Audit blames innovation drive for Norsk Tipping’s lottery mistakes
The Norwegian lottery operator’s focus on product development led to compromises on quality and control mechanisms, PwC says.
Norway.- An audit of state monopoly gambling operator Norsk Tipping has concluded that its spate of technical and regulatory blunders were the result of a focus on innovation and product development. PwC says this led to compromises in internal quality and control mechanisms, contributing to a series of operational failures.
The Norwegian gambling regulator Lotteritilsynet has issued a series fines against the operator in the past year due to violations of the Gambling Act and gambling regulations, including for breaches of self-exclusion requirements and for drawing the wrong winners in the national additional prize in Eurojackpot and Superdraw over several years.
Just last week, the regulator announced another fine, this time over an error in the Superdraw on April 19 that resulted in 52 incorrect winners of high prizes being drawn. It’s also considering a fine of up to NOK 10m for an error that occurred in connection with the Eurojackpot draw on June 27, when players was informed of prize amounts that were significantly higher than the actual amounts.
Norsk Tipping’s board commissioned PwC to assess its main lottery products, Lotto, Vikinglotto, and Eurojackpot, which were the subject of many of the problems. PwC’s report has concluded that Norsk Tipping disproportionately allocated resources to innovation “at the expense of quality and control.”
The audit says that internal maintenance and control were, at times, deprioritised in favour of technological advancement. It also raises concerns about leadership clarity and accountability, describing the division of responsibilities as “unclear” and supplier oversight as “insufficient.” Former CEO Tonje Sagstuen stood down in June, with Vegar Strand, former director of strategy, analysis and business development, stepping up on an interim basis.
PwC noted that some new measures have been initiated, including before the public disclosure of some recent failures. Since May, Norsk Tipping has redirected its operational capacity, including over 150 employees, towards stabilising existing systems. It’s also included stricter controls within lottery operations and replaced manual checks with automated systems to reduce human error. Under external leadership, the company also conducted a review of critical processes, resulting in the implementation of 300 quality improvements.
Responding to the report, Strand said: “We take the report very seriously. It’s important once again to apologise to our customers who have been affected by these errors. Even though a lot works well, the report shows that we have had too many vulnerabilities. We’re fixing that. Every stone will be turned to ensure we both learn from our mistakes and build a new and better Norsk Tipping.”
Board member Sylvia Brustad said: “The report shows where we need to improve, but also that important measures were implemented over seven months ago. The board takes this extremely seriously and will closely follow the ongoing work. We are confident that the company has learned from its mistakes and the improvement efforts will lead to a new and stronger Norsk Tipping in the future.”
A separate review by KPMG focusing on the Eurojackpot draw error on June 27 found no absent procedures but raised concerns over operational erosion. “There does not appear to be a lack of routines per se, but rather these have gradually been diluted and weakened operationally over time,” it states, again mentioning an excessive emphasis on “innovation, speed and performance” at the cost of control and quality assurance.
