Article written by Antti Koivula, legal advisor at Legal Gaming
On 24 May 2022, the Finnish Supreme Administrative Court delivered its verdict on IS-Liigapörssicase (KHO:2022:60), where the Supreme Court analyzed whether skill-based fantasy sports games are within the scope of the Finnish Lottery Act (1047/2001) (“The Lottery Act”) and thus belongs to the state-owned gambling operator Veikkaus Oy’s (“Veikkaus”) monopoly.
Finland has a statutory gambling monopoly, where Veikkaus has exclusive rights to operate and market gambling. According to the Lottery Act, all games that include an entry fee, winnings of monetary value and the result is based on chance are within Veikkaus’ monopoly. The main question in the case was whether it is enough that the game is even based on chance to be within the scope of the lottery act and thus belong to Veikkau’s monopoly, and if that was the case, whether the element of chance was present. in the skill-based fantasy sports games in question.
IS-Liigapörssi– the case concerned popular fantasy sports games in Finland, where participants form virtual ice hockey teams from real ice hockey players and points are awarded based on the ice hockey players’ performances in real ice hockey games. The fantasy sports games included entry fees and prizes and had been operated since 1995 by a Finnish media giant Sanoma Media Finland Oy (“Sanoma“). It was an undeniable fact that skilled and analytical participants who invested a lot of time in the fantasy sports games outperformed the participants who chose the players randomly.
The background to the case is long, as the national authorities had tried to close the fantasy sports games that Sanoma ran for more than a decade. In 2008, the Ministry of the Interior sent a request for an investigation to the police, who carried out a preliminary investigation. However, in 2010 the National Prosecutor’s Office (“NPA”) made a decision not to prosecute stating that it remained unclear whether the Fantasy Sports games in question are within the scope of the Lottery Act.
In 2017, the gambling authority, the National Police (“NPB”) started administrative proceedings against Sanoma regarding the fantasy sports games and two years later in 2019 the process had reached the point where the NPB imposed a prohibition order and a conditional fine of EUR 300,000 for Sanoma on the basis that Sanoma was not allowed to run fantasy sports games which they qualified as gambling. Sanoma appealed to the Helsinki Administrative Court, claiming that the fantasy sports games in question were games of skill where chance had no effect on the results and thus outside the scope of the Lottery Act, but in 2021 the Helsinki Administrative Court ruled in favor of NPB. Sanoma appealed to the Supreme Court.
The Supreme Court acknowledged that the participants’ knowledge and skills were meaningful in the context of success, but reminded that at the same time random factors beyond the participant’s control had a significant impact. Thus, the chance of winning was at least partly based on luck. Since the fantasy sports games also included entry fees and prize money, only Veikkaus was allowed to operate them in Finland.
The Supreme Court’s decision hardly came as a surprise. The Lottery Act’s definition of gambling is extremely broad, with a good example being that even an ice fishing competition and an auction were previously considered to fall under it. Nevertheless, the decision further strengthened NPB’s authority and it remains to be seen what is the next competition or event that they go after.