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Finland – Pandemic closures wipe €300m from Veikkaus’ 2020 revenues

By - 1 March 2021

The coronavirus epidemic had a significant impact on Veikkaus ‘business operations in 2020 with profit for the financial year down 36.6 per cent at €680.2m.

The company’s slot machines were closed entirely or in part for a total of about five months. Gross Gaming revenue for the financial year was down 25.5 per cent to €1,260.3m. Veikkaus estimates that the coronavirus epidemic reduced its Gross Gaming revenue by more than €300m in 2020.

Of the Gross Gaming revenue, 56.6 per cent came from the points of sales of the retail network, while 43.4 per cent came from the digital channel, up 11.6 per cent. The increase in the share of the digital channel was due to a drop in the share of point-of-sales Gaming, as the slot machines were closed for a major part of the year.
Of all Gaming, 58.1 per cent took place authenticated. For slot machine gaming, the share of authenticated gaming was 11.5 per cent.

Veikkaus’ share of the total Finnish gambling market was approximately 80 per cent.

Regina Sippel, Veikkaus’ CFO, said: “We had to take major, even difficult, decisions, on a tight schedule at Veikkaus due to the coronavirus epidemic in 2020, in order to protect the health of our staff, customers, and retailers. To Veikkaus, just as to many other companies, the year of the coronavirus was challenging; however, it was also a year of positive, remarkable solutions that have enabled the building of a more responsible gaming environment.”

Gambling is shifting strongly towards the digital channel where Veikkaus is competing against foreign operators. Online gambling in gambling services other than Veikkaus’ service increased by over two per cent in the year under review. Veikkaus’ share of the total digital market was 63 per cent in 2020. The drop in Veikkaus ‘market share of the digital channel, which has continued for a long time, has affected Veikkaus’ Gross Gaming revenue negatively.

Both Veikkaus ‘strategy and CSR Program were updated during 2020. Veikkaus’ updated strategy Highlights player-centered responsibility, ie, our responsibility towards individuals.

Hanna Kyrki, SVP, Legal Affairs and CSR, said: “The updated strategy is based on an even Safer and more responsible Gaming environment. Despite the challenges and insecurity caused by the epidemic, we made major decisions to work on the building of a more responsible gaming environment in 2020.”

One of Veikkaus’ major actions for responsibility was that the number of slot machines in the retail network was reduced more in 2020 than previously planned. They were reduced by 8,000, ie, by 40 percent from the previous year. As a result, the current total number of slot machines in stores, kiosks, restaurants, and service stations is ca. 10,500 slot machines. The reductions were basically carried out by limiting the maximum number of the slot machines per one point of sales to four. This was a significant change, as the largest retail units could previously have up to 15 slot machines at the maximum.

In 2020, it also prepared for compulsory authentication on the slot machines of the retail network, which entered into force in January 2021, and made a decision to bring forward the introduction of compulsory authentication to the Slots and table games at Veikkaus Gaming Arcades, to be already started in summer 2021. It is also planning to apply the same loss limits that currently cover the fast-paced games in Veikkaus’ online service to the physical Slots and table games next summer.

Veikkaus’ objective is to make all of its games subject to authentication by the end of 2023. By adopting compulsory authentication, it aims to reduce problematic gambling.

Ms Sippel said: “When the games can only be played authenticated, we can offer our customers effective tools for gambling control, and the players can, eg, opt for total gambling self-exclusion. What is more, compulsory authentication facilitates age limit controls and helps us to prevent money laundering and other criminal activities. It has been estimated that the compulsory authentication, together with the gambling control tools, will cut the players’ losses – and at the same time reduce the revenue to society – by ca. 300m annually, as compared to the revenue from the pre-coronavirus year 2019.”

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