Version: 25022003
Editor: Franka Pals
Publisher: Novamedia
Disclaimer: Novamedia disclaims all liability for information provided within the ”Novamedia European Gaming and Lottery Files”.The information is supplied by independent journalistic sources. No parts of these files may be reproduced in any form by print, photo print, microfilm or otherwise, or re-distributed electronically in any form without written permission from the publisher.
The Republic of Finland is a country with about 5 million inhabitants and an economic global success story. The blue-cross flagship is, of course, the mobile phone manufacturer Nokia.
Nokia accounts for 20 percent of Finnish exports. Finland leads the world in the number of cellular phone subscribers per capita. Finnish mobile phone ownership exceeded 75 percent of the population in summer 2001, setting a new world record, according to figures issued by the Finnish Ministry of Transport and Communications. In July 2001 there were 3.9 million cellular phones in use in the homeland of mobile phone maker Nokia.
On May 2nd, 2002 the Ministry of Transport and Communications of Finland declared that three new national digital television programme licences were open for applications. The licences will be primarily granted to theme channels that are of interest to the general public. The Ministry hopes that the programme licences would attract international interest.
Three licences for television networks and two licences for radio networks will also become open for application. By granting these licences the Ministry wants to promote competition.The fourth licence for digital television network will not at present be opened for application. It is reserved for future needs of data transmission that will be influenced, among other things, by the convergence of telecommunications and digital television technologies.
Finland, a European Union member, has a strategic location, bridging eastern and western markets in northern Europe. About 3,000 foreign companies are based in Finland, 2,500 of them around the capital Helsinki.
From January 1, 2002 Finland has introduced the Euro as its monetary unit, together with Austria, Belgium, France, Germany, Greece, Ireland, Italy, Portugal, Luxembourg, the Netherlands, and Spain, creating a one-currency market of 292 million people (larger than the United States).
Helsinki Exchanges (www.hexgroup.com) is owned by the HEX Group. Currently, the HEX Group consists of the parent company HEX Plc and its six subsidiaries. The HEX Group, however, operates through its six business areas: Issuer Services, Trading, Settlement and Depository, Securities Services, the Group´s market information services provider eHEX and Baltic Operations.
The economy declined in 2001. Following a period of strong and sustained growth, overall production increased by no more than 0.7 per cent. Forecasts for the present year predict an increase of 11/2 per cent.
The Åland Islands are a group of more than 6,500 islands in the eastern part of the Baltic Sea between Sweden and Finland, east of Stockholm. The total area is about 1500 sq. km and there are approximately 26,000 inhabitants. Their official language is Swedish. Although the islands have a certain form of autonomy, they still form a province in Finland.
For centuries the Åland Islands belonged to the crown of Sweden, as was the case with Finland as a whole. Finland and the Åland islands came in the possession of Russia in 1809. During the Chrimean War (18531856) the islands of Åland were of great strategical importance for Russia, but after this the islands were demilitarised. To quiet a strong movement on the islands for Sweden, the islands got a form of autonomy, but the Finnish sovereignty over the islands was confirmed in 1921 by a decision of the League of Nations. In 1951 the autonomy of the islands was renounced by the Finnish parliament, but the inhabitants got special rights, including their own flag. Since 1984 the Islands have their own postage stamps. And since April 2001, the islands have their own Internet gambling site: www.paf.fi. The gaming company PAF was, however, established as early as 1967.
| Population: | 5,183,545 (July 2002 est.) |
|---|---|
| Age Structure | Age structure: 0-14 years: 17.9% (male 471,920; female 454,082) |
| Currency: | Euro 1 Euro (EUR) = 1.08 US Dollar (USD) 1 US Dollar (USD) = 0.93 Euro (EUR) (20.02.2003) |
| GPD | 114,002 million Euro purchasing power parity – $133.5 billion (2001 est.) GDP – real growth rate: 0.6% (2001 est.) GDP – per capita: purchasing power parity – $25,800 (2001 est.) (Statistics Finland) |
| Internet: | *Year 2001: 45% of total population |
| Telephones | 3,909,000 mobile phones (est. April 2001) |
In Finland gambling and lotteries are illegal to operate for private purposes. Only the government can permit a license, and only one license is valid at a time for each type of 'gaming.' At this moment only three organisations hold a license:
The basic statute governing money games is the Lottery Act (491/65), which came into force on January 1, 1966. See www.ray.fi/ english/ray/legal1.htm. According to legislation, bingo, casino and slot machines offering money and commodities as prizes are also classified as lotteries. In Finland, money games have a prominent role in funding nonprofit activities. The Lottery Act prescribes how the proceeds of all three game operators arranging money games are to be used. It also stipulates the basis of lottery activities, whereas details are stipulated by decrees.
The law reform has been prepared since 1993 and in 2000 the proposal was introduced at Parliament. In November 2001, the new Lottery Act was accepted by Parliament and came finally into force on January 1st, 2002. (See attachment: earpajaislaki.doc). The new legislation now provides the lottery business with a monopoly status based on the EC Court's view of the exclusive right. In December, 2001, the Counsil of State granted Veikkaus the right to operate games for 5 years.
The new legislation is based on the existing tripartite monopoly system. The division of tasks between the operators in the money gaming field did thus not change essentially. (Source of the Lottery Acts are: RAY).
In Finland Internet gambling was launched in 1996. The National Lottery of Finland, Oy Veikkaus Ab, was then given a license by the government to operate its games on the Internet. Fintoto has also a license to operate games on the Internet and launched its tote operations in January 2001 under the name Fintoto Oy.
