Veikkaus forecasts Covid-19 hit of €300m on full-year 2020 profits

Veikkaus has said it expects to lose more than €300m (£269m) of profits in 2020 due to the impact of the coronavirus pandemic on its Finnish operations. As a result, the Finnish monopoly operator confirmed it will not be able to meet its revenue target for 2020 of €1bn as stated in the Finnish government’s 2020 budget. In its latest set of financial results, Veikkaus reported a 28.1% year-on-year (YoY) decline in its gross gaming revenue (GGR) for the first half of 2020, in which the firm took a €200m (£179m) hit due to Covid-19. H1 2020 GGR shrunk to €607.2m, while company profits tumbled by 33.6% YoY in the same period to €332.7m. During H1 2020, 55.9% of Veikkaus GGR came from retail gaming, amounting to €339.4m, while 44.1% came from the group’s online operations, generating H1 revenue of €267.7m. At a divisional level, revenue from casino games, which includes land-based slots, fell by 46% YoY to €243.2m from a previous high of €450.2m in H1 2019. Total slots machine revenue more than halved during the period to €137.8m, a fall of 58%. This was punctuated by revenue from its retail partner network dropping by 59% and a 56% YoY decline in its My Slots operations, where revenue shrank to €27.1m. Other casino game revenue also declined during the period, albeit on a smaller scale, falling by 9% to €105.4m. Veikkaus has said there was a “slight shift” towards its digital gaming operations with H1 turnover of €101m, down 0.9% from the same period in 2019. Lottery division revenue was affected by the pandemic, but on a less severe level than casino operations. Total revenue from the division fell by 4% YoY during the pandemic to €305.9m, with single-digit percentage drops in weekly and daily lottery games together with scratchcards. Total revenue from Veikkaus’ betting division fell by 22% YoY to €58.1m, due in part to the cancellation of sporting events during the pandemic lockdown period. Sports betting revenue fell by 38% YoY to €29.1m, while Totalisator revenue rose by 7% YoY to €28.9m in the same period. Veikkaus voluntarily closed its Finnish gaming arcades and retail slot machines network in March during the early stages of the pandemic, only reopening them at the end of June. Veikkaus CFO Regina Sippel said the company had endured an “exceptional and challenging” spring period due to the effect of Covid-19 on its operations. “Due to the coronavirus pandemic, our proceeds to society will remain at a significantly lower level than previously,” said Sippel. The Finnish monopoly operator has previously chosen to reduce its retail slot machine portfolio by more than 8,000 as part of a focus on responsible gambling. The firm also introduced several other measures, including compulsory authentication of slots players, which comes into force in January 2021. “We introduced significant changes in the spring, in order to reinforce the responsibility and safety of gaming. With these changes, we want to make sure that people to whom gambling causes problems have the chance to do their shopping more safely,” Sippel added.