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Finnish players potentially face very significant tax implications if playing on online gambling platforms that lack a Finnish licence. This highlights the importance for gambling service providers to be compliant with new Finnish licensing requirements, if games are to be made available to Finnish players.
Gambling system reform bill is passed by parliament
In our blog series regarding the Finnish gambling system reform, we have previously published four blogs (Part I, Part II, Part III and Part IV ), where we reported that the Finnish Government is planning to reform the gambling system and open it to competition under a licence-based model. The purpose is to open the market to competition for online casino games, betting, and slots. Lotteries, scratch cards, and physical slot machines will remain under Veikkaus' exclusive control.
On 16th December the Finnish parliament passed the Government Bill on the gambling system reform. An amendment to the original Government Bill is that the opening of the gambling system is postponed until July 2027. However, licence applications are expected to open already in March 2026.
In this post, we turn our attention to the tax implications of the gambling reform. Until now, it has de facto been possible for foreign online gambling service provider registered in the European Economic Area (EEA) to have Finnish players with neither the service provider nor the players paying any taxes in Finland. This has enabled online gambling sites registered in tax friendly jurisdictions in the EEA to provide their games to Finnish players tax efficiently. One of the purposes of the gambling reform is to ensure that either the online gambling service provider or the Finnish player will pay taxes in Finland.
Lottery tax for licence holder regardless of tax status in Finland
Licence holders will be subject to a 22% lottery tax. The lottery tax is paid on the Gross Gaming Revenue (GGR), which is calculated as the stakes of the players minus player winnings. The tax will effectively be paid for all players that are registered as residents in Finland. Whether a Finnish resident plays on an online gambling site while actually physically present in Finland does affect the licence holder's lottery tax liability.
The liability to pay the lottery tax is tied to the licence, not to the license holder's tax status in Finland. That being said, licence holders that are located in Finland will also be subject to ordinary corporate income taxation in Finland (including Veikkaus, which until now has been exempted from corporate income taxation). It is important for foreign licence holders to note that they may be subject to Finnish corporate income taxation if they are considered to have a permanent establishment ("PE") in Finland. However, if a licence holder does not have any physical presence in Finland (such as local employees or physical premises), then it is unlikely to have a permanent establishment in Finland. Regardless, it is highly recommended to clarify the potential corporate income tax implications simultaneously when applying for the license.
Taxation of players – what does it mean to make games playable in Finland?
For players playing on the gambling platforms of licence holders the tax treatment is in most cases straightforward: winnings from gambling are exempt from tax, while losses are not deductible.
The situation is much more complex with regards to gambling service providers located in the EEA that do not currently have plans to acquire a licence in Finland. Until now, gambling winnings from EEA gambling platforms have been tax exempt in Finland for the players. In principle this EEA-tax exemption will remain in place even after the gambling reform is enforced, but with one critical difference: if a game is "made playable" in Finland, then the players' winnings will be taxable if the service provider does not have a licence in Finland.
The definition of "making a game playable" in Finland is not entirely clear based on the updated tax legislation of the gambling reform. In the government's proposal regarding the gambling reform, it is mentioned that a game can be considered to have been made playable in Finland if one of the following factors apply:
- the gambling website is made available in the Finnish language,
- the gambling website is marketed in Finland, or
- the gambling website accepts the registrations of Finnish players.
Especially the final condition seems critical. Typically, gambling service providers must at least in some form request that their players register on their websites for billing and "Know Your Client" -purposes. There is therefore a risk that unless unlicenced gambling service providers explicitly prevent Finnish players from playing on their websites, then the games will be considered to have been made playable in Finland, and the players will be taxed in Finland for their winnings.
Aggressive taxation of players' gambling winnings and implications for service providers
If a player's gambling winnings are taxable, the Finnish taxation can be very aggressive, to the point of even negative income being taxed (i.e. the player must pay taxes despite having bigger losses than winnings). Based on the Finnish Tax Administration's ("FTA") guidelines, in games that are almost entirely luck-based, the player's stake in an individual game event is only deductible to the degree that the player receives winnings from said game event. This essentially means that stakes in games which the player loses are non-deductible. Games such as betting, roulette, slots etc. are typically considered to be almost entirely luck-based (meaning that losses from these games are non-deductible), while for example poker is considered to require a non-trivial amount of skill.
The non-deductibility of losses can easily lead to seemingly absurd situations, since most gambling is based on the idea of players losing most of their games, but potentially recovering their losses through "jackpot" wins. This can be illustrated by an unpublished ruling of the Supreme Administrative Court from last year (KHO 28.5.2025, 1225/2025): a gambler had played a completely luck-based game on a non-EEA casino website, where he had won in total approx. 15.6 MEUR but lost approx. 15.7 MEUR, meaning that the gambler had a net loss of approx. 100 KEUR. Despite the net loss of the gambler, the Supreme Administrative Court concluded the losses were not deductible, meaning that the player was taxed for an "income" of approx. 15.6 MEUR.
While the above interpretation has thus far only been relevant for non-EEA gambling websites, it will also be relevant for gambling service providers within the EEA once the gambling reform is enforced. This might have serious repercussions for example for professional bettors: from a tax perspective, it will likely only be feasible to play on betting websites of licence holders, since otherwise the betting wins will be taxable while the losses will be non-deductible. If none of the established betting service providers acquire a licence in Finland, then professional betting may become financially non-viable in Finland.
While it is the player that carries the risk of the aggressive tax interpretation, it also has serious implications for gambling service providers: if the gambling winnings are taxable for the player, then it implies that the service provider in question might have made its games playable to Finnish players without the required licence in Finland. In other words, the taxation of the players could indirectly lead to the Finnish authorities looking into whether the service provider in question is compliant with Finnish licensing requirements.
How gambling service providers should approach the Finnish gambling reform from a tax perspective
The tax implications of the gambling reform highlight the importance for gambling service providers that wish to offer their games to Finnish players to be compliant with the upcoming licensing requirements. Without a licence, Finnish players being able to play can cause risks both for the service provider and for the players themselves.
Finally, it should be noted that even the players that play on gambling platforms of licence holders may in certain situations face uncertain tax treatment in Finland. This concerns especially professional players, such as poker players, who will often partake in additional transactions directly related to the games.
One example of this is "selling action" in poker: the player will "sell" a percentage of their buy-in (stake) to an "investor", thus limiting their own risk but in return surrendering a corresponding percentage of their potential winnings to the "investor". The FTA could in these situations argue that "selling action" transaction is separate from the tax-exempt gambling activity, meaning that each "selling action" transaction causes a taxable income for the player. This can cause an unforeseen and potentially very heavy tax burden for the player when playing on licensed gambling platforms: while the player is taxed for each selling action transaction, they are unable to deduct their poker losses (since the winnings are tax-exempt)or the profits paid to the investor are (based on the FTA's interpretation). In practice this means that poker players could find themselves in a situation where the more poker tournaments that they lose, the higher their taxable income becomes (since each lost poker tournament means that the poker player has not returned the percentage of the buy-in covered by the "investor", thus resulting in a taxable income).
Because of the tax complexities of the gambling reform, it is important for gambling service providers to carefully plan in what form they make their games available to Finnish players, regardless of whether they intend to acquire a licence in Finland. It should also be noted that many of the tax questions that have been described above, such as "making games playable in Finland", non-deductibility of betting losses and taxation of "selling action" in poker have not necessarily been confirmed in Finnish case law, and the tax interpretations may therefore significantly change in the upcoming years.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