In Finland, the important precondition for receiving a license for operating Internet games was to arrange game operations so that those games could not be sold crossborder and that playing with credits was not permitted. The purpose was to make sure that the principle of the national treatment established by the EC Court of Justice in connection with the Schindler case in 1994 will work and that the injuries caused by gambling will not increase.
The National Lottery of Finland requires a personal identity code and an account with a Finnish financial institution before someone may register as a player. This is a way to restrict the group of players to persons living in Finland or having other ties to Finland.
Playing on credit is prohibited by opening an account for the registered player in theNational Lottery of Finland. The player may deposit a maximum of EUR 5,000 into the account. The lottery company charges the playing account according to the stakes the player has chosen. If the player wins, the company transfers the profit into the playing acount. If the balance in the playing account exceeds EUR 5,000, the exceeding amount is automatically transferred into the player's account with the financial institution.
In December 1999 PAF launched its first sportsbetting games for online gaming, and the casino opened in June 2000. In April 2001, PAF added lotteries to its game portfolio. The Finnish Ministry of the Interior questioned the permit of the Internet games granted to PAF by the Åland Provincial Government.
In Mid-April 2001 the Finnish Supreme court decided that PAF, the Åland Islands' Slot Machine Association, is allowed to set up an online gambling site. The site, www.paf.fi, was (re)launched on 12 April 2001, after the affirmative decision the day before. "However,” adds Lars Porko, PAF's CEO, "we never stopped our Internet gambling operations since we started at 3 December 1999.”
PAF has said that the association will provide online betting, lottery and casino functions. The decision means that PAF will be able to look for sponsorship contracts and market the site. It also means competition for the Finnish”mainland”gambling monopoly. The case was taken to court when the Ålandic government gave PAF the right to open the site, interpreting the law as saying that Internet gambling takes place where the gaming license, game administration and server are located, not at the player's location. The Finnish government and the gambling monopoly Veikkaus did not agree with this interpretation, but the Supreme Court decided that the Åland Islands were right. On July 18, 2001 the Finnish President, Tarja Halonen, decided not to ratify a disputed new Finnish gambling law. The law, which bans Finnish moneylenders from gambling at theInternet site maintained by the Ålandic Slot Machine Association, has been criticised as being against the Ålandic autonomy law.
The president has apparently asked the Finnish Supreme Court to investigate whether the law would be in conflict with the autonomy of the Åland Islands and on August 30, 2001 the Supreme Court with a unanimous decision decided the Finnish Law was not in conjunction with the Finnish constitution. This decision was very well received on the Åland Islands and it means that Internet gaming will continue to develop in accordance with the license of the Åland Islands.
Market
In 2000 the turnover of the three biggest game operators, Veikkaus, RAY and Suomen Hippos totaled EUR 1,742 million, of which the share of Veikkaus was EUR 1,083 million, that of Rahaautomaattiyhdistys was EUR 541 million (prizes paid for players have been reduced from the RAY proceeds) and that of Suomen Hippos EUR 119 million. The net profit of money game companies amounted to EUR 743 million in 2000. The net profit of Veikkaus was EUR 379 million,whereas thatof Rahaautomaattiyh-distys was EUR 359 million and that of Suomen Hippos EUR 6 million.
The lottery and betting revenues in 2002 was calculated for 355 million Euro which is much less than expected by the Ministry of Finance (396 million Euros). According to Veikkaus, the increasing popularity of online sports betting services has eaten away at its revenues.
The profits from lottery and betting activities cover 77% of the spending of the Ministry of Education. Libraries, orchestras, theatres, museums, and numerous cultural events receive their state funding from the lottery and betting revenues.
Money Game field in Finland
Almost all Finns (92 percent) play Veikkaus' games. In 2000 86 percent of the Finnish citizens played the lotto, half of them every week. The main reason for playing it is that it is a simple game and that there is a possibility of hitting jackpots. People in the older age groups play the lotto more than others (81 percent of those over 50 years of age).
The total betting market in 2001 was 1,779 million EUR.
Market shares
Website: www.veikkaus.fi
| KEY FIGURES (in EUR million) | 2001 | 2000 | |
|---|---|---|---|
| Turnover | 1,065.9 | 1,082.7 | -1.6% |
| Gross margin on sales | 410.1 | 425.0 | -3.5% |
| Operating profit | 359.1 | 377.0 | -5.0% |
| Net profit before provisions | 355.2 | 367. | 33.3% |
| Net profit | 377.0 | 378.6 | -0.4% |
| Personnel | 349 | 334 |
|
| Online and instant retailers | 3,972 | 4,051 |
|
| OnNet players | 169,715 | 107,641 |
|
In 2001 5,000 sales persons participated in training events.Veikkaus paid in 2001 EUR 74.9 million commissions to retailers.
Beneficiaries: Arts, sports, youth work and science.
Jurisdiction: Finland
The State owns 100 percent of the shares of Veikkaus. The Council of State grants the license to Veikkaus and the Ministry of the Interior supervises its activities. Veikkaus is the largest of the three organisations licensed to conduct money games in Finland.
