Norsk Tipping’s focus on innovation and new product developments led to issues across quality and control at the operator, something that in turn resulted in several recent major errors, an audit report by PwC has found.
Norsk Tipping has been hit with a series of sanctions in recent months due to issues across its lottery games. In total, the operator faces having to pay out more than NOK110 million ($11 million) in financial penalties.
Following the failings, the Norsk Tipping board instructed PwC to review its largest lottery products and the central focus of its recent failings, Lotto, Vikinglotto and Eurojackpot.
Core findings by PwC revealed that Norsk Tipping had focused too much of its time and efforts on innovation and new developments “at the expense of quality and control”.
PwC also questioned Norsk Tipping’s leadership and the division of responsibility, describing this as “unclear” at the operator. In addition, it flagged “insufficient” follow-up of suppliers.
Going into more detail, PwC said that, while Norsk Topping has an “extensive” control framework, there were weaknesses within the system. These included the balance between innovation and stable operations, clarity of roles and responsibilities, supplier follow-up and systematic handling of deviations.
PwC added that, at times, maintenance and internal control were not prioritised over new technology development.
“We take the report very seriously,” said acting CEO Vegar Strand. “It’s important once again to apologise to our customers who have been affected by these errors.
“Even though much 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.”
Signs of improvement at Norsk Tipping
The report noted some of the actions already taken to rectify the concerns. Some of these, it said, were implemented back in February of this year, prior to the details of the failings coming to light.
Detailing these actions, PwC said Norsk Tipping had postponed some of its development work and, since May, the operator has directed all available resources, including over 150 staffers, to improving current operations.
Meanwhile, Norsk Tipping has also implemented tougher controls into its lottery processes, with more oversight during execution. This includes replacing manual checks with automated systems to cut out human error.
In addition, under external leadership, the operator reviewed critical processes to identify and eliminate any risks of errors or legal breaches. This, PwC said, led to 300 small and large quality measures and improvements being implemented.
Aside from this, previous Norsk Tipping CEO Tonje Sagstuen resigned from her post back in June. Vegar Strand, who previously held the role of director of strategy, analysis and business development, has been at the helm on an interim basis ever since.
“The report shows where we need to improve, but also that important measures were implemented over seven months ago,” Norsk Tipping board member Sylvia Brustad said. “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.”
KPMG raises concerns over priorities at Norsk Tipping
Alongside the PwC report, KPMG carried out its own review of Norsk Tipping’s operations. It focused specifically on errors within its Eurojackpot draw, which resulted in 47,000 players being incorrectly notified they had won excessively high prizes on 27 June.
Norsk Tipping could yet face a NOK10 million penalty over the issue, subject to a final decision by Norwegian gambling regulator Lotteritilsynet.
“There does not appear to be a lack of routines per se, but rather that these have gradually been diluted and weakened operationally over time, as the organisation has undergone repeated structural changes, shifting priorities and reallocation of personnel, responsibilities and areas of expertise,” KPMG said of its investigation.
“In continuation of this, the work environment is described as one where innovation, speed and performance have been prioritised too much over control and quality assurance.”
The Eurojackpot case was one of several recorded in recent months at Norsk Tipping. Its largest penalty fee was set at NOK46 million earlier in September for a technical failing related to Eurojackpot and Lotto. The regulator found players in cooperatives, gaming clubs and cooperative banks had a greater chance of winning than they should have had.
A separate penalty of NOK36 million was announced in March after a bug prevented self-excluded players from blocking themselves from their Norsk Tipping accounts. This followed a NOK2.5 million fine in 2024 after the company mistakenly paid a player NOK25 million in incorrect winnings.
In addition, in late September, Norsk Tipping was informed it could face another penalty of NOK25 million. This would be in relation to 52 players being incorrectly drawn as winners of million-krone prizes during a “super draw” on 19 April this year. This, Norsk Tipping said, was due to a technical error within its lottery system.
PwC said Norsk Tipping had prioritised new development and innovation over quality and control.