Reduced gambling tax receipts leave social care projects unfinanced

Euro cent coins.
Euro cent coins. Source: Jonathan Brinkhorst/Unsplash

As casinos have been closed and struggling during the coronavirus pandemic, the Ministry of Social Affairs has canceled funding rounds for projects supposed to be financed with resources received from the gambling tax, leaving dozens of healthcare and social care projects without state support.

Breastfeeding home counseling visits, therapy for traumatized children, counseling services for young people at risk for mental illness, organizing support for disabled persons smart technology awareness, the Elderly Festival - these are just some examples of projects which received state funding up to €10,000 at the start of 2020.

This year, just one of the four application rounds took place before the coronavirus pandemic swept the nation and an emergency situation was announced on March 12, leading to casinos being closed which is where most of the funding for these small projects comes from via the gambling tax. The number of lotto players also decreased, leading tax receipts to dry up considerably.

The Ministry of Social Affairs has decided to suspend the remaining three application rounds for state support for small projects until the end of 2020.

Deputy Secretary General of the Ministry of Social Affairs Rait Kuuse said the first application round of 2021 will also be canceled because tax receipts will not have recovered by then.

Kuuse told ERR: "Lotto playing numbers have increased a little, a small increase was seen before the summer according to the latest data but tax receipts are still down by a quarter. We predicted €4.5 million in tax receipts for the year but we will likely finish at €3.8-4 million."

Funding rounds for small social field projects happen each quarter and a total of some €100,000 is allocated for one round, adding up to close to €400,000 each year. But the decrease in gambling tax payments leaves a hole of €500,000-700,000 in the budget.

Kuus emphasized that third sector advocacy projects are still being financed, only small projects have been affected.

He said: "We have not given up any long-term contracts, but we have not announced any funding rounds for small projects. I can't see us being able to announce any this year or the start of next year either. We turned to the government at the start of the emergency situation for support due to the decrease in gambling tax receipts but there has not been a positive decision yet."

Small projects aiming to provide healthcare and social care services receive funding from the Ministry of Social Affairs. Some pilot projects have even become state strategic partnerships over the years. For example, women's support centers in Estonia no longer have to rely on the gambling tax but are now financed through contracts instead.

Kuuse explained: "If some services begin as a project but are in higher demand later, we will assess further support measures to pick them out."

The issue of funding projects through the gambling tax came up in July when the Ministry of Finance suspended financing for three projects promoting equality on July 13.

After a long line of disagreements and arguments between Minister of Social Affairs Tanel Kiik (Center) and many representatives of coalition EKRE, including Minister of the Interior Mart Helme and Minister of Foreign Trade and IT Raul Siem, the Ministry of Social Affairs paid out funding for the three projects.

The Ministry of Finance's justification for suspending payments was that the cannot make payments from funds received from the gambling tax to projects that do not correspond to the areas specified in the Gambling Tax Act.


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Editor: Kristjan Kallaste

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