How is Veikkaus preparing for licensed iGaming in Finland?

The gambling monopoly story is a well-worn one, but Finland’s Veikkaus is planning to break the mould once the market liberalises in January 2027. Veikkaus has been in steady decline for some years now but historically has managed to obtain between 20% and 30% of Finland’s iGaming market.  

Canadian Gaming Association CEO Paul Burns recently said of the Canadian market: “Because of the large unregulated iGaming market presence in Canada, no one’s had a monopoly for 25 years, and that’s the reality.” 

The same can be said for Europe’s remaining monopolies, including Veikkaus. Finland has operated a thriving grey market for the last five to 10 years, and Veikkaus has unsurprisingly struggled to keep up with unlicensed peers that have not had to face the same restrictions as the monopoly.  

Not only has the operator faced highly innovative competition, but new player protection measures implemented in a 2022 update of the Lotteries Act in Finland also resulted in Veikkaus’ revenue taking a hit in H1 2024.  

“The visible decline in the purchasing power of consumers has affected Veikkaus’ business,” Group Managing Director Olli Sarekoski said in its first half 2024 earnings report. “Our number of customers is still at a good level, but the amount of money played by customers is average.” Active players increased by 15,000 during the three-month period to 2.5 million. 

Some close to the Finnish iGaming sector have suggested the government pushed through its gambling reform last summer to revive the suffering monopoly business. And Veikkaus is broadly optimistic it can complete this turnaround successfully. Sarekoski admitted in the earnings report that the operator was aiming to take a leading position in the competitive market.  

Welcoming a new leader 

The overhaul commenced with the hiring of iGaming EVP Jarkko Nordlund in September 2023. Nordlund has an extensive background in consumer entertainment, having spent years leading and advising the Finnish arms of television, music and streaming services like MTV, Universal Music and Canal Plus. Nordlund was undoubtably brought on as Veikkaus’ secret weapon, to build out a sufficiently competitive iGaming business.  

“I have a long background in the entertainment industry,” he explains. “For me, this industry is part of the same entertainment experience and entertainment wallet [as TV, music and streaming services].”  

Nordlund’s entrance to the business initiated a much broader overhaul of both the iGaming arm’s operations and tech and product offering.

Veikkaus VP Sports Betting Andreas Reimblad joined Veikkaus from Kindred in July 2024, tasked with building an updated betting product, sitting on the OpenBet platform.  

New sportsbook to drive Veikkaus’ iGaming arm

OpenBet won a tender process initiated by Veikkaus in September 2023 to source a new platform and managed trading services provider. Prior to this Veikkaus had used SBTech’s betting technology, but after it was acquired by DraftKings in 2020, the operator said it would wind down its B2B operations, in March 2021.   

“Our current supplier DraftKings announced they were not continuing with their B2B element. The development of the product has been far from ideal, when we’ve seen other operators being very quick in developing their product and platforms,” Reimblad says.   

“We recognise we wouldn’t have succeeded if we’d remained the same. We have had to make tangible changes to provide a better experience for the end consumer, because we’re not competing for the international operators’ [acknowledgement], we’re competing for the customers.” 

Alongside a new betting platform, the operator has opted to integrate new PAM and CRM platforms, as well as new apps and website frontends, which will launch in the coming weeks. The scope of the product refresh is massive. And Nordlund says it is his personal mission to ensure Veikkaus succeeds in the open market.  

“Everyone is waiting for Veikkaus to fail,” he says. “The competition will be fierce when the market opens, so we must be very competitive. Our aim is to challenge the mentality of our current position, so we need to secure market leadership.” 

‘We are the market’ for local sports 

On the sports side, Reimblad insists there is much more than just a platform change powering Veikkaus’ sportsbook transformation. For a number of years the operator has had an in-house trading team to price local sports like ice hockey, floorball and Finland’s answers to baseball, pesäpallo.  

Properly integrating and utilising this team is a core goal for Reimblad. “A big reason why we’ve used OpenBet is that we wanted those self-trading capabilities, as we really see it as a unique possibility for us. We can create markets and a product that no one else in the market can, with the accuracy that we can.”  

Generating these in-house odds will be a core part of Veikkaus’ competitive advantage, Reimblad says.   

“For some of the international operators, Finland will be a quite small market overall. So, this is one element that we can really stand out on. It’s not many that have their own local trading team who are actually doing the odds compiling for the market. I would even state that we are the market in some of the local sports.” 

