Veikkaus Oy’s 2022 profit was roughly the same as last year. Fennica Gaming, which was the first subsidiary of the group, had promising results and should contribute significantly to the group’s market presence. Despite the optimistic comments of board members, Veikkaus’ undisputed dominance over the Swedish market may be threatened by rising political pressures.
Financials Remain Stable Across the Board
The 12-month-end 31 December period saw a similar performance to 2021. The revenue reached EUR1,07 billion ($1,14 trillion), which is a 33% decrease compared to last. Both operating income and financial profits saw little change at EUR680.3million (7$24.97 millions) and EUR680.0million (7$724.67 Million).
The agency’s iGaming offerings contributed 50.3% of the gross gaming revenue. Brick-and-mortar casinos accounted for 49.7%. Veikkaus’ business model continues to revolve around lotteries, which accounted for EUR600.0 million in revenue ($639.52 millions). While land-based casinos earned a respectable EUR 347.6 million ($369.55 millions), betting revenues fell 16.9% year-on–year to EUR123.8million ($131.97 million).
Despite rising inflation, expenses remained stable. For a 39.8% decrease in lottery taxes, the monopoly paid EUR36.3 million (38.75 million). The net amount was balanced by the EUR132.5 million ($141.51million) 3.3% increase in material and services costs. Veikkaus, a state-owned entity with a total net income of EUR671.0million ($716.4 million), will be used to fund government initiatives and projects.
Foreign Operators Continue To Siphon Profits
Veikkaus’s latest press release stated that the stagnation was primarily due to several unfavorable circumstances. Regina Sippel, CFO of Veikkaus, explained that even though the venues are fully staffed, consumer activity is still below pre-pandemic levels. She pointed out that the manual limit for slot machines in 2021, war in Ukraine and an uncertain economic climate put significant pressure on potential gamblers.
Increased consumer uncertainty and lower purchasing power have… impacted Veikkaus game demand
Regina Sippel, Veikkaus CFO
Veikkaus is a state-owned entity, which means that it remains committed to creating a responsible gaming environment. The company plans to implement compulsory authentication for ticket-based gaming in 2023. This will cover most of its offerings. But, foreign operators continue reducing the monopoly’s online market share. They operate outside of the country’s player protection regulations, putting increasing numbers of players at risk.
Veikkaus faces trouble politically, even though revenues are stable. The increasing number of foreign operators siphoning money overseas and causing damage within the borders of the country is making politicians increasingly weary. Three major parties have stated a desire for Veikkaus to be abolished and for a similar licensing system to Sweden’s. The agency plans to transition by 2025 so that competition is not a problem.