Finnish Audit Office Questions Gambling Grants

September 8, 2022
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Finnish government authorities have been told to be more transparent when awarding grants from state-owned monopoly Veikkaus' proceeds, as the operator warns of a need to explore a licensing system if its market share continues to fall.

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Finnish government authorities have been told to be more transparent when awarding grants from state-owned monopoly Veikkaus' proceeds, as the operator warns of a need to explore a licensing system if its market share continues to fall.

The current process to award government grants is done “essentially in compliance with legislation, but there are shortcomings in the supervision”, according to a report published by the National Audit Office of Finland (NAOF) on August 31.

The Ministry of Education and Culture, the Ministry of Social Affairs and Health and the Ministry of Agriculture and Forestry are responsible for awarding the grants, which have become of increasing political interest over the past few years.

Any grant awarded to a social or health organisation is overseen by the Funding Centre for Social Welfare and Health Organisations (STEA), which operates in connection with the Ministry of Social Affairs and Health.

“The audit found that the procedures the government authorities apply in the management of the grants differ from each other in several respects. There are also differences between the government authorities in how they take the effectiveness of the supported activities into account at different stages of the grant process,” according to the NAOF’s report.

In order to address these shortcomings, NAOF made five key recommendations, including improving transparency by introducing a clear continuum from the processing of a grant application to the grant decision published alongside detailed justifications.

Beyond transparency, the government has also been told that grant authorities should tighten their supervision of grants to ensure organisations comply with their requirements.

In particular, the Ministry of Agriculture and Forestry has been told to “pay attention” to monitoring grants awarded to the horse industry.

Last year, the Finnish government looked to set aside around €332m in its budget to ensure non-government organisations (NGOs) did not miss out on any funding because of declining Veikkaus profits.

Now in its latest report, the gambling monopoly's managing director, Olli Sarekoski, suggested a licensing system could be beneficial and fair if Veikkaus' share of the online gambling market in Finland continues to trend downward and below 50 percent.

Veikkaus' profit was €680.2m in 2020, a 32.6 percent drop compared with 2019. In 2021, profit remained around €680m.

In its latest financial update, Veikkaus recorded a profit of €330.8m for January to June 2022, a year-on-year increase of 2.3 percent, despite gross gaming revenue dropping by 2.1 percent to €515.9m.

During the first half of 2022, Veikkaus launched its new B2B subsidiary Fennica Gaming, which since April has begun delivering services to Norsk Tipping and Svenska Spel.

Separately, the monopoly has recently called for the launch of compulsory authentication for all ticket-based games to be delayed until January 1, 2024, due to what the operator referred to as a “worldwide shortage” of components.

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