Historically, Reimblad says Veikkaus has operated a high-margin betting product, and to improve the consumer’s overall betting experience, his team has been working to increase the player playback rate. “It’s not a secret that monopolies come with a history of low paybacks, and it’s been one way for the international operators to take market share. We have now started to be even more aggressive.” 

Payback rate is the percentage a player gets back for every euro they bet. Veikkaus has been slowly increasing that rate to improve the overall offering and, Reimblad says, to improve the product’s perception. Profitability has improved since this target was set by Reimblad last year.  

Leveraging the historic Veikkaus brand 

Nordlund says the transformation really commenced in January of last year. Part of the process is deciding how to leverage Veikkaus’ legacy brand in Finland, which is synonymous with both lottery and physical slot machines. Nordlund is wary that although brand recognition among consumers is assured, he is worried Veikkaus’ monopoly past could tarnish its new product.  

“Our brand is super strong, it’s domestic and reliable. But then we have to also be more entertaining [than we have been]. The negative side of the coin is because it’s a state-owned monopoly, the consumer might believe we can’t offer competitive odds,” he admits. “We are most concentrating now to the consumer experience and making that better, and that will be then powered by the brand.” 

Speaking to iGB in September 2024, local lawyer Antti Koivula and ex-Veikkaus executive Jari Vähänen said they expected Veikkaus to benefit against independent operators from its vast brand exposure. After all, Veikkaus slot machines are even found in local supermarkets.  

Does Veikkaus have a competitive advantage?

One key question raised by stakeholders in response to the government’s draft gambling bill last summer was whether Veikkaus would maintain any competitive advantages to independent operators, particularly in leveraging its decades-old player database and cross-selling users onto the new product suite.  

When Sweden liberalised its online gambling market in 2019, the monopoly Svenska Spel’s new licensed business was granted access to its historical database, but under the condition that players had to opt in to receiving cross-sell messaging. Veikkaus has been operating iGaming for some years and so has already built up a player base that would not need to be cross-sold from its land-based or lottery players.  

Nordlund says it is not yet clear what the rules for Veikkaus will be on this, as the sector awaits the final gambling bill. This was widely expected to be approved by parliament ahead of the Scandinavian midsummer holiday. 

“The operators in Finland need more details on it, but it looks like everyone may be able bring our customer base with us and keep on operating with them,” Nordlund notes. “But how do we define what the customer base is? [Is it players that have been active] within half a year to a year? These type of operational details needs to be clarified.”  

Sourcing the right talent 

The final component to Veikkaus’ transformation is, of course, talent acquisition. Nordlund recently poached a former colleague of Reimblad, Fatemeh Daneshzadeh, ex-product excellence manager for Kindred. Daneshzadeh joined Veikkaus in April as VP of digital channels.    

Nordlund says that although he is looking to recruit further experienced industry folk, he is also looking at other entertainment sectors where the experience could mirror that of iGaming. “We have hand-picked international expertise [from the sector] to come to work for us. Then we are recruiting from Netflix, Bolt and those [kinds of] digital companies,” he says.   

The business will ultimately maintain a mix of legacy Veikkaus staffers and new talent, which will encompass all the best parts of the entertainment industry. 

For Reimblad, he says Kindred’s transition into an FDJ company after the operator was acquired by the French giant meant his time at the company had reached a natural end. He was looking for a new experience and, once he’d met Nordlund, he realised what a fantastic leader he was.  

“He puts a lot of challenges on you and pressure, but he’s a fantastic mentor and he has all these ideas about wanting me to have the freedom to execute things how I like. That was a big reason for me. It was [also] all about the timing,” he recalls.  

A Swede among Finns

As a Swede, joining a Finnish company was a challenge initially, but Nordlund insists the company is becoming broadly more international and this is a deliberate effort to entice industry expertise from hubs like Malta. The company language is now English, Nordlund explains. 

“I’ve found some really strong local candidates and also met a lot of Finnish people living abroad and working with other gaming companies that might want to move back in the future. I think people really see us as a strong operator in Finland,” Reimblad says.  

Nordlund expects the wholesome work-life balance culture in Finland will attract talent over to Veikkaus. He praises Helsinki for its good schools and insists it is an easy commute to and from the office.  

With the transformation at Veikkaus well and truly under way, the operator expects to return to growth by next year. “We need to be more exciting, more entertaining, [and offer a] better consumer experience,” Nordlund concludes. Reflecting on the competition, Reimblad points out that while Finland is only a small focus for many of the independent operators, for Veikkaus, this market is its entire revenue. With that in mind, it’s certainly got a good shot at taking the lead.