Veikkaus posts revenue decline amid rising digital competition

in Lottery

Veikkaus chief executive Olli Sarekoski has pledged to make the company’s product offering more competitive as the Finnish monopoly operator looks to channel players away from offshore brands. 

Sarekoski was speaking after the company announced a 2.4% year-on-year decline in turnover for the third quarter of the year, which fell to €2.33bn. The figure showed a growing shift towards digital play, with the channel accounting for 42.3% of turnover, compared to 57.7% from physical points of sale. 

Total sales for the quarter fell 7.3% to €739.1m, with draw-based games including Lotto, Eurojackpot and Keno accounting for 38.1%, closely followed by online and land-based slot machiens, which generated 36.5%. Sports betting made up the final 25.5%. 

Over the quarter Veikkaus saw increased uptake of account-based play, with 44.8% of players gambling via a registered account. This represented a 4.6 percentage point increase on the prior year. 

Commenting on the results, CEO Sarekoski said with Finnish players migrating to gamble online, Veikkaus was facing increased competition from unlicensed iGaming operators in the country.

“The Finnish gambling market totalled an estimated €1.46bn in terms of GGR in the period between January and September,” he said. “Veikkaus’ share of the total market was around 89%.”

To tackle this shift, Sarekoski said that Veikkaus’ board of directors has approved a new strategy for 2019 to 2021 that will see the company operate as a “competitive monopoly”. 

“The objective is to build Veikkaus into an operator that also succeeds against international competition,” he explained. "Success in competition and securing our channelling capacity enable us, for their part, to maintain our exclusive rights. 

“We want to be able to offer games responsibly even in the future, minimizing the detriments of gaming and continuing to ensure that the gaming revenue is channelled to the benefit of all of us Finns.”

He said it was particularly important to channel online players towards Veikkaus’ iGaming offering, as it used a number of controls to ensure players did not develop problems. While he claimed that early indications suggested that these controls, which include mandatory limits on spending and gameplay, had reduced problem gambling, they had also hit revenue. Sarekoski said that it was likely to see annual digital revenue fall by around €30m.

He also provided an update on an amendment to Finland’s Lotteries Act, which aims to make all slot machines limited to account-based play from 2021. This, he said, may reduce Veikkaus’ annual revenue by as much as €170m that year.

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