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The gaming operators’ final year was a record-breaking success

The year 2016 was the last year of operations of the Finnish gaming operators Fintoto, Finland’s Slot Machine Association, and Veikkaus. At the beginning of 2017, a new gaming company was launched, as the gaming operations of the three previous operators merged into a single company called Veikkaus.

The new Veikkaus Oy is owned entirely by the Finnish State and has the exclusive right to operate all gaming in Finland. The gaming revenue continues to be used for good causes, to support social and health care organisations, art, sports, science, youth work, as well as the equestrian sports and horse breeding.

The total Finnish gaming market amounted to ca. EUR 3 530 million in terms of turnover during the year under review. This meant a growth of three percent as compared with the previous year. Foreign competition targeted especially digital gaming; it was estimated that the share of cross border gaming out of the total market remained under 8 percent.

Below you can find short reviews of each gaming operator’s year 2016.

Fintoto’s sales developed favourably

Fintoto Oy’s turnover went up from EUR 230.7 million in the previous year to EUR 235.3 million (+2.0%).

The company’s game sales developed favourably but the customers took a stronger interest in foreign betting objects. The increase in the international game offerings boosted the turnover; yet, at the same time, it also had a negative impact on the company’s financial result. The object compensations paid abroad went up by over two million as compared with the previous year, reaching EUR 4.8 million as a result of the increase in the volume of foreign gaming. This weakened the company’s financial result for its part.

The company’s result before the return to the field in accordance with the Lotteries Act was EUR 31.3 million (-1.2%). During the financial year 2016, a total of EUR 32.8 million (EUR 30.8 million) were returned for the promotion of horse breeding and the equestrian sports, including the shares paid to the Ministry of Agriculture and Forestry, and the Finnish Trotting and Breeding Association Suomen Hippos.

After the shares returned to the promotion of horse breeding and the equestrian sports, the company’s result showed a total of EUR 2.5 million of loss (in 2015: EUR 0.8 million of profit). The loss for the financial period resulted from a bigger amount of funds returned to the promotion of horse breeding and the equestrian sports in accordance with the Lotteries Act.

Fintoto’s share of Finnish gaming was ca. 3.6% (-0.1 percentage points as compared with the previous year).

The best result in RAY’s history

Finland’s Slot Machine Association RAY reached the best result in its entire history in 2016. RAY’s turnover amounted to EUR 809.4 million and profit to EUR 423.5 million. The turnover increased by 13 million euros (+1.6%) as compared with the previous year. RAY paid twelve percent of its turnover in lottery tax to the Finnish State, i.e. EUR 96.9 million.

The arcades, restaurant games, and digital games posted growth. The turnover increased most in the digital games (+14.2%), amounting to EUR 73.3 million.

The arcades included RAY’s Pelaamo and Klubi gaming locations. They generated a turnover of a total of EUR 110.1 million (+12.9%). The restaurant games grew by 2.1%, attaining a turnover of EUR 14.6 million.

For the gaming points and the Casino Helsinki, the turnover showed a slight decrease.

RAY’s loyal customers numbered 423 667 at the end of the year, and 50 000 of them had joined during 2016.

Registered gaming increased from 10.1% in 2015 to 11.8% in 2016.

The good financial result means EUR 317.6 million of support to social and health care organisations. That is the biggest amount of funds granted during RAY’s entire history. In addition, a total of EUR 108.2 million was paid to the State Treasury for the rehabilitation of Finnish war veterans.

RAY’s share of Finnish gaming was ca. 45.1 % (-0.5 percentage points as compared with the previous year).

During its last year of operations, Finland’s Slot Machine Association had 94 members.

A record-breaking final year of operations for the old Veikkaus

The old Veikkaus attained a record-breaking result, EUR 582.6 million (+8.5%). The total profit for the financial year will be used for supporting Finnish art, sports, science, and youth work.

We can calculate that the direct economic value generated by Veikkaus to society amounted to a total of EUR 799.3 million in 2016. In addition to this amount, the company paid a total of EUR 81.0 million of undistributed prize funds from the previous years to the Ministry of Education and Culture. Further, the company paid a total of EUR 110.2 million in lottery tax and EUR 25.5 million of VAT to the State.
The turnover for the financial year went up to EUR 2 204.5 million (+5.2%). The growth was based on successful product reforms and on the launch of new games and services.

Thanks to an increase in Internet gaming in particular, a bigger share of Veikkaus’ customers play registered, which, for its part, promotes responsibility and improves consumer protection. The share of registered gaming out of Veikkaus’ total sales went up to 69.6% (+4.5 percentage points) during the financial year. A total of over 135 000 Finns joined as Veikkaus’ loyal customers in 2016.

Gaming takes place more and more often in the digital channels. In 2016 their share of the total sales went up by five percentage points, representing up to over 48%. All in all, Finns spent EUR 1 065.6 million (+17.5%) on gaming through the digital channels. Finland’s largest consumer webstore veikkaus.fi had ca. 510 000 buying customers a week.

Sports games posted a turnover of EUR 531.5 million (+18.5%). The sales growth was especially due to product reforms and a large number of major sporting events. The most important reform was the revision of Fixed Odds Betting at the end of May. The turnover of Fixed Odds Betting (EUR 278.8 million) grew by 18.9% over the previous year.

Finland’s most popular gambling game Lotto had a turnover of EUR 380.0 million (-13.0%). The fall can be explained especially by the jackpots that were clearly smaller than those of the previous year. Other factors that reduced people’s playing of Lotto included the ban on oral marketing at the points of sale; switching over to other jackpot games; and the temporary interruption of standing entry gaming due to a game reform. Lotto was revised in November. As the customers had wished, you can now win more often in Lotto and bigger prizes are available more frequently.

Eurojackpot’s sales (EUR 251.7 million, +12.9%) were speeded up by big rollover jackpots. Viking Lotto’s (EUR 94.1 million, +24.7%) popularity was boosted by a successful reform, which brought with it bigger jackpots for perfect matches. In digital games, the games to show the biggest growth were the eInstants, which attained a turnover of EUR 183.4 million (+17.7%). The selection of eInstants is being extended constantly; during the year under review we introduced eleven new eInstants.

Veikkaus’ share of Finnish gaming was ca. 51.3%  (+0.5 percentage points as compared with the previous year).

More information

Fintoto Final Account 2016 (in Finnish)

RAY: Annual report and Corporate Social Responsibility Report 2016 in Finnish and in Swedish
RAY: Financial Statements 2016 in Finnish and in Swedish

Veikkaus: Final Account 2016
Veikkaus: Corporate Governance 2016 (in Finnish)

https://www.veikkaus.fi/fi/yritys#!/article/tiedotteet/yritys/2017/02/17-the-gaming-operators-final-year-was-a-record-breaking-success

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