operations (1254/2004) (förordning om Inrikesministeriets polisens avgiftsbelagda prestationer)
– Government Decree on the remuneration paid to obtain a license (3/2005) (Statsrådets förordning om och om avgifter för penningspeltillstånd storleken av avgifterna)
– Guidelines of the Consumer Ombudsman.
– License to organize games for Veikkaus Oy – license change June 16, 2004.
– Penal Code, section 16 and 16 a. (Brottsbalken)
The special case of Aland Island
– Provincial Lotteries Act (1966: 10) (Ålands Lagslamling)
– Order establishing the federation of associations ideal goal of the province (1993: 56) (Förordning om i underrätternas domkretsar ärenden som gäller företagssanering)

BARRIERS

Panorama

General

There are no relevant provisions in this respect.

Lotteries

The Law of 23.11.2001 on lotteries gives a very broad definition of what is meant by “lottery”: this is any activity during which participants can win a prize of monetary value and for participation in which they must make a financial contribution provided that the allocation mechanism is based on chance (Article 2).

The law distinguishes two types of lotteries and submit it to different regimes. It is first of all the constituent lotteries of “gambling activities” (gaming activities) it defines as those during which players can win money (Article 4). It then provides specific provisions for lotteries not involving cash prizes (Chapter 5).

Section 11 of the Act provides that the organization of the first is only possible on the condition of having obtained a valid license from the government for five years (Article 11). This restriction is justified in law by the need to ‘prevent abuse and criminal activity and reduce social problems resulting from gambling activity “guaranteeing legal protection to players (article 11). The licenses are exclusive and can be granted separately for three sets of groups: the first group includes lotteries, paris and jackpots, the second group includes the provision of slot machines, activities and casino games, the third includes games by totalizing (Article 11). Only one license may be granted for each category of games. The licenses were granted to date respectively to three organizations controlled by the state: Veikkaus Oy, RAY and Fintoto Oy (Statistics provided by RAY and carried out by Marketing Radar’s (http://www.radar.fi/english/. index.html) show that the Finnish population is in favor of maintaining the monopoly RAY (in 2003, 73 to 75% of the population was in favor). 70% of the population also believes that maintaining this monopoly is necessary to prevent addictive behaviors and access to games minors. Finally, it seems in the light of the statistics provided that the Finnish population appreciates RAY and Veikkaus Oy for the social dimension of their business.)

The 1998 law on prevention of money laundering and the information and investigation procedure regarding suspicious transactions (Act on Preventing and Clearing Money Laundering 68/1998) provides that operators of the constituent lotteries ” gambling activities “are subject to an information obligation (Article 3). If they suspect that an operation is to launder money, they must immediately inform the public agency responsible for the supervision of such operations (the “Clearing House”) (Article 10). In any case, these operators must establish the identity of their customers if they use the services offered by a casino or they place more than 3,000 euros in one or more operations which are related to the opportunity and jackpots paris paris or through totalizing (Article 6). This control is implemented to prevent money laundering and terrorist financing. It also aims to develop the detection, tracking and recovery of the proceeds of crime (Article 1). (For information: in 2004, the “Clearing House” received 1061 reports on suspicious transactions for a total amount of 12,656,000 euros.)

Lotteries not involving cash prizes are also subject to the granting of a license (under reserve however lotteries where the combination of ticket prices and prizes awarded does not exceed 2000 euros and for which the payment of tickets and distribution of prizes are held simultaneous way (small lottery) (section 27).) (section 25 of the lotteries Act of 23.11.2001). The licenses are not granted nationally by the Government but by the local district police. Lotteries are organized in several districts are authorized by a license from the Office of the Province of the place of registration of the organizing institution of the lottery. The licenses for these lotteries may be granted for a period exceeding six months. The licenses are not limited in number. 144 licenses were issued in 2004. (The information was issued by the Ministry of the Interior in response to the questionnaire sent by the ISDC.)

In both cases (involving lotteries or not in game cash prizes), licenses may be granted only if the lotteries satisfy the following conditions (Article 7):

– They must be held to raise funds for charitable activities or other non-profit activities;
– The organization should not be manifestly contrary to the public interest;
– The licensing authority must not have reasonable doubts as to whether the license applicant may violate the provisions relating to games if the license was granted.

