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

Veikkaus, the state-owned gambling monopoly of Finland, has reported steady growth in its interim financial report for the first half of the year, while also reaffirming its support for transitioning to a licensing model for gambling. 

Eurojackpot’s Success Fuels 20.8% Rise in Revenue

Veikkaus’s revenue for the period from January to June reached €519.3 million ($564.3 million), representing a 1.0% increase compared to the same period in the previous year.

Eurojackpot‘s gross gaming revenue rose to €78.1 million ($84.9 million), a 20.8% increase driven by added draws, while Lotto‘s revenue dropped 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. Various expenses, including the lottery tax and development costs, rose significantly compared to the previous year. The lottery tax, for instance, 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). The company’s total profit stood at €311.9 million ($339 million) after considering financial investments and costs. Notably, due to its status as a state-owned corporation, Veikkaus was exempt from paying taxes on its profits.

Veikkaus Backs Plans for Licensing System

Amidst the financial results, Veikkaus reiterated its support for the transition from a gambling monopoly to a licensing system. CEO Olli Sarekoski emphasized that the main objective was to channel more gambling activities into licensed offerings, ultimately promoting responsible gambling practice and that the company believed that the license system provided the strongest support for achieving this objective and fostering the growth of more responsible gambling.

The Finnish government plans to phase out Veikkaus’ monopoly by 2026, aiming to increase the channelization rate for gambling within the country. The decision is driven by concerns over money and market share, as offshore betting affects revenue and player protection. Under the proposed new system, private companies would be allowed to 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 also expressed support for the government’s plan to replace Veikkaus’ monopoly with a new licensing model. Additionally, in April 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).