Q&A: Veikkaus on competing in online casino

As the largest gambling operator in Finland, Veikkaus has retained its position at the top of the tree, despite the integration of separate brands RAY and Fintoto and a full-scale structural reorganisation of the business in 2017.

The Veikkaus business operates over 4,000 shops, 21,424 slots machines and Finland’s only casino as part of very successful land-based gambling business. However, over one third of the business’s total play is now taking place online, with the Veikkaus.fi online casino site hosting as many as 700,000 players per week.

Embracing what it recently called an “ever-accelerating digital competition” which has led to drastic decreases in the retail effectiveness of its point-of-sale network, Veikkaus elected to reduce its retail workforce, predominantly located in the Helsinki region by more than 65% in January.

In tandem with this, the operator is set to add online casino games belonging to two of Sweden’s biggest online suppliers, NetEnt and Yggdrasil, to its Veikkaus.fi portfolio in Q2 2019. It has also recently announced a €8m capital increase in its investment potential which could see further casino-led deals being signed in the not too distant future.

Jan Hagelberg, director of casino gaming at Veikkaus, chats to EGR Intel about the potential of this new investment and the companies new focus on the online market.

EGR Intel: Will the money be invested gradually over the next three to four years or immediately?

Jan Hagelberg (JH): The sum mentioned (€4-8m) is a rough estimation. We’ve made deals with NetEnt and Yggdrasil for four years, that is the initial contract period. We pay revenue share as everyone else, so it’s not really an investment. These deals are old news published already in November 2018. We hope to have the games available within Q2 2019. As I said, the sum is an estimation only, and the reason that it’s publicly available is that, as a government-owned company, we must follow the national procurement law and EU laws, which require us to be transparent and publish some details when making a tender or a direct procurement.

EGR Intel: Are you in discussions with any online game suppliers currently?

JH: We have agreements with NetEnt and Yggdrasil. We also just published a direct procurement to acquire games from IGT and are discussing further deals with several other suppliers. Our aim is to integrate couple of new suppliers per year. The first games from NetEnt and Yggdrasil are to be launched on our veikkaus.fi site soon.

EGR Intel: Where has this additional investment funding come from?

JH: There is no additional investment fund per se. The mentioned “investment” is actually revenue share that we pay for the suppliers to have their games in our online casino veikkaus.fi. The so-called “investment” mentioned in Finnish newspapers is a misunderstanding by journalists who do not know how the industry really works or understand the concept “revenue share”.

EGR Intel: Questions have been raised about whether Veikkaus should retain its monopoly over gambling in Finland. Following the decision to shift into online, what is Veikkaus’s position on this?

JH: The new Veikkaus was formed when three national gaming companies Veikkaus, RAY and Fintoto joined early 2017. All these former operators offered their own dedicated gaming verticals to Finnish customers, both on retail and online: Veikkaus had very advanced online lottery and sports betting, RAY had online casino and poker and Fintoto had horse betting.

The new Veikkaus now has all products in its online casino veikkaus.fi, the largest online store in Finland attracting up to 700,000 players per week. 42,1% of the company’s turnover comes from the online. We’ve been doing cutting-edge digital channel distribution for years, having advanced personalisation and digital sales methods in place before our competitors.

So, there’s no decision to shift into online really, as Veikkaus has been in the digital channels from the 90s. The only thing lacking has been the number of slot suppliers, which we are about to fix soon.

But it is true that we take the competition seriously and have made a strategic move to make the best efforts in the digital channel and online growth to secure our position for Finns as the main destination for online casino, sports betting and lottery customers.

Being owned by the state, the decision whether Veikkaus should retain its monopoly, is actually a decision of the owner, not the company. We just do our best to supply what our players ask from us, to provide them the best and safest online gaming experience.