Discussing the role of Lotteries in Modern Society: John Volkers in VK

Dutch sports are largely financed by De Lotto. But it is having some troubles, which has caused budget cuts for the sports associations. Is there an alternative?

By

JOHN VOLKERS

john volkers 2

During the weeks that the serious financial predicament of the national Dutch sports federation NOC*NSF is in the news, Marcel Wintels, president of the cycling union KNWU, would like to remind the sports world of his idea of a different, alternative way to finance sports. He would like to exchange the current dependency on the fluctuating games market for a solid umbilical cord with the national government, specifically, the Ministry of Health, Welfare and Sports (VWS).

Wintels articulated his opinion about more financial sustainability in an elaborate November brief this month, after an initial introduction last summer. It was sent to sports federation NOC*NSF (the distribution station in Dutch sports, ed.), the 76 sports associations in the country and to involved parties, such as the political parties, on behalf of himself and the KNWU. The political parties already need ammunition for the 2017 election campaigns.

Wintels is an entrepreneur, manager and politician (of the CDA). In his memorandum entitled Financing Sports he outlines: the past, present and future (picture) of the critical position of government financing. The national government has outsourced this largely to games organization De Lotto, which annually pays three quarters of its profits to the 76 associations and to sports federation NOC*NSF – a sum of between 40 and 50 million Euros.

‘It is remarkable that the financing of the sports associations is dependent on a gambling business, but and explanation can be found in history. The National Sports totalizator, better known as De Lotto, was founded by sports and for sports people about fifty years ago. The question is whether in 2015 (…) such financing of sports still makes sense and whether it is future-proof,’ Wintels writes to his sports colleagues.

For the historical connection, he refers to the 2007 White Paper on Sports by the EU-Commission, which asked the European member states to ‘think about and work towards a more sustainable financing model that can serve to support sports organizations in the longer term.’

In Great Britain and Italy, national sports, in particular the top sports, are still closely connected to the profits of lotteries and (football) pools. In the Netherlands is it much the same. With De Lotto’s declining revenues, which started in the Olympic year 2012, the organization of the desired ‘top ten country’ the Netherlands has come under a lot of pressure. For 2016 economic measures have again been imposed for the Olympic operation of Rio: minus 10 percent is the status quo.

In addition, the medal bonuses will be lowered by 15 percent. 30 mille premium will be 25, along with 5 bills of 100. There is no High Performance Center in Rio. In London that was the key of the Netherlands’ success, the example for all those other progressive countries in the prestigious world of the Olympic Games. Another budget cut: gatherings like the team transfer, the ‘Welcome Home’ and the Sports Gala have had their subsidies cut considerably.

These are details in a loudly sighing sports world, from which, strangely enough, came the message this week (Monitor 2014) that the number of associations with financial problems is decreasing. In particular the large associations are now using their capital; their backup.

In this divided field, Wintels’ plea remains. For reasons of principle, he wants to distance himself from the gaming market, especially because of the increasing gap between sports and gambling, particularly in the future. ‘The gambling market is opening further, is becoming more and more global and online. It is turning into a business with major stakes. It revolves around revenue models of the online gambling market. It is far removed from what matters to sports organizations.’ Things will go better for De Lotto for a while after the merger with the State Lottery that is expected to happen in December. Wintels, in his letter: ‘De Lotto has insufficient status on its own and will soon (if the competition authority ACM gives its approval) be sold to another state and gambling business: the Dutch State Lottery. (…) This will make De Lotto disappear into a major Dutch state business, which Minister Dijsselbloem is responsible for and on which sports will become dependent.’ Dutch sports have put their hope into this merger for many years already, ever since the decrease in Lotto monies. Wintels says he does not understand the ‘interim step’ of two businesses that cannot survive on their own, but believes sports are being put at risk. ‘They will become a small component of a big state business, with 99% of its shares in the hands of the Dutch state.  NOC*NSF’s 1 percent will have no vote.’

A quarter of the profits of the merged business will go to sports. Director Kuipers of De Lotto also believes that during the first two years, the remittance will once again rise to 50 million Euros. But Wintels reads in the cabinet brief of October, that the state no longer sees ‘offering gambling’ as the government’s job.  ‘What that means is obvious: a large foreign private party will buy market access and position in the Netherlands via the State Lottery/De Lotto.’

That is why the logical moment to change the relationship between sports and State is now nearing. Wintels emphasizes that sports largely finance themselves (from contributions and sponsor donations, plus municipal monies). The relationship between sports and state must become sustainable. If sports are valued in this society, Wintels believes, there must be a normal, direct financing relationship between sports and VWS or the national government.

The minister of Finances must have his hands free for his state and gambling businesses. Wintels in his memorandum: ‘Don’t let sports become a complicated player in that government game. This can easily be realized with a neutral budget: the sports sector should be disconnected from the merger company State Lottery – De Lotto and forego the approximately 50 million annual profit payment. That profit will remain as extra profit for the Ministry of Finances. In its place, the Ministry of Finances should provide to VWS a new sports budget of the same scope.’

Everything revolves around appreciation of sports. Sports must show its power and realize that it gets paid for that.

Wintels says he feels supported in his plans, which CDA colleagues, such as Jack de Vries and Camiel Eurlings, still represented in the NOC, are partners in. ‘Really, there are supporters. If I felt that I was alone in a barren desert, I would not be writing this letter.’