As it celebrates its 60th anniversary in 2026, Paf, which is owned by the regional autonomous government of the Åland Islands in Finland, has gone through significant change. Starting out with two part-time employees and 51 gaming machines, Paf took to the seas in the 1970s by offering gaming on car ferries and passenger ships.
Soon, more than 95% of profits came from gaming at sea, though that changed in 1999 when Paf launched online, becoming one of the pioneers of online gambling. Today, the casino-first online arm is live in Sweden, Spain, Estonia, Latvia and Switzerland, while more than €500m has been given to causes benefitting society since Paf’s formation six decades ago.
There is more change on the horizon for Paf, as the operator gears up for the launch of the regulated commercial Finland market in 2027. CEO Christer Fahlstedt’s excitement is tempered with caution ahead of the last full monopoly model in the EU (Poland still has an online casino monopoly) opening its doors to competition. Fahlstedt – who passed the 10-year milestone in the role earlier this year – highlights the growing presence of the black market as one of the biggest industry-wide developments of his tenure so far.
Despite such defined boundaries, the scourge of unlicensed operators continues to plague gaming jurisdictions across the Europe. Even Switzerland, which Fahlstedt describes as “one of the most successful markets in Europe”, is susceptible to the ever-growing threat from the unlicensed market, with illegal operators “dwarfing” their legal counterparts.
Doing its best to ignore the noise of the black market, Paf continues to try to lead the way with regard to responsible gaming. Mandatory loss limits for customers over 25 were lowered to €15,000 (€30,000 eight years ago). The “long term” target is €8,000.
It’s a policy the operator is determined to follow through with, even if it’s to its detriment in the short term. When speaking to EGR, it’s evident Fahlstedt is thinking of the big picture, with a desire for more industry-wide collaboration a recurring theme.
EGR: You’ve recently reached 10 years in the CEO role. How would you sum up your time at Paf so far?
Christer Fahlstedt (CF): From my perspective, it’s been fantastic. It’s been great fun – as exciting today as it was 10 years ago. It’s never been boring or routine, and it doesn’t look like it’s going to be routine for a long time to come either. It’s been a fantastic journey.
EGR: How are preparations coming along for the Finnish market launch?
CF: We’re happy. We have not yet applied for the licence but we’re about to. For us, it was a case of mixed emotions. It’s clear this is the right thing for Finland. It’s the last country in the European Union to move towards regulation.
There are still a lot of unknowns about the market – there are many more unknowns than knowns. The details are so important. It requires a lot of understanding of the industry to make sure good intentions don’t turn into failure, and we are worried about that. It’s the right move [Finland regulating] and we jointly hope, together with the industry, this is going to turn out to be a good thing.
It would be nice to have more details […] I think it’s fair to say some of the regulations out there in Europe are not working and not achieving any of the things they should.
EGR: From what you know, what’s going to help or hinder the Finnish market?
CF: There’s a danger the regulations are too liberal and too strict at the same time. It’s too liberal in terms of marketing. I say that because we know what’s going to happen; people don’t like too much marketing, especially gambling marketing, and there’s a clear risk this is going to be the case in Finland. If this happens, it’s not good for us as an industry as we will have draconian measures imposed in response.
Regulation is difficult. If you make it too tight, you’re helping the black market; if you make it too loose, people are going to lose faith in the system, and it breaks down. What we’ve seen time and again across the European landscape is that when the population is annoyed with the level of gambling advertising, it becomes very difficult for stakeholders to have a cool head and make difficult judgement calls. We think that’s a clear risk in Finland. I would be positively surprised if in around 18 months after the market launches, we don’t have a big debate about there being too much advertising.
On the flip side, there’s a risk you make the market into something that’s unsustainable. Affiliates are banned for legal operators but, if you’re illegal, you’re free to use them. Being illegal and using the affiliate channel, which we know is always going to be there, is always going to be important. They’re basically all alone and there’s nothing stopping them – and this will be a problem. The Finnish authorities are competent in general – this is a well-run, well-organised country, and normally they get things right. The question is, how long will it take?
EGR: How are your online casino operations progressing in Switzerland with the Mycasino brand?
CF: In all our markets we are reasonably happy with how things are going. We’re not a startup; we’re an old company and we don’t see any exponential growth anywhere. We’re churning along and growing at the market rate. In Switzerland, with our partnership with Grand Casino Lucerne, we are still the clear market leader.
Switzerland is a prime example of what we were discussing. The regulated market works quite well, but you can also see the massive size of the unregulated market targeting Switzerland, which is likely dwarfing what’s inside [the regulated market].
