Article written by Antti Koivula, legal counsel consultant at Legal Gaming
On May 24, 2022, the Finnish Supreme Administrative Court delivered its judgment 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 therefore belong to the public gambling operator Veikkaus Oy’s (“Veikkaus“) monopoly.
Finland has implemented a legal gambling monopoly, under which Veikkaus has the exclusive right to operate and market gambling. According to the Lotteries Act, all games that include participation fees, prizes with a monetary value and the outcome of which is based on chance fall within the monopoly of Veikkaus. The main issue in the case was whether it was sufficient for the game to be even remotely based on chance to fall within the scope of the Lotteries Act and thus belong to the Veikkaus monopoly, and whether such was the case, if the element of chance was present in the skill-based fantasy sports games in question.
IS-Liigapörssi-the case concerned fantasy sports games popular in Finland, in which participants formed virtual ice hockey teams from real ice hockey players and points were awarded based on the performance of the ice hockey players ice in real ice hockey games. The fantasy sports games included entry fees and prizes and had been run since 1995 by Finnish media giant Sanoma Media Finland Oy (“Sanoma”). It was an undeniable fact that skillful and analytical participants who invested considerable time in fantasy sports games outperformed participants who picked players at random.
The background to the case is long, as national authorities had been trying to shut down fantasy sports games run by Sanoma for over 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 (“postal code”) issued a non-prosecution decision stating that it was unresolved whether the Fantasy Sports games in question fell within the scope of the Lottery Act.
In 2017, the gambling law enforcement authority, the National Police Board (“NPB”) started administrative proceedings against Sanoma regarding fantasy sports games and two years later in 2019 the proceedings had reached the point where the NPB imposed a restraining order and a conditional fine of EUR 300,000 on Sanoma on the grounds that Sanoma was not licensed to run the fantasy sports games as they qualify as games of chance. Sanoma appealed to the Helsinki Administrative Court arguing that the fantasy sports games in question were games of skill with which chance had no effect on the outcome and therefore outside the scope of lotteries law, but in 2021 the Helsinki Administrative Court ruled in favor of the NPB. Sanoma appealed to the Supreme Administrative Court.
The Supreme Administrative Court recognized that the participants’ knowledge and skills were significant in the context of success, but recalled that at the same time, random factors beyond the control of the participant were also of significant importance. Thus, the chance of winning was at least partially based on luck. As fantasy sports games also included entry fees and prize money, only Veikkaus was allowed to organize them in Finland.
The Supreme Administrative Court’s decision came as no surprise. The definition of gambling in the Lotteries Act is extremely broad, a good example of which is that even an ice fishing competition and an auction were previously considered to fall within this definition. Nonetheless, the decision has further cemented the NPB’s authority and it remains to be seen what is the next competition or event they will go after next.