Veikkaus loses Finnish market share, expands internationally

Garance Limouzy September 3, 2024

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Veikkaus loses Finnish market share, expands internationally

Veikkaus released its financial results for the first half 2024. The company announces strides in digital transformation and international expansion despite facing a decline in gross gaming revenue.

Performance overview

From January to June 2024, Veikkaus recorded an actual sales revenue of EUR 483.8 million, representing a 6.8?percent?drop compared to the same period in 2023. This decline was largely attributed to the full implementation of the authentication requirement for all its games at the start of the year, which led to a 44?percent?reduction in sales of some products such as scratchcards. The gross gaming revenue fell by 7?percent, totaling EUR 482.8 million.

Despite these challenges, Veikkaus achieved positive developments, particularly in its digital segment. Digital channels now account for 60.5?percent?of the gross gaming revenue, a rise of 6.6 percentage points. Additionally, Veikkaus gained approximately 15,000 new customers, bringing the total number of registered customers to 2,535,000 by the end of June.

Market dynamics and offshore competition

The overall market size remained close to the level in the first half of 2023.?However, Veikkaus’ share of the total market declined to approximately 61?percent, a drop of 5 percentage points compared to the previous year.

The Finnish gambling market, measured by gross gaming revenue, was estimated to be around EUR 790 million during the first half of 2024. This figure combines Veikkaus’ gross gaming revenue with estimates regarding the digital gambling activities of Finns on foreign platforms.

Veikkaus’ share of Finland’s total digital gambling market during the review period was about 49 percent, a slight decrease of 2 percentage points as the competition from foreign operators is increasing.

The shift towards digital gambling continues to accelerate, with the digital gambling market in Finland estimated at around EUR 600 million for the first half of 2024. Of this, approximately EUR 310 million was spent on platforms other than Veikkaus, a nearly 15?percent?increase in non-Veikkaus online gambling.

Veikkaus’ international strategy

Veikkaus’ subsidiary, Fennica Gaming, played a crucial role in the company’s growth strategy during the first half of the year. Fennica Gaming secured three new client agreements in Brazil, France, and Virginia, USA, bringing its total signed agreements to fifteen across three continents.

Regina Sippel, CFO of Veikkaus, expressed optimism about the company’s trajectory, stating, “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, and the future outlook is bright.”

CEO Olli Sarekoski (pictured above) also expressed his trust in the company’s proactive approach to the upcoming overhaul of Finland’s gambling system, expected in 2027. “Veikkaus focused heavily on renewal and development in the first half of the year to ensure readiness for the partial multi-license gambling system outlined in the new draft legislation,” said Sarekoski.

Leadership transition

Veikkaus also announced a key appointment to its Board of Directors. Financial Counsellor Minna Pajumaa has joined the Board starting 1 September 2024. Pajumaa, who previously served in the Ownership Steering Department of the Prime Minister’s Office, has replaced outgoing Board member Pekka Hurtola.

The appointment of Pajumaa is expected to bring fresh perspectives to the Board as Veikkaus continues its journey toward a more digital and internationally competitive future.