Veikkaus Oy has reported a year-over-year dip in gross gaming revenue and operating profit during the first half of 2024 as the Finland gambling market edges closer towards a planned licensing system.
Despite the drop, Veikkaus CFO Regina Sippel has expressed optimism about the operator’s future, noting that the overhaul of the country’s gambling system is a “great chance” for the company and it will continue to invest in business development and customer experience.
For H1, January 2024 to June 2024, Veikkaus Group’s actual sales revenue – GGR and turnover from other business activities – dropped by 6.8% YoY to €483.8m. Operating profit fell by 20.4% to €246.9m while profit dipped by 19.1% as well to €252.3m.
The profit decline occurred due to major investments in the group’s future and the increase in lottery tax on gross gaming revenue, which rose by seven percentage points to 12%, resulting in the company paying €57.6m in lottery tax to the state, €31.7m more than H1 2023.
Veikkaus Oy noted that GGR fell by 7% in H1 in comparison to the same period the previous year to €482.8m.
GGR declined due to “the authentication requirement introduced to the physical point of sales ticket-based games in the spring of 2023 (-21%), the authentication requirement applied to scratchcards since the beginning of 2024 (-44%) and, to a lesser degree, a decrease in consumers’ purchasing power”.
However, the state-owned operator did note that the number of customers has increased by around 15,000 during H1 to 2.54 million registered customers, while the share of the digital channels out of the GGR rose by 6.6 percentage points to 60.5%.
Veikkaus Oy’s operating profit fell by 20.1% YoY to €250.2m while financial profit dropped by 18.8% to €255.6m. The operator’s profit is “returned to the state budget without specifically determined use objects”.
In total, Veikkaus’ return to the state, including the profit and the lottery tax, declined by 8.1% YoY to €313.2m.
Veikkaus’ subsidiary, Fennica Gaming, signed three major client agreements during H1 in Brazil, France and the US state of Virginia. The subsidiary currently has 15 signed agreements, 10 of which were in production on three different continents at the end of H1.
When reflecting on the H1 financials, Sippel has expressed optimism about the future of Veikkaus despite a planned shift incoming for Finland’s gambling market model, which will see the country adopt a licensing system in 2027.
Sippel stated: “During the first half of the year, we implemented Veikkaus’ strategy as planned, investing in both business development and international growth. Fennica Gaming reached significant results during the first half of the year, and the future outlook is bright.
“The upcoming overhaul of the gambling system is a great chance for Veikkaus, and we will continue to invest in business development, and offering the best customer experience.”
In October 2023, Finland’s Ministry of Interior announced a legislative project that will prepare the country for the introduction of a licensing system for gambling, moving away from the monopoly system.
According to the programme, the licence system will cover online casino and online sports betting while stripping state-owned Veikkaus of its current monopoly of the market.
Although the European Gaming and Betting Association showed their support for the change, Finland’s Institute of Health and Welfare expressed concerns over the new licensing model, stating that it could lead to a rise in problem gambling rates in the country.