Veikkaus was founded by Finnish sports organisations under the name of Oy Tippaustoimisto Ab in the spring of 1941. The company was finally given its present name Oy Veikkaus Ab in 1971. At the end of 1975 the shares of the company were sold to the Finnish state.Veikkaus, now a stateowned limited company, operates money games in order to fund Finnish national culture. Veikkaus has exclusive rights for operating lotteries, and betting games. Veikkaus returns its gross profits to the Ministry of Education, which distributes the funds in order to promote Finnish culture: arts, sports, science and youth work. The players of betting games are the single largest group to fund the Finnish national culture.Veikkaus' sixtieth year of operations, in 2000, was successful. The company achieved the greatest turnover and the best result of its entire history. The turnover was EUR 1,082.7 million, with an increase of EUR 73.2 million, i.e. 7.2 percent. There was growth in all games groups. The gross margin on sales increased to EUR 425 million, being 9.4 percent larger than the year before. As the operating profit grew even more, i.e. 10.1 percent, the prize money was EUR 504.5 million.
The year 2001 was very difficult and the turnover decreased compared to the previous year for the first time since 1985. The turnover of EUR 1,065,9 million was 1.6 % smaller than in 2000. And according to Risto Nieminen Veikkaus' new Managing Director this was caused mainly by the Lotto, whose share of all game sales remained at the level of 38.0 %. And even at the end of the year, Lotto had a negative turnover of EUR 44.7 million, i.e. 10.0 %.
And Risto Nieminen continues: "We were not able to reach the contribution objective to the Ministry of Education originally established in the State Budget. In fact, we could not have reached it even if the turnover had grown according to the growth objective in Veikkaus' own budget. The contribution objective was lowered in the State's auxiliary budget afterwards. Finally Veikkaus handed over EUR 377.0 million to the Ministry of Education. This includes EUR 3.9 million from the building fund which was liquidated and recorded in the result.” Several court cases, a.o. versus the internet gaming site of PAF, the gambling site of the autonomous Province of Åland, caused disturbants for the employees, as well as the customers. Veikkaus is a member of several international organisations: the World Lottery Association (WLA), the European State Lotteries and Toto Association EL and the European Football Pool EFP.
In 2000 Veikkaus had altogether 17 different money games, which are divided into Lotto games, other online games, games of skill and instant games.
The different turnover of game groups in EUR million:
| 2000 | 2001 | |
|---|---|---|
| Lotto games: | 507.4 | 473.6 |
| Lotto and Viking Lotto | 46.9% | 44.4% |
| Games of skills: | 334.4 | 339.0 |
| Football Pools, FixedOdds Betting, Result Odds Betting, V5 and V75, Off-track Horse Betting |
30.9% | 31.8% |
| Instant games: | 152.8 | 160.3 |
| Afrikan Tähti (African Star), Casino, Luontoarpa (Nature), Onnensanat (Lucky Words), Theme instantsand Ässä |
14.1% | 15.0% |
| Other online games: | 88.1 | 93.0 |
| Bingolotto, Joker, Maailman Ympäri Around theWorld Spede's TV Games |
8.1 % | 8.7% |
On the 5th of February 2002 Veikkaus launched a new Internet gaming system. The new generation gaming platform OnNet2 replaced the previous Internet gaming system used since 1996. OnNet2 opened, among others, the possibilities for the development of real-time betting games that can be played while the sporting events are going on.
The entire offering of Veikkaus' coupon games both sports betting and games of chance is currently available for registered Finnish players through the Internet and mobile self-service channels, as the system is connected to GTECH's online system. The new OnNet2 system facilitates also the development of games which are played only through Internet and mobile channels. It will also be possible to develop instant lottery games on the OnNet2 platform.
Thanks to its scalable three-tier architecture, the system capacity can be easily increased in the pace of the continuously growing numbers of registered players. The new architecture also facilitates the gaming usage of multi-channel user interfaces such as digital interactive television.
The system was deployed successfully according to schedule after 18 months of development work. The Finnish software company Softplan is Veikkaus' partner in the system development.
Veikkaus started Internet gaming as the first national lottery in the world in December 1996. The OnNet system currently facilitates gaming both through the Internet and touchtone and WAP phones.
Veikkaus' Internet gaming sales have doubled each year during the last five years. January 2002 (week 3) OnNet experienced a new sales record of over 1.1 million euros, representing over 6 % of Veikkaus' total weekly sales.
The sports betting games are the most popular games among the registered Internet players, as more than half of OnNet sales comes from sports betting. However, the share of games of chance such as Lotto of OnNet sales has been increasing all the time.
The number of registered OnNet-players was 169,715 at the end of 2001, in 2000 that was 107,641 (the respective number at the end of 1999 was 57, 498). About 180,000 players registered themselves in OnNet in January 2002.
Turnover of OnNet playing in in 2001 was EUR 39.0 million, and in 2000 it was EUR 25.5 million, which is more than four percent of the total weekly turn-over of the online games. Veikkaus has a solid basis for the competition on the digital market. It started to offer Internet games from December 1996 and claims in its Year Report 2000 that it is "the first national internet lottery in the world.”
Playing by push-button phone was launched at the same time, but its share has remained un-important. By contrast, a growing number of Veikkaus' customers, especially betters, choose to play through the Internet. The number of Lotto-players on the Net is increasing as well. The turnover of Internet gaming has doubled yearly, and the end of the year 2000 the weekly sales exceeded EUR 0.7 million.
On the 23rd of September 2002 Veikkaus announced an online partnership with major bank Nordea. Nordea is the leading financial services group in the Nordic and Baltic Sea region, a leader in Internet banking with 3.1 million e-customers.
This partnership enables all the 1,2 million users of Nordea's Solo Internet banking service in Finland to play Lotto, Keno or place bets in OnNet through the Solo banking site. Customers normally use the service for paying their bills and placing their stock market orders.
