Veikkaus to overhaul online products following H1 revenues dip

Finnish monopoly operator Veikkaus has revealed a 3.5% year-on-year drop in gross gaming revenue for the first half of 2019, with revenues falling to €844m (£756.7m).

In its report for H1 2019, the company revealed a 5.7% YoY drop in its turnover to €15bn (£1.3bn) from a previous H1 2018 high of €1.6bn (£1.4bn).

Veikkaus’ business is currently divided into three groups, games of chance (lotteries), which represents 42% of the business, casino gaming, which represents 34% and sports betting which represents 24%.

Turnover from the games of chance segment fell by 6.2% YoY during H1 to €630m (£565m) from a previous H1 2018 high of €672m.

The casino games segment of the business, which includes land-based casino gaming as well as online games and bingo, reported H1 2019 turnover of €507m (£454m), down 3.7% YoY from the same period in 2018. Sports betting turnover also fell during the first half of 2019, by 7.6% YoY to €359m (£321m).

As part of its agreement with the Finnish authorities, Veikkaus paid €101.1m back to the Finnish state through lottery taxation. Finland’s total gambling market, which includes other digital operators was valued at €996m.

Over 56% of Veikkaus’s net sales during H1 came through its retail sales network, while 43% came via the operators digital channels. The company said its online department deals with an average of 623,000 customers a week, with over 52.5% of this traffic coming via digital devices.

Veikkaus confirmed it is currently conducting several “customer experience enhancement” projects, which will see the operator’s betting and online casino channels improved.

It also said it is currently looking to introduce compulsory game limits on its decentralised slots machines, which when introduced will reduce company profits by between €100-150m. Current estimates claim that the mandatory limits on its digital channel will reduce revenues by €40m.

Company president and CEO Olli Sarekoski said the company needs to increase its investment in online gambling due to the changing operating environment and the absence of a monopoly in this area.

“The global gaming sector is turning digital at a fast pace and gaming is shifting more and more strongly towards the digital channel in Finland, as well. As a result of structural change in trade, our retail network has been reduced significantly over the past few years,” Sarekoski added.

Veikkaus itself has come in for criticism during the first half of 2019, following concerns over its strategic shift toward the online casino channel and whether its monopoly on gambling in Finland should be ended.

Last month, a recent high-profile advertising campaign by the firm received several complaints following claims that it encouraged gambling as a means of addressing mental health issues. In the wake of the complaints, Veikkaus suspended a significant proportion of is marketing with immediate effect.