Minister of Science and Culture Antti Kurvinen (Cen) has proposed that revenues from the state-owned gambling monopoly, Veikkaus, be transferred to the state budget.
On Saturday Kurvinen said that the betting agency's income is declining, and without a change so will the income of charities and other groups that benefit from its profits. Veikkaus revenues are distributed to organisations in the fields of culture, sports, science, and youth work as well as social welfare and health.
Kurvinen proposed making the change from the beginning of 2024.
Kurvinen, who became Minister of Science and Culture at the end of May, said that he has researched the issue of Veikkaus' income distribution during the summer and discussed it with several beneficiaries of gambling revenues.
"My view is that from the beginning of 2024, Veikkaus' income should be transferred to the state budget in the same way as, for example, Alko transfers its own dividends and income to the state budget, from which they are used for good purposes," Kurvinen told the Finnish News Agency STT.
Kurvinen said that he has reached the same position on the matter as a working group chaired by former Bank of Finland Governor Erkki Liikanen, which last spring proposed a comprehensive reform to divert gambling revenues to general government revenue and transfer current beneficiaries to the budget framework procedure.
Veikkaus income declining
The need for reform is due to Veikkaus' declining income. This is due to a drop in slot machine revenues because of the coronavirus pandemic, as well as measures taken to tackle gambling addiction.
"Without a clear change and reform, we will find ourselves in a situation where the income of Veikkaus' beneficiaries is constantly falling. This is about the income of Finnish science, culture, youth organisations and especially sports and exercise," Kurvinen said.
According to Kurvinen, the distribution of Veikkaus revenues through the budget would bring predictability to cash flows, which is essential for beneficiaries.
"Recent years have shown that we are in a strange situation here: the success of a Finnish gaming company determines what kind of resources there are, for example, for top Finnish sports and youth sports or for high-level Finnish research. This creates a strange, uncertain situation," Kurvinen noted.
More power for politicians?
The problem with the new way of distributing Veikkaus' revenues has been that it would make the funding of beneficiaries dependent on political decision-making.
Kurvinen does not deny that the change would increase the role of political decision-making, but said he considers that a lesser evil than the uncertainty and funding cuts that lie ahead if no reforms are made.
"In the long run, however, it would be clearer and less problematic to make political value decisions than for the success of Veikkaus' business to be the determining factor in how many opportunities there are for young researchers in Finland or how much art is funded in Finland," Kurvinen said.
Kurvinen declined to comment on the broader questions of reforming the Lotteries Act or reducing the harms of compulsive gambling.
"There is one question about how betting proceeds are distributed and there is another question about where slot machines are located, how they're used and what kind of lottery law we have," Kurvinen said.
According to Kurvinen, the distribution of Veikkaus' income can justifiably be equated with the distribution of the income of another state monopoly company: alcohol retailer Alko. According to Kurvinen, the two companies are similar in that both offer products that cause human suffering when used to excess.
It is therefore justified that they should also be treated in the same way, he argued.
"Alko profits are not earmarked for substance abuse education or social and health care costs, for example, but go straight into the state budget," he pointed out.
According to Kurvinen, the government has agreed to set up a parliamentary working group to consider how Veikkaus income will be distributed.
As the matter involves several other ministries besides the Ministry of Education and Culture, the prime minister's office is responsible for steering the issue.
"I hope that a working group will be set up as soon as possible. It's not too late yet, but time is running short," Kurvinen said.