The player using Solo does not need to register himself separately as a OnNet user, nor transfer money to a player account in OnNet, but can use his bank account to pay directly for the gaming transactions. Wins are also credited directly to the player's bank account.
Veikkaus' OnNet Internet gaming system has currently over 220.000 registered users and weekly sales of over 1,3 million euros, representing over 6% of Veikkaus' total sales.
Having started on November 12th, 2002, the new partnership thus enables over 1,2 million Finns to play in the Internet using OnNet.
Digital TV will be the market of the near future, and Veikkaus has charted its possibilities in connection with many research projects, as well as developed its own demos and prototypes to model the gaming transactions. The objective of Veikkaus' strategy for the digital TV is to start interactive gaming activities through the new media. Veikkaus has already developed a new electronic instant game, which can be played both on the Internet and the digital TV.
In May 2002 Veikkaus developed new digital television Lotto service a new way of playing the Lotto via digital television. As of the begining of 2003 the general public is able to play the Lotto on digital TV.
Lotto is a very popular game in Finland. Nowadays 75% of Finns play Lotto, 40% of them every week. The most common way to play Lotto is through the online gaming system at retail outlets. However, since 1996 Lotto has also been offered as a Web game. Last year Finns spent more than ? 400 million playing Lotto.
Playing iTV Lotto is easy. The player fills a coupon on a digital teletext system using a remote control. The digital teletext is an additional information service always available on every Finnish digital TV channel. The coupon is sent from the digitelevision via a return channel to Veikkaus' server. The player pays for the game via the return channel using a gaming account with a password. The prizes are also transferred to the gaming account. This system of gaming accounts and passwords is already in use for the web based Lotto game.
The new iTV lottery service has been developed by Veikkaus, MTV3 Channel and Sofia Digital Ltd.
Playing via different mobile terminals, made possible by wireless environments, will also be part of everyday life in the future. The developing of the WAP environment, started in the autumn of 1999, was finalised in 2000, and WAP gaming began in December 2000, at first as a pilot project by one operator. However, all the important operators joined the game at the beginning of 2001. Veikkaus (as well as Suomen Hippos) is a minority shareholder (10%) in the digital technology-based Suomen Urheilutelevisio Oy (Finnish sports television company) established in the spring of 2000. Veikkaus is involved in the digital TV operations in order to develop its games andto make the most of the possibilities of the new distribution channel. The digital TV makes it possible to offer real-time games in connection with TV programmes. Veikkaus' Board of Directors decided to end its betting operations in the province of Åland from 2 October 2000. The reason for this was a position statement by the Provincial Government of Åland on the gaming operations conducted by Veikkaus in Åland.
The Provincial Government announced that the exclusive right to offer betting games in the province of Åland since 1993 belonged to PAF, the Slot Machine Association of Åland. At the same time, Veikkaus decided to file an application to the Provincial Government for a license to continue other pools and lottery activities in the province. Veikkaus has offered its games in the autonomous Åland Islands since Veikkas founding in 1940.
Another significant question from the point of view of the task of Veikkaus was the dispute between the Finnish State and Ålands Landskapsstyrelse, the Åland Islands' autonomous government. The gaming operator PAF from the islands of Åland did not consider marketing of Internet games in the Finnish mainland illegal. The Ministry for the Interior has asked the Supreme Court to make a statement on the matter and other related questions. This year, twice, the Supreme Court of Finland decided that the autonomous Åland Islands and its government had the rights to operate the PAF betting site.
Website: www.fintoto.fi
Fintoto Oy, a Finnish non-proft joint-stock company, commenced horse betting operations in the beginning of 2001. It is one of Finland's three licensed Internet gaming operators and a subsidiary of Suomen Hippos ry, the Finnish Trotting and Breeding Association, which has 129 member associations. Suomen Hippos was established in 1973 through the merger of the central organizations Ravirengas and Hevosjalostusliitto.
Fintoto's objective is to sponsor horse racing and horse breeding in Finland by operating and marketing horse betting in an efficient way. Fintoto arranges tote betting on 43 racetracks and at 450 betting shops throughout Finland. In the year 2000, the combined turnover of tote betting was 709.2 MFIM (119 MEUR).
During the past year, as well as this year, the gross turnover has increased by 9 percent. The budgeted turnover of the company during its first year of operation is approximately 800 MFIM (135 MEUR). The new law is based on the highly national arrangement which divides horse betting between the two companies, Oy Veikkaus and Fintoto Oy.
Veikkaus will operate the big pools (V75 on Saturdays, V5 on Wednesdays and Daily Double on Mondays and Fridays) and Fintoto Oy is responsible for the parimutuel betting in two categories: bets with several winning classes (Veikkaus) and pari-mutuel (Fintoto). The total turnover in horse betting in 2000 was FIM 1,124.6 (189.2 Euro). The increase was 8.6 percent as compared to the previous year. The horse betting turnover has now increased for six successive years. Only 18 percent of the turnover was bet on the track. Fintoto Oy started its new operation from January 1st, 2001, and is regulated by the Ministry of Interior.
Turnover in 2001: 1,779 million EUR, which is 7.4 % of the total gambling market in Finland (increase +0,6 % compared with 2000).
Turnover in horse betting:
Encouraged by the positive experiences of Veikkaus and ATG (Sweden), Fintoto has decided to launch Internet betting in May 2002. The system is currently in the application phase and will also include mobile and interactive digital TV solutions.
