An investigative report from Yle.fi’s MOT program reports that Finland’s state gambling monopoly, Veikkaus, signed a multi-million-euro deal with a multinational gaming firm IGT without undergoing a competitive bidding process.
The deal involved Veikkaus’ core gaming system, which runs products such as the weekly lottery.
According to MOT, Veikkaus made an eight-year deal with IGT, with options to extend it for three four-year periods. MOT calculated that the deal was worth tens of millions of euros.
“This was not a material amendment to the agreement, but a continuation of an old agreement where it was not necessary to have a separate tender,” said Pekka Ilmivalta, Veikkaus director of legal affairs and corporate social responsibility.
In 2018, Veikkaus top management discussed a deal to maintain its core gambling system, used to run lotteries and sports betting games that are played online and at thousands of locations across Finland. The company board was eventually presented with two options for signing a deal with IGT without a competitive tender. In autumn of that year, CEO Olli Sarekoski signed a 20-year-deal with IGT. There was no bidding involved.
According to a law firm that spoke to MOT, a direct procurement would have been illegal, and a modification of an existing agreement would have been “overall probably illegal,” albeit possibly with legal elements.
“The known acquisition risk was taken into consideration during negotiations on the agreement in autumn 2018,” Veikkaus told MOT. According to information obtained by MOT, Veikkaus attempted to conceal the deal from competition authorities, but saw no need for “active” external communications about the proposed agreement. The company confirmed it wanted to “keep a low profile” on the deal.
The state gambling monopoly has come under fire in recent times for a series of missteps, including what some saw as a cavalier approach to advertising, and the prevalence of slot machines in public spaces, MOT reported. The company committed to setting up an ethics board to guide advertising and announced that it would be removing 3,000 slot machines. It also said it would trim executive bonuses if problem gambling does not improve in Finland.
Finns spend about €2 billion (US$2.2 billion) on gambling each year.
