Veikkaus prepares for major changes in its operating environment, focusing on digital channels to compete with international competition

in Lottery

President and CEO Olli Sarekoski: ”In 2018 Veikkaus prepared for major changes in its operating environment. Gaming is shifting from the points of sale towards the digital channel, where Veikkaus also faces competition from foreign operators. Veikkaus must develop its operations to succeed in international competition. Succeeding in the competition and ensuring our ability to channel gaming also provide the basis for the exclusive right and its continuation. We want to be able to provide games responsibly even in the future, minimizing game-related harm and channelling gaming revenue to the benefit of Finnish people.

In 2018 Veikkaus managed to reach the previous year’s level in its financial result, despite toughening competition. The year was especially successful for Eurojackpot, the turnover of which increased by 40.6 percent over the previous year. During the year Veikkaus kept preparing for major changes in its operating environment and drafted a strategy for the years 2019–2021.

  • Turnover EUR 3 154.7 million (-2.4%).
  • Financial result EUR 1 014.2 million (-0.7%).
  • Of the turnover, 57.9 percent came from the points of sale and 42.1 percent from the digital channel.  
  • Eurojackpot had an excellent year. Multiple large jackpots boosted the game’s turnover (EUR 300.8 million) to a growth of 40,6 percent.  
  • 44.8 of the gaming took place identified (+4.2 percentage points).
     

President and CEO Olli Sarekoski:

”In 2018 Veikkaus prepared for major changes in its operating environment. Gaming is shifting from the points of sale towards the digital channel, where Veikkaus also faces competition from foreign operators. Veikkaus must develop its operations to succeed in international competition. Succeeding in the competition and ensuring our ability to channel gaming also provide the basis for the exclusive right and its continuation. We want to be able to provide games responsibly even in the future, minimizing game-related harm and channelling gaming revenue to the benefit of Finnish people.

The strategy for the years 2019–2021 lays down that Veikkaus’ competitiveness shall be reinforced in the digital channel. We innovate and develop our operations in order to be able to offer our customers world-class alternatives to play entertaining and exciting gambling games in a reliable way. We also work in close cooperation with our international partners.

From the perspective of responsibility, it is important that we manage to channel gaming towards Veikkaus’ games. A year ago, we introduced gaming limits in the digital channel that are unique even in the international setting. The first analyses have shown that the players have managed to use the gaming limits to control their gaming to take the direction they wish, and this has also lessened problematic gaming. According to estimates, the compulsory gaming limits decreased the growth of the gross gaming revenue in the digital channel by ca. EUR 21 million in 2018.

The government bill for a new Lotteries Act was presented for parliamentary consideration in October. The bill entails that Veikkaus should introduce compulsory identification on decentralised slot machines as of 1 January 2022.  Veikkaus estimates that the compulsory identification would decrease the profit from slot machines by ca. EUR 100–150 million a year. Its impact on the lottery tax paid by Veikkaus would fall within the range of EUR 4–36 million.

Changes in consumer behaviour, the transition that trade is currently undergoing, and the reductions in the point-of-sale network have lessened gaming at the points of sale. We are working to overhaul Veikkaus’ cost structure to correspond to the development in order to ensure our future competitiveness, thereby securing funds to our beneficiaries. In the coming years, we will focus on investments that support Veikkaus’ competitive monopoly.

In spite of the challenges in the development of the gross gaming revenue, we were able to generate the projected profit to our beneficiaries in 2018, by operating in a cost-efficient way. By developing further our operations, we can continue to guarantee the profit to our beneficiaries even in the future.

I express my sincere thanks to our customers, employees, and partners for the year 2018!”

Veikkauksen mediapalvelu, puh. 09 4370 7000 (kello 8-22), www.veikkaus.fi/yritys

VEIKKAUS_Annual_report_2018.pdf

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