Interim report Q3/2018: Veikkaus aims at strengthening its competitiveness in the middle of a changing operating environment
President and CEO Olli Sarekoski:
“Gaming is undergoing a strong shift towards the digital channels. Although Veikkaus holds the exclusive right to operate gambling games in Finland, the gambling provision in the digital channels takes place in a competitive market in practice. The Finnish gambling market totalled an estimated EUR 1 460 million (+0%) in terms of GGR in the period between January and September. Veikkaus’ share of the total market was ca. 89 percent. The development of the regulatory environment, among other things, has led part of the gaming to take place with foreign operators.
- Turnover EUR 2 326.3 million (-2.4%).
- Financial result EUR 752.5 million (+0%).
- Of the turnover, 57.7% came from the points of sale and 42.3% came from the digital channels.
- Veikkaus revised its strategy to maintain its ability to channel gaming in the middle of international competition.
- Large 90-million-euro jackpots boosted Eurojackpot’s turnover for the start of the year (EUR 222.8 million) to reach a growth of 33.4 percent.
- Identified gaming represented 44.8 percent of all gaming (+4.6 percentage points).
Veikkaus’ Board of Directors approved the company’s new strategic guidelines in its meeting at the end of August. Veikkaus’ strategy 2019-2021 will be based on a competitive monopoly status. The objective is to build Veikkaus into an operator that also succeeds in international competition. Success in competition and securing our channelling capacity enable us, for their part, to maintain our exclusive right. 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.
From the perspective of responsibility, it is important that we can channel digital gaming towards Veikkaus games, which are subject to gaming restrictions that are unique even in the international setting. Our players have been able to manage their gaming by following the gaming restrictions, to such a degree that problem gambling has decreased. Our first analyses indicate that the gaming restrictions have thus functioned properly and in the intended way. It is estimated that the gaming restriction concept will reduce the gross gaming revenue from Veikkaus’ digital channel by 30 million euros a year.
The development of Veikkaus’ gross gaming revenue took a downward turn during the third quarter of the year. Besides the gaming restriction concept, one reason for this was the decrease in slot machine gaming, which was due to the changes in the structure of the retail trade. This year, the game group to have performed the best has been that of Lucky Games, especially Eurojackpot, which has boasted 90-million-euro maximum jackpots up to nine times during the beginning of the year.
The Ministry of the Interior bill on the amendment of the Lotteries Act was on a consultation round, which ended on 10 August. According to the bill, decentralised slot machines should be made subject to comprehensive identification from the beginning of 2021 onwards. In its statement, Veikkaus paid attention to, e.g., the proposed two-phase identification procedure, the time schedule of the reform, and the selection of methods of voluntary identification. We estimated in our statement that the negative impact on our income would amount to 78–170 million euros in 2021, the year when the obligatory identification would be introduced, depending on the identification solution and the tools of gambling control that would be adopted.”
Executive Vice President
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