Veikkaus suffers H1 revenue hit after tax increase and major group investments
Finnish operator saw a 6.8% year-on-year drop in revenue as management claims the business is aiming for market leadership position in post-monopoly environment
Veikkaus recorded revenue of €482.8m (£407.3m) for the first half of 2024, representing a 6.8% year-on-year (YoY) decrease as bosses pointed to stricter authentication requirements in Finland.
Income from lotteries came to €256.3m, down from €278.2m the year before. Slot machine and table game revenue fell 13.7% to €74.5m, while online casino and betting revenue decreased to €152.1m from €154.4m last year.
As a revenue split, 68.5% of Veikkaus’ revenue was derived from land-based operations, with the remainder coming from its online vertical.
Veikkaus said requirements over ID authentication at land-based points of sale had resulted in a revenue reduction, while a squeeze on consumers’ disposable income had also disrupted results.
Operating profit between January and June 2024 fell 20.1% YoY to €250.2m, while total profit fell 18.8% to €255.6m.
The operator also attributed the revenue and profit decline partly to an increase in lottery tax on gross gaming revenue within the country.
The company stated that it paid 12% tax for H1 2024, compared to 5% the previous year. This led to a €57.6m lottery tax payment to the state, up from €25.9m in H1 2023.
Veikkaus also cited “major investments in the group’s future” as another contributing factor to its revenue decrease, which amounted to €25m.
A company statement said: “Investments have been made especially to build Veikkaus’ competitiveness in the digital channel.
“Veikkaus is also running a large enterprise resource planning system project, the goal of which is to renew and modernise several functional areas during the years 2024 and 2025.”
By the end of June, Veikkaus had 2,535,000 registered customers, an increase of about 15,000 from the previous year.
During H1, Veikkaus B2B supplier subsidiary Fennica Gaming signed significant client deals to deliver its lottery product in Brazil, France and the US, taking its total number of client agreements up to 15.
Back in July, Finland’s Ministry of the Interior submitted a proposal to the government for a multi-licenced gambling market model, due for launch in 2027, which would put an end to the monopoly that Veikkaus currently enjoys.
Should the proposal receive government approval, license applications could be accepted from the start of 2026.
Olli Sarekoski, Veikkaus managing director, said: “Veikkaus’ profit margin was not at the expected level at the beginning of the year, which was affected by, among other things, the responsibility measures we took this year and the previous year and the decrease in consumer purchasing power.”
He added: “Still, there were many successes in many fields in the beginning of the year. During the beginning of the year, Veikkaus invested a lot in renewal and development work, so that we are ready when Finland moves to a partial gambling multi-license system according to the new draft gambling law in 2027.
“The goal of our strategy is to be both the Finnish market leader and an internationally competitive and growing gambling company in the future.”
Regina Sippel, Veikkaus CFO, added: “During the first half of the year, we implemented Veikkaus’ strategy as planned, investing in both business development and international growth. Fennica Gaming reached significant results during the first half of the year, and the future outlook is bright.
“The upcoming overhaul of the gambling system is a great chance for Veikkaus, and we will continue to invest in business development, and offering the best customer experience.”