Veikkaus Reports 32.6% Drop in Profits Due to COVID-19

Finlands government-owned operator Veikkaus disclosed its financial outcomes for the 2020 fiscal period, revealing a total gain of €680.2 million (£586.4 million/$819.6 million), a decrease of 32.6% compared to the preceding year.

The operator attributed the primary cause for the reduction in profits to the influence of the novel coronavirus (COVID-19) pandemic on its operations, which resulted in the shutdown of slot machines for approximately five months during the year.

Total gaming income (GGR) for the year amounted to €1.26 billion, a decrease of 25.5%, with the operator indicating that the pandemic diminished its GGR by over €300 million throughout the year.

Of the total GGR, 56.6% originated from sales points within the operator’s retail network, while 43.4% stemmed from its digital channels, which experienced an increase of 11.6%.

The operator stated that the rise in the digital channel share was a consequence of the decline in the share of sales point games following the closure of slot machines.

Of the total gaming digital, 58.1% was verified, employing identity checks. The verification rate for slot machine games was only 11.5% after the operator initiated a pilot program for slot machine identity verification requirements in October. The requirement was implemented nationwide in January.

The GGR for the entire Finnish gambling market reached €1 billion.

The Finnish national lottery enterprise, Veikkaus, saw its revenue reach a staggering €59 billion in 2020. This represented a 21% decline from the preceding year, despite holding a market share of roughly 80%.

Veikkaus’s online gambling sector commanded a share of approximately 63%, with total wagers reaching around €8.2 billion.

A study conducted by the market research firm Taloustutkimus indicated that the average prevalence of problematic gambling in Finland is about 2.5%.

Veikkaus declared that even during the reopening of slot machines, only a limited number were permitted to resume operations. This was with the exception of a four-month period in the spring and a nationwide closure from November onwards. This was to ensure safe distancing between the machines, a necessity mandated by COVID-19 safety protocols.

In addition to the closure of slot machines, income was also negatively impacted by the absence of global professional sporting events, resulting in a contraction of the gambling market.

“The emergence of COVID-19 in 2020 compelled us at Veikkaus to make swift and occasionally challenging decisions to safeguard the well-being of our staff, patrons, and retailers,” stated Regina Sippel, the operator’s Chief Financial Officer.

“For Veikkaus, as with numerous other companies, the COVID-19 year was fraught with difficulties. However, it was also a period marked by positive, exceptional solutions that enabled us to establish a more responsible gambling environment.”

The operator’s strategic plan and corporate social responsibility framework were revised in 2020, placing a strong emphasis on player accountability.

Hannah Kilkki, the top legal and social responsibility executive, stated the revised plan aims to cultivate a more secure and accountable gaming atmosphere.

Despite the difficulties and unpredictability introduced by the global health crisis, a significant decision was made in 2020 to dedicate resources to building a more responsible gaming environment.

One of the key adjustments to these regulations was the decrease in the number of slot machines within the retail network, by roughly 8,000 machines, representing 40% of their total machine inventory. Currently, the maximum number of machines permitted per location is four, compared to the previous allowance of up to 15 slot machines in the largest retail units.

The operator also initiated preparations for mandatory player verification for all gaming activities in 2020, with intentions to implement the measure by 2023.

It is projected that the implementation of mandatory player identification will result in a reduction of player losses by approximately €300 million annually.

The operator also introduced a maximum loss limit of €500 per day for “rapid-paced online games” such as online lottery games, slot machines, bingo, and table games, excluding poker. The loss limit is anticipated to remain in effect until at least March 2021.

Sign up for the iGaming newsletter.