The charter of Veikkaus Oy on its responsibility towards society (document provided by the Interior Ministry on the occasion of his comments on the draft report, May 22, 2006.) states that its objective is to reach a significant number of consumers relying reasonable stakes so that their practice is not detrimental to their financial capacity. It also indicates that Veikkaus Oy develops its offer in a responsible manner, which includes respect for restrictions on access to the games. Young people under 15 should thus not be allowed to buy games in stores and those under 18 years should not be able to play online. The stakes wagered and game consumption allowed per day is limited. It should not be possible either to play or credit to play at night. The game offers and cease to 22 hours. Veikkaus Oy develops an assessment model of gaming activities for all the new games and their distribution methods. Veikkaus Oy fight against addictive game. The operator provides information on the issue in its sales offices and on its website; it ensures that its personnel are aware of the issue and is able to direct those involved to institutions that can help them. As such, Veikkaus is involved in developing Peluuri helpline that offers assistance to problem gamblers and their families and friends. Veikkaus Oy marketing policy is governed by a strict code of ethics. Oy Veikkaus requires its partners to respect its social responsibility charter.

The law applies not only to lotteries with no extraneous element but also (Article 2):

– Lotteries organized abroad insofar as the tickets are sold or distributed n Finland;
– Lotteries organized in Åland to the extent where tickets are sold or distributed elsewhere in Finland. The Supreme Court issued February 25, 2005 (KKO: 2005: 27) on the interpretation of that provision. She decided that it was legitimate to impose a criminal sanction against an operator with a license from the Government of Åland (PAF) which organized a broad campaign to promote its online games on the whole territory. It considered that the measures taken by the operator for easy access to the games and promote them as they were constituted to organize a lottery in the sense of Article 2 of the law. She also said that the argument that Article 2 would be contrary to the free movement of services organized by Community law was not admissible since the European Court of Justice had already considered in the past the system Finnish and affirmed its compliance with EU requirements.

– The dispute between the Finnish Ministry of the Interior and PAF has continued following the judgment. PAF has substantially adjusted its gambling services online. (Information from the comments submitted by PAF following consultation of the preliminary report.) PAF particularly ceased its marketing practices intended to take shares in the continental Finnish market. August 18, 2005, the Finnish Chancellor of Justice has also issued an opinion, after being seized by the Finnish Ministry of the Interior, stating that “PAF internet lottery services do not violate the law lotteries “. The Ministry of Interior continues nonetheless to invoke the PAF online gaming offers constitute a breach of the Finnish Lotteries Act. (For details of the exchanges between the Finnish Ministry of the Interior and PAF, see annex, PAF comments following the consultation of the Interim Report.) He cites the judgment of the Supreme Court must be understood to imply that the games line should be considered held in the place where the player is located. It follows that any participation by it in any game outside line from the mainland Finland must be regarded as participation in a game organized in Finland.

PAF calls this interpretation of the law on lotteries extremely wide and stresses that it is impossible for an operator to control where participating players in online games are. (Information from the comments submitted by PAF following consultation of the preliminary report.) According to PAF, the Finnish State requires of Finnish operators (i) they do not sell their games online in Finland and (ii) that they prevent Finnish players to participate in their games (ii); for example (iii) by closing their player accounts. (Information from the comments submitted by PAF following consultation of the preliminary report.)

Article 5 specifies that only an association, foundation or organization that provides a non-profit activity and registered in Finland can organize a lottery.

The legality of the Finnish oligopolistic system under Community law is currently being discussed. The Supreme Administrative Court has been seized by Ladbrokes Oy which saw its application for a license to organize games released by the Finnish Government. In a decision of 10 June 2005, it decided to refer Ladbrokes Oy to the Government for this new installment in demand but this time motivating its decision under Community law. (Judgment of the Supreme Administrative Court on 10 June 2005 (Högsta förvaltningsdomstolen – HFD 2005: 37)) The Court has noted that the Government has merely justified its decision under Finnish law. In this case, community, in particular with regard to the Gambelli case (C-243/01). The Court also called on the Government to seek the opinion of Veikkaus, RAY and Fintoto. It has by cons not taken a position on the substantive issue ie the Finnish system compliance with Community law.

Section 62 of the Act of 23.11.2001 provides for the organization of a lottery without a license is prohibited. Moreover, it prohibits Finnish operators do not justify a Finnish license to intervene on the markets of other countries, unless they allow. It thus poses a symbolic principle of prohibition of gambling, even though they would be headed overseas.

Section 63 provides that violations of the lottery legislation is a criminal offense. The nature and speed of the offense described in the Penal Code.

