Regulation

Finnish consumer authority: Veikkaus revenue should be directed to treasury

3 minutes read
The Finnish Competition and Consumer Authority (KKV) has determined that Veikkaus’ revenue should go towards the treasury rather than specific beneficiaries, in its final report on the operator’s gambling monopoly.

The KKV’s overall assessment was that the reform of Finnish gambling was “on the right track”. However, it said, there is still room for improvement and that Veikkaus should have prevented and reduced gambling-related harm “in a more targeted way than has happened”.

It said that one way to facilitate this improvement would be by making Veikkaus revenue go into the treasury instead of directly towards certain funding areas.

Currently, just over half of Veikkaus revenue goes to the Ministry of Education and Culture for sports, science and arts funding, while 43% goes to the Ministry of Social Affairs and Health for improving health and social welfare. A further 4% is used to fund horse racing through the Ministry of Agriculture and Forestry.

However, the KKV said this created a situation where any efforts to reduce gambling harm risked leading to underfunding for these areas.

“If active efforts are made to reduce gambling disadvantages, Veikkaus beneficiaries will not be able to anticipate their funding, as reducing gambling disadvantages is likely to have an impact on the amount of Veikkaus revenues distributed to beneficiaries,” KKV research professor Mika Maliranta said. “On the other hand, if the gambling monopoly does not actively seek to reduce harm, the monopoly system does not meet the purpose or justification of the law. 

“This contradiction has hampered the social debate about Veikkaus’ responsibility”.

The KKV added that the change would bring “predictability and stability” to the funding of Veikkaus’ current beneficiaries.

In addition, the KKV said Veikkaus’ governance should come under the power of the Ministry of Social Affairs and Health (STM) rather than the Prime Minister’s Office.

“STM is already responsible for monitoring, researching, evaluating and developing prevention and treatment of gambling disorders,” the KKV said. “Thus, it would be best placed to steer the company in a direction where gambling causes less harm to individuals and society. 

“This is also in line with the state’s corporate governance principles. The solution would be in line with the alcohol policy, as STM is also responsible for [state-owned alcohol retailer] Alko Oy’s corporate governance.”  

In addition, the KKV said further reform of the Finnish monopoly system should be undertaken in a data-driven manner, and that Veikkaus’ own data should be made available to the research community.

The KKV has issued a series of reports on Veikkaus in the past. In September of last year, it determined that the monopoly broke Finland’s Procurement Act by making substantial changes to its supply contract with International Game Technology (IGT).

In 2019, the KKV argued that there should be a central regulatory body for the country’s gambling sector as it said the current framework was not fit for purpose.

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