Veikkaus to spend €50m on 2020 responsible gambling measures

Finnish monopoly operator Veikkaus will suffer a €50m (£42m) impact on earnings next year after pledging to invest heavily in a new corporate responsibility strategy.

The company confirmed its total revenues are estimated to fall to the level of those generated in 2014, prior to the merger of three separate companies (Veikkaus, RAY and Fintoto) into the present Veikkaus Group. At the time, the three separate entities generated a total of €963m (£818m).

In its 2018 full year results, the group generated total revenues of €1,014.2m (£861m).

Veikkaus strategic plan for 2020 includes the introduction of mandatory identification measures on slot machines, together with a reduction of these machines to 3,500.

The company has also pledged to develop and implement a “more responsible” marketing strategy going forward and implement new accountability solutions to Finnish authorities and the general public.

These include new standardised reporting standards consistent with the International Financial Reporting Standard (IFRS), currently used by other operators including Svenska Spel and Danske Spil.

New reporting metrics to be included are gaming margin, together with the losses of its customers, with reports being produced twice a year, simultaneously. The new reporting policy will be implemented for the first time in the operator’s 2019 Annual Responsibility Report, to be published in February-March 2020.

Speaking about the new reporting standards, Veikkaus CFO Regina Sippel said the company would monitor the success of its gambling-related harm prevention measures.

Veikkaus also confirmed its current performance-based rewards scheme for management will be determined by its responsible gambling performance in both 2019 and 2020.

Currently, the system comprises a weighted model based on a 40% efficiency measure, with customer volume at 35% and staff development at 25%. However the new system will see the efficiency measure assessed against a threshold determined using the results of population surveys conducted by Finnish economic researchers Taloustutkimus Oy.

If this threshold is exceed, Veikkaus has said it remove the 40% efficiency measure from its rewards scheme calculation, reducing the amount payable to management staff.

Veikkaus has come under significant scrutiny in recent months, beginning with complaints over a high-profile marketing campaign by the monopoly operator, which later led to the company suspending a proportion of its marketing.

This has led to calls to end the operator’s monopoly on Finnish gambling.