Veikkaus’ financial profit for the first half of the year remained at last year’s level

in Finance

January – June 2021 for Veikkaus:

  •  Veikkaus’ financial profit was EUR 330.2 million (-0.8% as compared with January – June 2020) and the lottery tax was EUR 28.8 million (-60.5%). The lottery tax percentage was dropped from 12% to 5.5% for a fixed period of one year as of 1 January 2021.
  •  The gross gaming revenue amounted to EUR 527.1 million (-13.2%). The restrictions and special arrangements due to the coronavirus pandemic had a major impact on the business.
  •  Of the gross gaming revenue, 45% came from the retail outlets, whereas the share of the digital channel was 55% (+10.6 percentage points). The growth of the digital channel was especially due to a decrease in the share of point-of-sale gaming, resulting from slot machine closures.
  •  The share of authenticated gaming out of all gaming in January–June was 73.7% (+12.2 percentage points).
  •  The Finnish gaming market totalled an estimated EUR 720 million (-8%) in terms of the gross gaming revenue during the period between January and June. Veikkaus’ share out of the total market was ca. 73% (-5 percentage points).
  •  The total volume of expenditure on Veikkaus’ games was ca. EUR 3.2 billion during the period between January and June.

The profit from Veikkaus’ gaming operations, i.e., the gross gaming revenue, was EUR 527.1 million (-13.2%) for the period between January and June. A major reason for the drop was the Covid-19 pandemic. According to Veikkaus’ estimates, the pandemic impacted the gross gaming revenue by ca. EUR -150 million during the first half of the year.

The pandemic hit the slot machines hardest, as they lost 67.1 percent of their gross gaming revenue (EUR 45.4 million) as compared with the respective period last year. Due to various measures resulting from the pandemic, the slot machines were closed for a total of about four months during the period under review, depending on the level of the epidemic in the different areas. The gaming arcades and slot machines that had been kept closed were reopened at the end of the spring, and ca. 600 members of Veikkaus’ staff who had been laid off got to return to their workplaces.

In contrast, the betting games saw their gross gaming revenue (EUR 45.7 million) increase by 57.1 percent during the period under review, as compared with the respective period last year, as the available sporting events recovered nearly to the level of the pre-coronavirus period. The Ice Hockey World Championship in May and June and the UEFA European Championship, which started in June, boosted the positive development.

Degree of authentication rose to nearly 75 percent

The year began with one of the most significant reforms in the recent history of Finnish gaming, as Veikkaus introduced compulsory authentication to the slot machines of the retail network. Since the beginning of July, all the slot machines at Veikkaus gaming arcades have also been subject to compulsory authentication, which means that customers have not been able to play slots anonymously.

“The players who feel slot machine gaming is a problem for them can now choose to block all their playing of Veikkaus’ slot machines.”

– Regina Sippel, Veikkaus’ CFO

Currently, up to nearly 75 percent of gaming takes place authenticated, and anonymous gaming occurs mainly with coupon-based games that cause problems less often, such as Lotto. Next, compulsory authentication will be extended to the coupon-based games in 2022. Veikkaus aims at making all its games subject to compulsory authentication by the end of 2023.

“Full authentication has major benefits not only for the prevention of gambling-related harm but also for age limit controls, crime prevention, and the development of business operations that are even more sustainable. It is our goal to make sustainability our success factor for the future and to turn into a leading expert of sustainability in the gaming business.”

– Regina Sippel, Veikkaus’ CFO

On 1 September, the concept of gaming control tools will turn more comprehensive still, as the physical slot machines and the table games (excl. poker) will be made subject to the same daily and monthly loss limits as those currently applied to Veikkaus’ fast-paced online games.

Cooperation negotiations covering 830 members of Veikkaus’ staff launched in August

Veikkaus’ operating environment and business volume have undergone profound changes in the past few years. To continue to perform successfully in the future, Veikkaus strives to adapt its operations, making them more efficient so that they would meet the demands of the changing operating environment.

Veikkaus launched cooperation negotiations after the period under review, on Monday 16 August, covering ca. 830 members of the staff. It is estimated that the planned measures may lead to personnel cuts affecting a maximum of 200 employees. Further, the terms of employment of a maximum of 330 employees may change materially.

https://www.world-lotteries.org/insights/news/member-news/veikkaus-financial-profit-for-the-first-half-of-the-year-remained-at-last-years-level