Veikkaus Revenues Stagnate as the Agency’s Future Remains Uncertain

Veikkaus Oy’s 2022 profits remained roughly in line with last year. Fennica Gaming, the group’s first subsidiary, showed promising results and should soon significantly contribute to the group’s market presence. Despite optimistic remarks from board members, rising political pressures may soon disrupt Veikkaus’ undisputed reign over the Swedish market.

Financials Remained Stable across the Board

The group’s overall performance for the 12-month period ending 31 December is roughly in line with 2021. Revenues reached €1,07 billion ($1,14 billion), a 3% drop compared to last year. Operating income and financial profit also saw little change, remaining respectively at €680.3 million (7$24.97 million) and €680.0 million ($724.67 million). 

Brick-and-mortar venues accounted for 49.7% of gross gaming revenue, while the agency’s iGaming offerings edged ahead, contributing 50.3%. Lotteries continue to be the cornerstone of Veikkaus’ business model, netting €600.0 million ($639.52 million) in revenue. Land-based casinos generated a respectable € 346.7 million ($369.55 million), but betting revenues dropped by 16.9% year-on-year to €123.8 million ($131.97 million).

Expenses also remained relatively stable despite rising inflation. The monopoly paid significantly lower lottery taxes at €36.3 million ($38.75 million) for a 39.8% drop. However, the 3.3% rise in material and service costs of €132.5 million ($141.51 million) balanced the net sum. As a state-owned entity, Veikkaus’ total net income of €671.0 million ($716.4 million) will go toward government initiatives and projects.

Foreign Operators Continue to Siphon Profits

According to Veikkaus’s most recent press release, the ongoing stagnation primarily resulted from several unfavorable factors. CFO Regina Sippel explained that consumer activity still lagged behind pre-pandemic levels despite the group’s venues operating at capacity. She noted that 2021’s manual limits for slot machines, the war in Ukraine, and a challenging economic climate exerted significant pressure on potential gamblers.

The… increase in consumer uncertainty and reduced purchasing power have… affected demand for Veikkaus games.

Regina Sippel, Veikkaus CFO

Veikkaus’ status as a state-owned entity means it remains fully committed to fostering a responsible gaming environment. In 2023, the company plans to introduce compulsory authentication for ticket-based games, covering most of the company’s offerings. However, foreign operators continue to undermine the monopoly’s online market share. They function outside the country’s player protection regulations, putting an increasing number of players at harm.

While revenues remained stable, Veikkaus is facing trouble on the political front. Politicians are becoming increasingly weary of foreign operators siphoning profits overseas while causing harm within the country’s borders. Three leading parties have expressed a desire to end Veikkaus’s monopoly and introduce a licensing system similar to Sweden’s. With plans to transition by 2025, the agency’s competition-free days may soon meet their end.