Kela, the Social Insurance Institution of Finland, has recently unveiled new updates to its guidelines regarding winnings from gambling and their impact on social assistance eligibility. The revised guidelines mark a significant change in how gambling earnings are considered in the calculation of social aid, offering a more comprehensive approach to ensure that the recipients are not financially burdened due to temporary gains from gambling.

Kela Announces Updates to Guidelines on Gambling Winnings and Social Assistance

New Approach: Net Winnings as a Determinant for Social Assistance

The key change brought forward by Kela is the shift to evaluating net winnings from gambling, as opposed to the previous practice of only considering gross winnings as income. Under this updated policy, Kela will now take into account the net earnings — which is the difference between the total amount won and any losses incurred — when determining the level of social assistance a person is eligible for.

This approach allows Kela to gain a clearer and more accurate picture of a recipient’s financial standing. Net winnings offer a fairer assessment, particularly for individuals who engage in gambling but may not consistently gain significant financial benefits from it. This adjustment ensures that those in need of financial aid are not disadvantaged by occasional or one-off winnings.

 View on Gambling Winnings

In addition to the focus on net earnings, Kela’s revised guidelines adopt a longer-term perspective when reviewing gambling winnings. Instead of looking at one-off gambling transactions, Kela will consider winnings over an extended period. This ensures that individuals who might experience fluctuations in their gambling activities will not face immediate or disproportionate reductions in their social assistance.

By analyzing winnings over time, Kela seeks to better understand a person’s overall financial trajectory, reducing the risk of punitive actions against individuals who rely on social assistance but occasionally participate in gambling activities.

Protecting Vulnerable Individuals: The Core of Kela’s Policy

The rationale behind these changes is rooted in a desire to prevent financial hardships for those dependent on social aid. Kela’s Benefits Manager, Marja-Leena Valkonen, has emphasized the need to balance the freedom of recipients to manage their own finances with a responsibility to protect those most vulnerable to gambling-related harms.

Valkonen stated, “We at Kela do not tell our customers how they should use their social assistance, but naturally we are concerned if people with a low income use their money on gambling.” She further added that social assistance is meant to cover essential living costs, such as rent, food, and utilities, and it is crucial that these needs are met before any funds are diverted towards gambling.

Social Assistance and Gambling: An Ongoing Concern

According to Kela, approximately 5% of those receiving social assistance in Finland use part of their aid for gambling. While this figure may seem small, it raises significant concerns, particularly for individuals who may find themselves in deeper financial distress as a result of gambling losses.

Finland’s gambling landscape has changed considerably in recent years, and Kela’s decision to update its guidelines reflects a growing awareness of the potential social and financial impacts of gambling. These updated policies aim to help individuals avoid escalating financial difficulties and, at the same time, ensure that social assistance is distributed in a way that truly benefits those in need.

A Step Toward Harm Prevention

In line with the Ministry of the Interior’s draft gambling legislation introduced earlier in 2024, Kela’s updated guidelines also align with the broader goals of reducing gambling-related harm in the country. The draft legislation aims to end Veikkaus Oy’s monopoly on betting and online casino games in Finland, opening up the market to new operators and potentially increasing the prevalence of gambling opportunities for the public.

As Finland moves towards a more competitive gambling market, it is increasingly important to safeguard those vulnerable to gambling addiction or financial mismanagement. Kela’s initiative reflects a proactive approach to these challenges by providing a system that ensures individuals are not penalized for occasional gambling activity but are still protected from its potential harms.

The Role of the Finnish Government in Gambling Regulation

Kela’s decision comes at a time when gambling regulations in Finland are under close scrutiny. The new gambling act, which seeks to dismantle the monopolistic structure held by Veikkaus Oy, will introduce sweeping changes to the Finnish gambling industry. This act is poised to regulate betting, online slot machines, and casino games, among other activities, under a more diverse operational framework.

The Ministry of the Interior has expressed the importance of striking a balance between increasing competition in the gambling market and mitigating the negative effects of gambling. As more companies enter the market, the potential for gambling addiction and financial mismanagement could increase, making Kela’s updated guidelines all the more critical in the coming years.

Conclusion: Approach to Gambling and Social Aid

Kela’s updated approach to handling gambling winnings and social assistance represents a significant step in ensuring that individuals who rely on social aid are treated fairly and compassionately. By focusing on net earnings and adopting a long-term view, Kela aims to prevent further financial strain for recipients and provide them with the support they need.

FAQs About Kela’s Updates Regarding Gambling Winnings and Social Assistance

1. What changes has Kela made regarding gambling winnings and social assistance?

Kela has updated its guidelines to consider net gambling winnings rather than gross winnings when determining eligibility for social assistance. This means Kela now looks at the overall net profit from gambling, factoring in both wins and losses, to ensure a more accurate reflection of a recipient’s financial situation.

2. Why is Kela focusing on net gambling winnings instead of gross winnings?

By focusing on net winnings, Kela aims to provide a fairer assessment of an individual’s financial situation. This prevents recipients from being unfairly penalized for occasional gambling wins while ensuring that social assistance is distributed to those truly in need.

3. How will Kela evaluate gambling winnings over time?

Kela will review gambling activity over a longer period rather than focusing on one-off winnings. This approach helps to better assess the overall financial situation of recipients, reducing the risk of punitive actions against those who might experience fluctuations in their gambling activities.

4. What percentage of social assistance recipients in Finland use their aid for gambling?

According to Kela, approximately 5% of social assistance recipients in Finland use a portion of their aid for gambling purposes. This has raised concerns about the financial well-being of vulnerable individuals who might face further difficulties due to gambling.

5. What is the purpose behind Kela’s new guidelines?

The primary goal is to prevent financial hardship for social assistance recipients. By evaluating net gambling earnings and considering winnings over time, Kela seeks to protect individuals from gambling-related harm while ensuring they still have access to the necessary financial support for daily living expenses.

6. How does this update align with Finland’s new gambling legislation?

Kela’s updated guidelines are consistent with broader efforts to reform Finland’s gambling industry. The government is working on legislation to end Veikkaus Oy’s monopoly, which will introduce new competition in the market. Kela’s policies aim to protect vulnerable individuals as the gambling market evolves.

7. What role does gambling play in the current financial landscape in Finland?

With recent changes in Finland’s gambling legislation, the gambling market is becoming more competitive. This could increase gambling opportunities, making it crucial for agencies like Kela to take steps that prevent gambling-related financial harm while supporting those in need.

8. Will this update impact recipients who gamble occasionally?

Yes, but in a way that protects them. Kela’s long-term view of gambling winnings ensures that occasional gamblers are not penalized for temporary or small winnings, allowing for a more comprehensive review of their financial situation over time.