Website: www.ray.fi
RAY (Finland's Slot Machine Association, or in Finnish Raha Automaatti Yhdistys) is a very professional and widely-known organisation with a legal monopoly to function as a gaming operator. RAY's gaming revenue is utilised to benefit people needing assistance and support. RAY operates slot machines and casino games in Finland. RAY operates games both in its own locations and in cooperation with other businesses. RAY also operates an international casino, Casino RAY, which is located in Helsinki.
The first slot machines appeared in Finland in the 1920s, when private entrepreneurs imported pajazzo type machines from Germany. It was not long before the public began to complain that private businesses were making profits by exploiting people's urge to play the machines. In 1933 the state intervened by issuing a decree giving charity organisations the exclusive right to operate slot machines. Competition between the organisations nevertheless quickly resulted in a new decree, which was issued in 1937. This specified that a new association should be set up and given the exclusive right to carry on gaming operations.
This association was to use its gaming revenue to provide funds for the promotion of public health. The Slot Machine Association, RAY, was thus established by eight charity organisations, together with representatives of the Finnish state. Ray began its operations on April 1, 1938, and at the same time began production of its own machines. Ray's basic function is to raise funds through its gaming operations in order to support the work as voluntary health and welfare organisations. This Finnish method of providing care and assistance has been benefiting people for over 60 years.
RAY's operations are governed by the Lotteries Act (23.11.2001/1047).
The Ministry of the Interior oversees RAY's gaming operations and the Ministry of Social Affairs and Health supervises its funding activities. In a judgment on September 21, 1999, the European Court of Justice stated that RAY's exclusive right to operate slot machines in Finland is not in contravention of EU legislation and does not violate the freedom to supply services. The Community provisions relating to freedom to provide services do not preclude national legislation that grants to a single public body exclusive rights to operate slot machines, in view of the public interest objectives which justify it.
The Court's view is that the Finnish legislation involves no discrimination on grounds of nationality, in as much as it applies without distinction to all economic operators, whether they are established in Finland or in another member state. The Court also considers that it is for each member state to assess whether it is necessary to adopt regulations imposing a code of conduct on the economic operators concerned or, alternatively, to grant an exclusive operating right to a licensed public body. Whichever option is chosen, it must, if it is to comply with community law, be proportionate to the aim pursued.
As international research shows, here is how Finns and Norwegians answered the question, "When did you last play on a slot/ fruit machine?” The results were:
| Week | Year | ||
|---|---|---|---|
| Finland: | 1994 | 22 % | 51 % |
| Finland: | 1997 | 23 % | 51 % |
| Finland: | 2000 | 25 % | 52 % |
| Norway: | 1994 | 13 % | 52 % |
| Norway: | 1997 | 10 % | 44 % |
| Norway: | 1999 | 7 % | 30 % |
| Week: during the past seven days; Year: during the past twelve months) | |||
RAY's Board of Administration always includes one representative from each of the following ministries:
In addition, the Board of Administration also includes members appointed by the Council of State and members elected by the General Meeting. RAY comprises 97 member organisations operating nationwide in the health and welfare fields. The highest authority in the Association is vested in the General Meeting. Of the members of the Board of Administration, seven are appointed by the Council of State (Finnish Government) and seven by the General Meeting.
Last year (2001) RAY produced an excellent financial result. Gaming revenues increased by 4.4% against a target of 5%. The increase in turnover was a couple of percentage points lower due to last year's increase in lottery duties from 3% to 5%. In spite of this the operating profit increased by 6.7% and the profitability of RAY's activities improved. This, in turn, was due to a lower level of investments than in earlier years and a steady trend in the level of costs. As its operations entered a new year, RAY's finances were also on a sound and stable basis. RAY's total revenue for 2001 was EUR 582.3 million. After taxes the turnover for 2001 was EUR 553.3 million.
| EUR (Millions) | % | |
|---|---|---|
| Total turnover in 2001 | 553.3 | |
| Slot machines in Business premises | 447.1 | 80.8 |
| RAY Arcades and clubs | 66.1 | 11.9 |
| Casino-types games | 19.7 | 3.6 |
| Casino RAY | 19.0 | 3.4 |
| Sales and Rent | 1.4 | 0.3 |
| Utilisation of turnover Promotion of health and Social Welfare | 383.1 | 62.9 |
| Space rental | 84.4 | 15.3 |
| Salaries and social expenses | 41.8 | 7.6 |
| Other expenses | 34.1 | 6.1 |
| Net investments | 9.9 | 1.8 |
Each year RAY allocates the entire profit from its gaming operations to non-profit health and social welfare organisations. These organisations provide Finnish people with information, services and many different kinds of care. In this way voluntary organisations supplement and complement the range of public services available. In the year under review RAY received applications from 1,682 organisations for a total of EUR 823 million in funding assistance for 2002. The applications included 3,926 activities and projects in total. RAY's Board of Administration completed its distribution proposal in December, and the Council of State issued its decision on assistance for 2002 in February 2002.
In accordance with the national budget and RAY's proposal, a total of EUR 377.3 million of funds from RAY will be used to promote health and social welfare in 2002. Of this total, EUR 279.5 million will be distributed in funding assistance to the organisations.A total of 1,115 organisations will receive funding assistance, of which 114 are firsttime recipients. In all, RAY's funding will be used in 2 326 activities and projects, of which 579 are being supported for the first time.The distribution of funding for the year 2003 will be decided by the Council of State in February. Funds are distributed as specified in the Lotteries Act and Slot Machine Statute.