Article 16a of Chapter 17 of the Penal Code criminalizes organizing a lottery without license and the use of lottery profits for a purpose different from that provided by the license. The author liable to a fine or imprisonment up to six months in prison.

Casino Gaming

The casino games are considered lotteries belonging to the category of “gambling activities” and therefore subject to the provisions relating thereto set out in paragraph 2 (see Article 11 of the Law of 23.11.2001 on lotteries).

Machine Gambling Outside Casinos

The machines offering games outside the casinos are considered the carriers of a lottery belonging to the category of “gambling activities”; their operation is also subject to the provisions applicable to the constituent lotteries of “gambling activities” presented in section 2 (see Article 11 of the Law of 23.11.2001 on lotteries).

The Lotteries Act is organizing a special system for machines distributing lots and not money. It provides for a special license for this type of machines. This is a license for a period of one year by the District Police (Article 38). It is granted on the same terms as those common to both types of lotteries distinguished by law (see point 2).

The internal regulation of the Finnish operator of slot machines, Ray provides that it should not set its economic objectives so that it would be necessary to increase the supply of games and incitement to participate games to achieve (Comments from the Finnish Ministry of the Interior on the preliminary report, 22 May 2006, p. 5.). Once the game offer is already relatively high current, increased celleci probably lead to a parallel increase in related social risks (Comments from the Finnish Ministry of the Interior on the preliminary report, 22 May 2006 p. 5.). The objectives of annual revenues Ray are established in consideration of the need for a reasoned political games. This is calculated with the following data: (Comments from the Finnish Ministry of the Interior on the preliminary report, 22 May 2006, p 5).

– The study of the volume of participation in the games in consideration of purchasing power;
– Changes in terms of total number of players;
– The information resulting from research on the acceptability of the games;
– Gaming sector development as a whole;
– Ray development of products and their distribution.

The economic objectives of Ray are fixed on the assessment of the risk factors before it and with respect to the analysis of the respective weight of the different solutions. For example, if the total number of players has declined but that revenues games remain the same, we can deduce that the games consumption is concentrated in the hands of the remaining players. If, at the same time, game consumption in usually less accrued sectors has not increased, it can be deduced that the risk of excessive gaming practices has increased accordingly. (Comments from the Finnish Ministry of the Interior on the preliminary report, 22 May 2006, p. 5.)

Betting

The paris are also described as “gambling activities”; provisions relating thereto set out in Section 2 are applicable to paris (see Article 11 of the Law of 23.11.2001 on lotteries).

Bingo

Bingo is a lottery organized in an authorized place for this activity and during which the winners are those who indicated their participation card (paper or electronic) numbers chosen by lottery. The prize at stake in the form of goods or service. The cash prizes are excluded (Article 3 of 23.11.2001 of the Law on Lotteries).

Organizing a bingo is possible only if authorized by a license granted by the District Police spring from where is organized bingo (Article 32 of the Law of 23.11.2001 on lotteries). The license is granted for a maximum period of two years.

Between 2002 and 2003, 206 bingo licenses were awarded. This includes bingo organized an ad hoc basis and organized bingos more permanently. (Information provided by the Ministry of the Interior.)

The license to organize a bingo may be granted, as is the case for lotteries, as requirements of section 7 of the Act of 23.11.2001 (reference under Section 33):

– Bingo should be organized to raise funds for charitable activities or other non-profit activities;
– The organization should not be manifestly contrary to the public interest;
– The licensing authority must not have reasonable doubts as to whether the license applicant may violate the provisions relating to games if the license was granted.

Bingo is a lottery within the meaning of the Act of 23.11.2001; the license is also required if the bingo is held abroad but the tickets are sold or made available in Finland or if bingo is organized in Åland but the tickets are sold or made available in elsewhere in Finland (Article 2). The provisions of the Criminal Code set out in Section 2 are equally applicable.

Media Gambling Services

The media can organize lotteries within the meaning of the Act of 23.11.2001. (See above, introduction.) They can organize games against not submitting participation in payment of a sum of money. (Information provided by the Ministry of the Interior.)

Sales Promotional Gambling

The principle in Finland is that gambling can only be organized to fund a charitable or non-profit activity. (Information provided by the Ministry of the Interior.) The Law on Consumer Protection 1978 provides that it is prohibited to require in exchange for participation in a game of chance, the payment of a sum of money, the purchase of a product or an offer (chapter 2, Article 5).

Charity Gambling

The principle in Finland is that games can only be organized to fund a charitable or non-profit activity. ((Information provided by the Ministry of the Interior.))

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