The coronavirus epidemic and the sustainability actions that Veikkaus took had a major impact on Veikkaus’ business in 2021. Veikkaus’ gross gaming revenue (EUR 1,100.1 million) decreased by 12.7 % as compared with the year 2020. However, due to lowered lottery tax and a drop in the retail commissions, as well as more cost-effective operations, we were able to keep the financial profit for the period on the previous year’s level, reaching EUR 680.0 million.

Veikkaus in 2021:

• Veikkaus’ gross gaming revenue was 1,100.1 million (-12.7% as compared with 2020). The decrease in the gross gaming revenue was especially due to the introduction of compulsory authentication to slot machines and the obligatory loss limits.
• Our operating income was EUR 680.4 million (-0.0%) and financial profit EUR 680.0 million (-0.0%).
• Veikkaus’ direct proceeds to society in 2021 are calculated to amount to EUR 768.8 million. We paid EUR 60.4 million in lottery tax to the State, and EUR 28.4 million of VAT, which affected our profit as an expense. The lottery tax was lower than previously due to a decrease in the tax rate (5.5% in 2021 v. 12% in 2020) and the drop in the gross gaming revenue.
• 48.6% of the gross gaming revenue came from the physical points of sales and 51.4% from the    digital channel (+8 percentage points). There was a clear drop in the share of the physical points of sales. It resulted from the closure of the slot machines at the beginning of the year and the compulsory authentication introduced to the slot machines, together with the obligatory loss limits.
• Authenticated gambling represented 76.0% (+17.9 percentage points) of all gambling. The increase was caused especially by the compulsory authentication adopted in slot machine games.  
• The total volume spent on Veikkaus games was ca. EUR 6.9 million in 2021.
   

- The year 2021 was challenging businesswise. Due to the coronavirus epidemic, Veikkaus’ slot machines and game arcades were closed for about four months at the beginning of the year, and several employees were laid off for that period, says Regina Sippel, Veikkaus’ CFO.

The coronavirus epidemic hit the gross gaming revenue of the slot machines the most dramatically. It dropped by 52.2 percent from the previous year to EUR 143.0 million.  The fall in the gross gaming revenue was also affected by the compulsory authentication and loss limits, which were introduced to slots gambling in 2021.

The gross gaming revenue from Veikkaus’ most popular games Lotto and Eurojackpot dropped from the previous year due to jackpot levels that were lower than those of 2020. Lotto’s gross gaming revenue was EUR 162.7 million (-6.0%) and Eurojackpot’s EUR 127.1 million (-7.2%).

Betting operations, in contrast, almost reached their pre-coronavirus level, as the provision of sports events recovered, going nearly back to normal. The Betting Games group attained a gross gaming revenue of EUR 149.0 million (+8.6%) in 2021. The toto games, part of the Betting Games groups, grew slightly from the previous year, reaching a turnover of EUR 62.6 million (+0.5%).

- One of the great milestones of the year was the opening of Finland’s second casino, Casino Tampere at the Nokia Arena centre in December. Both our casinos, Casino Helsinki and Casino Tampere, are trailblazers in the European casino world, when it comes to building a responsible gambling environment, Ms Sippel says.

Veikkaus’ share of the total Finnish gambling market was ca. 74% (-5 percentage points) in 2021. Participation in online games provided by other gambling services than Veikkaus increased by 16% in the year under review.

Compulsory authentication to slot machines, table games, and Pitkäveto betting

We took a major step towards a safer gambling environment, as all slots gambling and table games were made subject to authenticated gambling in 2021. In addition to the slot machines, Veikkaus’ most popular betting game Pitkäveto was made subject to compulsory authentication.

- We are on our way to becoming a gambling company that only provides games subject to authentication. Authentication is required both in the digital and the retail channel. In 2022 we will extend compulsory authentication to the ticket-based games and in 2023, to instant scratchcards, says VP, Sustainability, Susanna Saikkonen.

Compulsory authentication has also enabled us to widen the scope of the obligatory loss limits that were already applied to our fast-paced digital games to cover the fast-paced games at the physical points of sales (slots and table games, excl. the games offered at the casinos and poker).

- Our major sustainability actions have had a significant impact on Veikkaus’ business. The estimated impact of all the sustainability actions on Veikkaus’ annual profit is EUR -500 million as compared with the year 2019, Ms Sippel says.

Following a round of cooperation negotiations in autumn 2021, Veikkaus decided to remove 14 of its game arcades. The profitability of these arcades had been permanently weakened as a result of the sustainability actions and changes in customer behaviour.  As a result of the cooperation negotiations at the end of the year, Veikkaus had to terminate a total of 183 employment relations.

Veikkaus keeps track of the development of gambling problems, for example, by carrying out an extensive population survey of 5,000 respondents. The figures obtained in the latest survey, made by Taloustutkimus at the end of 2021, were the lowest ever since the surveys were started in 2017.  Based on the survey, 1.8 percent of the respondents were categorized as problematic gamblers. In proportion to the entire population, this would correspond to a total of 75,000 people.

- The sustainability actions we have taken seem to have reduced gambling problems. However, it remains to be seen how big an impact the coronavirus epidemic has had on the decrease in the prevalence of gambling problems and how permanent the change is, Ms Saikkonen says.

Read more on Veikkaus’ website:  

• Annual and sustainability report, and financial statements 2021 in Finnish. The English version of the Annual and CSR Report will be published later.
• Corporate governance review 2021 (in Finnish)

• Compensation policy at Veikkaus 2021 (in Finnish)
• Report on the compensation of the governing bodies and personnel 2021 (in Finnish)
• Marketing communications expenses 2021 (in Finnish)

https://www.veikkaus.fi/fi/yritys#!/article/tiedotteet/yritys/2022/03_maaliskuu/veikkaus%E2%80%99-financial-profit-remained-on-previous-year%E2%80%99s-level-%E2%80%93-sustainability-actions-and-the-coronavirus-epidemic-had-a-negative-effect-on-the-gross-gaming-revenue