Veikkaus Embraces Licensing Model, Records €519.3m Revenue for H1 2023

Veikkaus, the state-owned gambling monopoly of Finland, has released its interim financial report for the first half of the year, showing steady revenue growth. In addition, the company has expressed its support for transitioning to a licensing model for gambling.

The results of the interim financial report indicate that Veikkaus has experienced a 1.0% increase in revenue, with a total of €519.3 million earned in the first half of the year. The online casino segment was the primary driver of this growth, with a remarkable 9.4% increase in revenue. Veikkaus has attributed this surge to the success of several new game launches.

Key Takeaways

  • Veikkaus has reported steady growth in revenue in its interim financial report for the first half of the year.
  • The boost in revenue was primarily driven by Veikkaus’ online casino segment, which saw a remarkable growth of 9.4%.
  • Veikkaus has expressed its support for transitioning to a licensing model for gambling.

Eurojackpot’s Success Fuels 20.8% Rise in Revenue

Veikkaus, the Finnish state-owned gaming operator, reported a 1% increase in its revenue for H1 2023, reaching €519.3 million ($564.3 million). The increase was mainly driven by the success of Eurojackpot, which saw a 20.8% rise in its gross gaming revenue, reaching €78.1 million ($84.9 million). The increase was due to added draws that attracted more players.

In contrast, Lotto’s revenue dropped by 12.7% to €64.8 million ($70.4 million) due to smaller jackpots and fewer drawings. Betting revenue remained nearly steady at €61.3 million ($66.6 million), showing a slight 1.5% decrease from the previous year.

Despite the favorable revenue growth, Veikkaus faced challenges as increased costs impinged on its potential profit rise. The lottery tax surged by 48.1% to €25.9 million ($28.1 million), while other business expenses rose from €51.7 million ($56.2 million) to €60.5 million ($65.7 million).

As a result of these increased costs, Veikkaus’ operating profit experienced a decline of 6.2%, totaling €310.2 million ($337.1 million). After considering financial investments and costs, the company’s total profit stood at €311.9 million ($339 million). Notably, Veikkaus was exempt from paying taxes on its profits due to its status as a state-owned corporation.

Veikkaus Backs Plans for Licensing System

Veikkaus, the Finnish state-owned gambling operator, has supported the government’s transition from a gambling monopoly to a licensing system. The company believes that the license system would promote responsible gambling practices and foster the growth of more responsible gambling. CEO Olli Sarekoski emphasized that the main objective was to channel more gambling activities into licensed offerings.

The Finnish government aims to phase out Veikkaus’ monopoly by 2026 to increase the channelization rate for gambling within the country. Concerns over money and market share drove the decision, as offshore betting affects revenue and player protection. Under the new system, private companies could apply for licenses to offer sports betting and online casino services. The government’s strategy also includes dividing Veikkaus into distinct companies under the same group.

Finnish politicians, including the Centre Party, the National Coalition Party, and the Labour Institute for Economic Research, have supported the government’s plan to replace Veikkaus’ monopoly with a new licensing model. A Finnish government study recommended reforming the current monopoly gaming system due to significant unlicensed gaming activity amounting to an annual loss of around €500-550 million ($549-603 million).

Veikkaus’ support for the licensing system is in line with its financial results, which showed a boost in revenue primarily driven by the online casino segment. The surge in online casino revenue was attributed to the success of several new game launches. The company’s B2B subsidiary Fennica Gaming, also reported a turnover of €300,000 for the six months ending June 30, 2023.

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