Veikkaus to spend €50m on responsible gambling measures

Business News

Veikkaus will continue to vigorously implement its responsibility development measures during the coming year. 

The Board of Directors approved the guidelines at its December meeting.

During 2020, Veikkaus will, among other things, promote mandatory identification in slot machines and other games, significantly reduce the number of distributed slot machines, estimated at approximately 3,500, and implement a new, more responsible marketing strategy.

It is also intended to develop more effective accountability solutions together with authorities and adverse actors.

Responsible gaming measures have been planned and will continue to be numerous in the coming year. We will be involved in the planning of this work, for example, with those dealing with gambling problems, as well as gambling addiction experience experts, says Pekka Ilmivalta, Director of Responsibility at Veikkaus .

The actions are part of Veikkaus’ new strategic plan, where responsibility plays a very important role. A safer and more responsible gaming environment will underpin everything in the future, as CEO Olli Sarekoski said at a media conference on the last day of October.

Veikkaus has also decided to renew its reporting. It will be standardized so that in the future the volume of all game groups will be described through the game margin, ie the losses of the customers. It is the profit from gaming activity minus the winnings paid to the players.

The new practice is consistent with the International Financial Reporting Standard (IFRS). A similar reporting model is used by two Nordic national gaming companies, Svenska Spel in Sweden and Danske Spil in Denmark.

Reporting through gaming has already been used in casino and table games, says Regina Sippel, Chief Financial Officer of Veikkaus.

Veikkaus reports on the future development of the economy and the disadvantages of gaming simultaneously, twice a year. Economic research is commissioning Veikkaus to conduct a study on the development of gaming handicaps. 

“At the same time, we will continue to monitor more closely the success of our gaming prevention measures,” says Sippel.

The new reporting policy will be implemented for the first time in Veikkaus’ 2019 Annual and Sustainability Report, which will be published in February-March 2020.

Responsibility is also emphasized in the management’s performance bonus.

Responsibility will continue to play a significant role in Veikkaus’ management’s performance-based reward model in 2020, as well as in 2019.

Veikkaus management’s performance rewards include, among other things, evaluating the effectiveness of operations. It has a weight of 40% and is measured by operating expenses as a percentage of gross margin. Other criteria for rewarding management are the number of recognized customers (weight 35%) and the development of staff experience (weight 25%).

If the liability indicator’s threshold for gaming damage is exceeded, that 40% efficiency measure will be cut off completely from the reward.

Veikkaus’ corporate responsibility measures for 2020 also have a downward effect on earnings, estimated at around EUR 50 million for 2020.

Veikkaus’ total revenue is estimated to fall in 2020 to the same level as the three gambling companies (Veikkaus, RAY and Fintoto) in 2014. At that time, the total amount was EUR 963 million and the lottery tax was EUR 205 million.