RAY's games and slot machines offer abroad variety, and they can be played in hotels, clubs, restaurants, pubs, cafés, service stations, supermarkets and kiosks. In addition RAY also operates its own clubs and arcades, which offer a slightly different choice of slot machines, as well as casinotype games. RAY operates 16,500 slot machines in 9,000 locations. All these machines are designed, developed and manufactured by RAY. The slot machines have an average pay-out ratio of 87 per cent.
Slot machines are to be found in hotels, clubs and restaurants, pubs, cafés, service stations, supermarkets and kiosks. RAY's range of slot machines includes Deuces Wild, Draw Poker, Fruits, Hold It!, Joker Poker, and Lucky Clover. Production of traditional Finnish pajazzo machines, which demand a certain amount of skill on the part of the player, has been relaunched after a break of several years. Children under 15 years of age may play slot machines only in the presence of an adult from the same family. Casino games (roulette, blackjack and Red Dog) can be played in hotels, clubs, restaurants, and some pubs. Roulette first appeared in Finnish clubs and restaurants in 1969. The total number of tables is now 322. Blackjack was first played in Finland in 1982, and it is still continuing to grow in popularity. There are presently 239 card tables in the country.
Website: www.casino.ray.fi
Casino RAY is the only international Casino in Finland and is located in Helsinki. It was established in 1991. The Casino is owned by RAY, the Finnish Slot Machine Association, Casino Ray offers Poker favourites like 7 Card Stud, Texas Hold'em, Omaha Hold'em and 5 Card Stud (Soko). They also have 134 different slot machines as well as 6 American roulettes, 5 blackjack tables, Punto Banco, Red Dog and Oasis Poker. The casino has its own website with information about games, tournaments and other special events. There is a restaurant in the casino, and Casino RAY also offers shows and other entertainment.
Täyspotti's arcades are for adults only. Customers in these no-smoking establishments can play slot machines and try their luck at roulette and/or blackjack.
'Potti' arcades are located in shopping centres and supermarkets. The premises are supervised, and customers can play slotmachines. In Finland a number of ten casinos are operated in hotels.
Website: www.paf.fi
PAF was founded in 1967 under the name of Ålands Penningautomatförening (The Åland Islands' Slot Machine Association). The aim was to collect funds for charitable causes through the operation of gaming and amusement machines. Until then, all gaming on the islands had been operated by different charitable organisations and the proceeds went directly to the different operations. This tended to promote competition between the charities. In order to harness the industry more directly to the good of the combined charities, several organisations amongst them the Red Cross and the Save the Children Fund decided to join forces in an 'umbrella' association and ask for the right to run a gaming monopoly. PAF was the outcome.
Because of the limited size of the Åland domestic market the Islands have a population of little more than 25,000 PAF decided in the mid eighties to utilise its gaming operator skills outside the monopoly market and strengthen its position on the international marketplace. As a result, PAF Consulting Ab a joint stock company, 100% PAF-owned was established in 1985. Today, PAF Consulting holds gaming concessions on Greek, Swedish and Estonian vessels. Through subsidiaries PAF Consulting Ab has also established itself on the Swedish market.
The activities of PAF embrace different types of shipboard and land-based gaming operations. PAF is organised in the form of a group of companies, the main activity of which is the provision of gaming entertainment onboard ferries and cruise ships operating in the Baltic Sea and the Mediterranean. The PAF group is, with its more than 30 shipboard concessions, one of the world's leading operators of maritime gaming.
Operations in Åland and on ships registered to the Islands are managed by the parent company, PAF. The international operations are managed by the wholly-owned subsidiary, PAF Consulting Ab, and its foreign subsidiaries and holding companies.
(Ålands Penningautomatförening and PAF Consulting Ab Group)
Currently PAF accepts customers from Finland and Sweden only. Later this year, however, an English version will be added. PAF has about 35,000 customers and about half of them playing Internet games on a monthly basis.
The eight member associations of PAF are:
Each year a Distribution Committee with a representative from each of the member associations, a representative from the government and a representative from PAF decide to which organisations and causes the funds should be distributed. Traditional beneficiaries are organisations for the disabled, senior citizens, youth and children, public health, cultural organisations, the Sea Rescue Association, the Red Cross etc. The funds are distributed in the form of grants and low-interest loans. Since the inception in 1967, PAF has contributed nearly 400 MFIM, in today's money value, to cultural, sporting and social activities. During 2000, 30.3 MFIM was distributed in grants and loans for the public good in Åland.
PAF's speciality since more that 30 years is to develop turnkey gaming concepts for the cruise and ferry industry. With more than 30 shipboard concessions in the Baltic Sea, the Mediterranean and the Caribbean we are recognised as one of the leading shipboard gaming operators in the world. Services are:
PAF holds shares in:
The PAF Group, since 1967 is managed and administrated from the head office in Mariehamn. The operations in Sweden and Estonia are controlled through subsidiaries. The gaming operation onboard the cruise ships in the Mediterranean and Caribbean are administrated by local management with support from the head office in Mariehamn, Finland. Since 1974 Lars Porko has been the CEO of the PAF group of companies.
The former President of Finland Martti Ahtisaari relaunched in 2001 the idea of realising a Global Lotto as a new (and independent) revenue vehicle for the United Nations. And Finland is investigating the possibilities and the practical implementation. The Ministry for Foreign Affairs of Finland is financing research on the concept of the Global Lotto. This world wide UN lottery idea dates already from 1972 and in 2001 the ex-president of Finland Martti Ahtisaari renovated the initiative: "The UN desperately needs financial independence. The steps to launch systems like the Tobin Tax, even if they became operational, might be too long to wait for. I have been thinking about a world lottery,which would partially facilitate the financing of UNactivities.” (For more information see: document Global_lottery_presentation.pdf).
