Article written by Antti Koivula, legal advisor at Legal Gaming
On May 24, 2022, the Finnish Supreme Administrative Court ruled on: IS-Liigapörssi– case (KHO:2022:60), in which the Supreme Administrative Court analyzed whether skill-based fantasy sports games fall within the scope of the Finnish Lotteries Act (1047/2001) (“Lotteries Act”) and are thus owned by the state gambling operator Veikkaus Oy’s (“Veikkaus“) Monopoly.
Finland has a legal gambling monopoly, under which Veikkaus has the exclusive rights to operate and market games of chance. According to the Lottery Act, all games that include a participation prize, cash prizes and the result by chance fall under the monopoly of Veikkaus. The main question in the case was whether it is enough to base the game even remotely on chance to fall within the scope of the Lottery Act and thus belong to Veikkaus’ monopoly, and if so, whether the element of chance was present in the skill-based fantasy sports games in question.
IS-LiigapörssiThe case involved popular fantasy sports games in Finland, where participants form virtual ice hockey teams from real ice hockey players and were awarded points based on ice hockey players’ performance in real ice hockey matches. The fantasy sports games include entrance fees and prizes and have been run 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 significant amount of time in the fantasy sports games outperformed participants who chose the players at random.
The background to the case is long, as national authorities had been trying to shut down Sanoma’s fantasy sports games for more than a decade. In 2008, the Ministry of the Interior made a request for investigation to the police, who conducted a preliminary investigation. In 2010, the National Public Prosecution Service (“NPA”) has made a non-follow-up decision stating that it is unresolved whether the concerned Fantasy Sports games fall within the scope of the Lottery Act.
In 2017, the enforcement authority for games of chance, the National Police Council (“NPB”) initiated 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 decision and a conditional fine of EUR 300,000 on Sanoma on the grounds that Sanoma was not allowed to play the fantasy sports games out as they qualified as gambling. Sanoma appealed to the Helsinki Administrative Court arguing that the fantasy sports games in question were games of skill where chance had no influence on the results and thus fell outside the scope of the Lottery Act, but in 2021 the Helsinki Administrative Court ruled in the advantage of the NPB. Sanoma appealed to the Supreme Administrative Court.
The Supreme Court recognized that the participants’ knowledge and skills were meaningful in the context of success, but recalled that at the same time, random factors beyond the participant’s control were also very important. So the odds of winning were at least partly based on luck. Since the fantasy sports games also include entrance fees and prize money, only Veikkaus was allowed to perform them in Finland.
The decision of the Supreme Administrative Court hardly came as a surprise. The definition of games of chance in the Lottery Act is very broad, a good example of which is that in the past it even included an ice fishing competition and an auction. Nevertheless, the decision has further bolstered the authority of the NPB and it remains to be seen what the next match or event they will go after.