Finland’s Veikkaus under fire for no-bid IGT gambling contract


finland-veikkaus-igt-no-bid-gambling-contractFinland’s state-run gambling monopoly Veikkaus is under fire for awarding a multi-year, no-bid supplier contract to International Game Technology (IGT).

On Monday, Finnish media outlet YLE reported that Veikkaus had awarded IGT a multi-year deal in autumn 2018 worth “tens of millions of euros.” The deal, which involved running Veikkaus’ online and retail lottery, sports betting and bingo platform, was for an initial eight-year term with three additional four-year extension options.

YLE’s investigative program MOT said Veikkaus had discussions in summer 2018 regarding its platform, which eventually led to IGT presenting the Veikkaus board of directors with two deal options, one of which was accepted without Veikkaus ever putting the contract up for a competitive bidding process.

Veikkaus director of legal affairs Pekka Ilmivalta told MOT that the deal was “a continuation of an old agreement where it was not necessary to have a separate tender.” But MOT obtained information it claims reveals that Veikkaus wanted to keep the deal out of the eyes’ of Finnish competition authorities, saying the company wanted to “keep a low profile” to minimize risk.

An external law firm told MOT that competition authorities would have been very interested had Veikkaus sought a direct procurement of services. Even modifying an existing deal would have been “overall probably illegal” but apparently offered enough legal wiggle room for Veikkaus to feel it could proceed without a competitive tender.

In June 2019, IGT announced it had reached a deal to supply Veikkaus with its PlayRGS remote game service solution and PlayCasino game content. The deal was for an initial term of four years with optional one-year extensions.

Veikkaus appears to be starting 2020 on the same wrong foot on which it spent most of 2019, which saw the company lambasted for running radio ads suggesting bettors satisfy the voices in their head urging them to gamble. A growing slice of the Finnish population believe it’s time for the government to consider an end to Veikkaus’ gambling monopoly.

In response, Veikkaus embarked on a reputational cleanup, announcing plans to significantly reduce its number of retail slot machines while accelerating plans to require slots jockeys to insert government-issued identification cards in order to access slots play. Veikkaus believes these efforts will ultimately reduce its annual earnings by up to €50m.