U.K.'s Ladbrokes is aiming to offer Scandinavian punters an alternative to state-run betting and gaming operations. The first phase of its Nordic strategy is a Swedish service from Ladbrokes.com- its online betting and casino arm. Customers will be able to bet on the popular English Premiership and European football betting markets, as well as have access to products that appeal to the Nordic market such as ice hockey and Swedish, Danish, Finnish and Norwegian league football. Although based in the U.K., the localised site will be maintained by Swedish content providers and customer support teams, and odds on local sports will be compiled by specialist experts. Another "bookie” with a Finnish language site is WilliamHill. Eurobet is also targeting Scandinavia. All look-a-likes.
Website: www.nokia.com
Nokia is the world leader in mobile commu nications. Backed by its experience, innova tion, user-friendliness and secure solutions, the company has become the leading supplier of mobile phones and a leading supplier of mobile, fixed broadband and IP networks. By adding mobility to the Internet Nokia creates new opportunities for companies and further enriches the daily lives of people. Nokia comprises two business groups: Nokia Mobile Phones and Nokia Networks. In addition, the company includes a separate Nokia Ventures Organisation and the corporate research unit, Nokia Research Center.
Nokia is traded on the following stock exchanges:
Nokia confirmed its ability to perform well in an intensely challenging environment, demonstrating operating excellence with increased sales and industry-leading profitability.
Company exceeded 1Q profit targets on slightly lower sales with better-than-expected profitability in mobile phones offsetting challenging network environment. Outlook for remainder of 2002 (as of April 18, 2002) Demanding industry conditions continuing particularly in the network infrastructure market.
Year-on-year estimated developments:
Nokia Mobile Phones is the world's largest mobile phone producer. With the comprehensive product portfolio covering all consumer segments and cellular protocols, Nokia is in a strong position to lead industry development, based on our vision of a world where an increasing share of all personal communication occurs over personal wireless terminals such as mobile phones.As the functionality of mobile phones moves from voice-centric to include media, imaging, entertainment and business applications, whole new markets are being created and the growth opportunities are enormous. In 2001, Nokia grew its full-year market share in mobile phones for the fourth consecutive year, reaching approximately 37% almost double the level of 19% in 1997. At the end of the year, Nokia Mobile Phones represented approximately 76% of Nokia's net sales.
At Cannes, 2001, Nokia introduced a complete range of solutions for mobile services specially aimed at corporations of varying types and sizes. Nokia's selection of corporate solutions offers solid stepping stones toward 3G that enable a wide variety of attractive services for the corporate segment. The demonstration consisted of three services; Mobile Brokerage, Mobile Banking and Betting Zone. In the Betting Zone user selects his favourite for the Formula One Championship and signs the bet by the signing PIN. Experience much more convenient way of using mobile services with digital signatures with Nokia Active Trust Server.
Future
By 2002, Nokia estimates that more people will access the Internet via a mobile handset than via a PC. This prediction indicates there is a tremendous potential for mobile entertainment and huge market opportunities for game developers and publishers as well as mobile network operators.
Datamonitor has recently estimated that there will be close to 200 million mobile phone users playing wireless games in the United States and Europe by 2005.
Website: www.sonera.com
Sonera, the mobile communications operator in Finland, is a leading provider of mobile and advanced telecommunications services. Sonera is growing as an operator, as well as a provider of transaction and content services in Finland and in selected international markets. The company also offers advanced data solutions to businesses, and fixed network voice services in Finland and neighbouring markets. In 2001, Sonera's revenues totalled EUR 2,2 billion, and profit before extraordinary items and taxes was EUR 0,45 billion. Sonera employs about 10,000 people.
Other financial key information:
Telia has filed on May 28th, 2002, in cooperation with Sonera, the merger notification with the European Commission in respect of the planned business combination between Telia and Sonera. As a result, the European Commission's Phase I review is expected to be completed by mid-July 2002 at the latest, which is in line with the previously communicated, preliminary timetable.
On October 8, 2001, Sonera Mspace launched Mstation, a new third generation service pilot and aims at facilitating wireless use of the Internet and feature rich services with state of the art technology and new mobile applications. The pilot users are ordinary mobile phone customers who use a device combination consisting of a PDA and mobile phone connected with Bluetooth. Mspace offers an open pilot environment also for 3rd parties to test their technology and applications. Mstation enables wireless access to the Internet through an easy-touse equipment solution: The mobile phone and PDA are connected to each other through Bluetooth technology, which provides a more flexible and convenient usability compared to, for example, infrared technology.
The Mstation trial studies the usability aspects and challenges related to future mobile applications. For example, the trial provides customers with an experimental user interface control mechanism that is based on movements of the mobile device. The innovative solution, developed by US-based company Vega Vista, uses motion detectors that are integrated into the extension sleeve together with Bluetooth connectivity. This new interface mechanism will be applied to different types of Mspace applications and it also complements standard www browser functionality.