We need to organise ourselves a little bit better, as it can’t continue like this. The Swiss, along with all these old jurisdictions, are ever so slowly working in the right direction, but it’s easy to become a bit frustrated with how long it takes.
EGR: How developed is the Swiss online market compared to other European jurisdictions?
CF: The Swiss market is one of the most successful markets in Europe. It started out really well and was really smart. They built on the land-based offering, which translated to online and gave them a big sense of comfort because they knew those operators. They were very well vetted, they trusted the ownership model, and there are the right people behind the money.
I also think they’ve been successful in limiting excess marketing, while all the tax revenues go to the pension system. They have a joint responsible gaming system which runs across operators. This is a well-liked and accepted regulation, which I think is far from the case in many European countries, where they have been struggling.
People don’t understand how much money is leaking out of the regulated market, but the realisation is gradually dawning on the authorities. Switzerland has a very solid base to build on, but they need to control the fact others are making an absolute killing from this very profitable player base, and they need to wake up to that.
EGR: Paf has been a champion of lowering players’ annual loss limits. What impact has this had on the business in terms of growth?
CF: It clearly has a negative short-term impact, but it’s also an investment. That’s the benefit of being 60 years old and our state-controlled ownership model. It’s a very long-term prospect and ambition. We’re pushing and forcing ourselves to change our business model to a certain extent. We can’t pay as much for new customers because we’re going to make, on average, less.
The idea is it forces us to build a structure that would be sustainable in these markets in the long term. One of the key things for us is it’s forced us to make a lot of tough decisions. We’re considerably fewer staff now than we were 10 years ago, and we’re a much bigger company. If we would have had access to this ‘easy’ revenue, maybe we wouldn’t have made those tough decisions, but maybe we wouldn’t have been as competitive as we are today. It’s very popular policy within the company, and it’s clear this is the way we should do it.
EGR: Spain has introduced a joint deposit limit system for players, with customers permitted to deposit a maximum of €3,300 per month across all their accounts with multiple operators. This joined-up approach is something Paf has previously advocated for. How much of an impact will this have?
CF: Everybody who knows gambling knows that players, especially players who have an interest in gambling, will have many active accounts at the same time. All regulations today, with some notable exceptions, look at things through an operator-by-operator lens. That only allows you to look through a keyhole to see what’s happening in one place, but you don’t have any idea what’s going on with other platforms, and you don’t keep track of how much a player may have won or lost. That approach clearly has a lot of issues.
First of all, it doesn’t really protect the player. It even forces the player to move between operators because at some point they will hit a limit in one place and then move somewhere else where they have no history and start all over again. It’s actually worse for the player, but it’s also worse for the industry. Depending on how much risk you’re willing to take interpreting the rules, you can get a very substantial financial upside by being more aggressive.
The industry needs to feel that it isn’t a competitive advantage to be more reckless with the customer, but that’s always going to be the case until you have a joined-up way of thinking. Deposit limits are a good starting point. Over time we need to end up with a centralised system where a lot of the affordability requirements are set on a national level so it’s the same for everybody.
EGR: If you were to push for one measure that would benefit the gambling industry as a whole, what would choose?
CF: What I would like to see is all the serious regulated online players in Europe come together and have a joint understanding. When we talk to payments and games providers and one of those providers also serves a black market targeting any of the European markets that we’re in, we all commit to not using that provider whatsoever.
We need to ‘unionise’ here because if we are waiting for authorities to do this for us, there’s a big risk we will be having this discussion in 20 years’ time and nothing has changed. There have been some moves in this direction, but I think we all feel this frustration. We could bunch up and demand that if a company wants to provide slot games or payments for the UK, Swiss, German, Swedish, Finnish markets, for example, they cannot also serve the crypto casinos targeting those markets.
I think what’s happening in the UK could be the catalyst that gets this thing in motion because now it’s really getting tough there. We have some of the really big players exposed to the biggest market in Europe, which is the UK market, and now the gloves need to come off. It can’t be that the providers make as much money – maybe even more money – serving the industry outside and inside.
All the former monopolies would gladly join on this but it takes leadership from the giants of this industry, and it would be great to see that. Paf would certainly sign up for it, and I think it would be a great thing for the industry as a whole.
The post Paf CEO on enduring short-term pain for long-term benefit of the state-owned operator first appeared on EGR Intel.
Christer Fahlstedt talks to EGR about “mixed emotions” ahead of the Finnish market launch next year, and why Swiss authorities need to wake up to unlicensed operators “making an absolute killing from a very profitable player base”
The post Paf CEO on enduring short-term pain for long-term benefit of the state-owned operator first appeared on EGR Intel.