Veikkaus sees millions evaporate in just 6 months
•
8 Sep 2024 •
Reading time: 2 minutes Veikkaus is dealing with a sharp decline in its turnover. In its financial report for the first half of 2024 the company reported a 7 percent decline in gross gaming revenue GGR.
Stricter requirements lead to significantly lower revenue
Veikkaus decline in gross gaming revenue is partly due to stricter regulations in force in Finland. For example scratch card and lottery players were now required to show identification when purchasing. This led to a 44% decline in scratch card sales. Revenue from card games also fell. With a 21% drop compared to last year.
Another important factor is the decreased purchasing power of Finnish consumers who have less to spend. This is due to the ongoing inflation, which also had a negative effect on sales figures.
More customers despite lower expenditure per player
Although expenditure per player fell, Veikkaus still saw a slight increase in the number of registered customers. At the end of June 2024 the company had 2.54 million registered customers an increase of 15,000 compared to the previous half-year.
According to Veikkaus this growth can be attributed to investments in customer experience and business development, which were strategically continued despite declining revenues.
Profit decline due to investments and higher lottery tax
In addition to declining gross gaming revenues Veikkaus also saw a significant decline in operating profit. For the first half of 2024 the company reported a profit of €246.9 million. A decrease of 20% compared to the previous year. This decline in profit can be partly explained by two factors namely increased investments in international growth and a higher lottery tax in Finland.
The Finnish government increased the tax on lotteries from 5% to 12%, which led to an increase in Veikkaus’ tax expenditure, which went from €25.9 million to €57.6 million in just one year.
Regina Sippel, CFO of Veikkaus, explained the situation as follows. “In the first half of the year we implemented Veikkaus’ strategy as planned. Investing in both business development and international growth.”
Finland prepares for transition to licensing system
One of the most important changes in the Finnish gambling market is the introduction of a licensing system for new entrants. Which will replace the current monopoly model. This new system is to be fully ready by 2027 at the latest. This is earlier than expected after talks of legalisation of the market in 2026. Veikkaus is in favour of this reform, which according to research will be beneficial for the Finnish market.