One of the core ideas of the Mstation trial is to take advantage of all the available www content and offer Mspace customers easier and more efficient mobile access to existing Internet services. Mstation offers tools for quick mobile service queries and off-line browsing, and it also utilises new technology to fit content into small screens. Other Mstation trial applications will cover areas such as wireless games, messaging, on-line betting, and lottery services. Mspace provides customers personalised news and city info services in order to validate personalization and automatic content filtering features that are seen as promising application technologies in the mobile environment. Sonera and Veikkaus have signed a sales, marketing and development cooperation agreement. The agreement concluded on March 11th, 2002, further strengthens the already close cooperation between the two companies, aiming to generate profitable business for both, particularly in the fields of mobile communications and the Internet.
The first cooperation project of Sonera and Veikkaus, to start from March 11th, 2002, is zed's results service for the games of Veikkaus. The results of nearly all games of Veikkaus can be obtained by sending a text message XXXX (name of the game, e.g. LOTTO) to the number 16400. The search costs 0.59 EUR per search. The results indicate the latest winning line and the winning share. zed has been offering LOTTO results as a text message service at the number 400. This service will be terminated by the end of the year, as the new service takes its place.
Website: www.eget.fi
European Game & Entertainment Technology, which provides Internet gaming technology to PAF, specialises in providing turnkey Internet solutions for government licensed lotteries in fully regulated jurisdictions. The company is committed to establishing itself as a leading provider of interactive gaming solutions globally. The company was founded in February 1999 and currently employs 40 people in Mariehamn, Helsinki and Stockholm. EGET represents a combination of gaming industry know-how and expertise in Internet, wireless communication and e-commerce technology.
EGET believes that Internet distribution to personal computers, wireless media and digital television will become an important means of distributing games to consumers within the next 24 48 months.
The company has developed the market's most advanced system WinOne(tm) for gaming via the Internet and on the telephone. The system uses the latest technology to create dynamic, individually adapted gaming services with maximum availability in time and space. The system offers casino, lottery and sports betting games, sophisticated liability management tools, powerful security solutions and the ability to handle large volumes. The main target group consists of government-licensed gaming operators. In Finland, WinOne(tm) has been used by Alands Penningautomatforening for its PAF Online Internet gambling service (www.paf.fi) since December 1999. EGET Ltd Ab has operations in Mariehamn, Helsinki and Stockholm.
The gaming market in Finland, including lotteries, betting, slot machines and casino games, generates an estimated annual gross revenue of approximately 3.4 billion Euro, which roughly corresponds to the revenue of the entire telecommunications market in Finland. An increasing proportion of gaming activities are currently transferring to the Internet. The amount wagered annually in the European market is approximately 170 billion Euro. It is estimated that during the next five years, one third of this volume will be wagered via the Internet.
On the 7th of January EGET released the WinOne(tm) Scratch Card Module. The 'Trio' Scratch Card was the first game released using the new module. The game consists of three separate games: two traditional scratch games and a second screen, double-or-nothing game. All game clients are implemented using Shockwave delivering excellent graphical quality and high player appeal. The new game was commercially launched by EGET's Finnish customer Ålands Penningautomatförening (PAF) in December 2001.
In January 2002 EGET delivered its Win-One ™ system to Norskespill.no, one of three government-licensed Internet gaming operators in Norway. The system was customized to the Norwegian consumer market and regulatory requirements.
Norskespill.no was founded in 2001 for the specific purpose of establishing and manag ing an Internet gaming operation on behalf of the leading Norwegian humanitarian organisations. The Company is the holder of one of three test licenses for Internet wagering in Norway. This is the exclusive license for instant lottery type games. The other two licenses are for betting and lottery (Norsk Tipping) and parimutuel wagering (Norsk Rikstoto). Norskepill is 51 % owned by a coalition of ten of the leading humanitarian organisations in Norway and 49 % by Cee.tv AS, a Norwegian company specializing in interactive digital TV and content development.
The new gaming site, www.tivoli.no was commercially launched in Oslo on Friday 18 January 2002. The site offers three games: the card game 21, Wheel of Fortune, and a scratch card game.
In September 2002 EGET has supplied the WinOne ™ system to Fintoto, a subsidiary of Suomen Hippos ry, the Finnish Trotting and Breeding Association. The new gaming site, www.fintoto.fi, is based on EGET's Win-One ™ gaming platform. The same tote horse betting games previously available only at Finnish horseracing tracks and through Totoline agents, can now be played on the Internet. Fintoto's proceeds will be used to support Finnish horseracing.
At the Internet gaming site, registered players can search Suomen Hippos' extensive database of horses and drivers. Punters also can personalize the gaming site to their own preferences. Individuals who play games requiring skill are demanding, and the gaming site provides access to the latest information and valuable last-minute tips.
Today the major shareholders of EGET are:
Website: www.slottsbacken.com
Slottsbacken Venture Capital (SVC) has SEK 300 million at its disposal for investments in the fields of telecoms, data and media and operates in the Scandinavian countries only, with offices in Stockholm, Copenhagen and Helsinki.
The goals of the operations include:
Slottsbacken was founded in 1996 to operate a fund over a 15-year period, up to and including the year 2010. The fund expects to be fully invested sometime in 2003. The average length of commitment to a company is between 2 and 7 years. Together with reinvestments, the maximum investment in a single company may not exceed SEK 30 million. Slottsbacken tries to maintain holdings at over ten, but under 50 percent of a company's capital, but it is not its intention to hold majority shares of companies.
Investors
The fund is financed equally by two investors, Telia on whose initiative SVC was launched in 1996 and NPI Fund, Sixth Fund Board, which made its first investment in the fund in 1998. (www.ahtisaari.fi/files/global_lottery_presentation.pdf)