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Veikkaus executive defends monopoly status
Veikkaus executive vice-president Velipekka Nummikoski has launched a robust defence of the operator’s Finnish gambling monopoly, warning that a change to a licensing regime would lead to a decline in funding for social causes and put players at risk.
Nummikoski weighed in on the ongoing debate about the operator’s future by pointing out that the business currently allocates 72% of profits to social causes in the country.
This, he said, would likely decline should foreign operators be allowed into the market. Nummikoski pointed to Denmark, where he said the percentage of profits returned to society from gambling had declined from 62% prior to opening of the country’s regulated igaming market in 2012, to around 44% today.
In addition, he said, the operator paid out around €160m to partners in its retail network each year, with this funding “of great importance”, especially in sparsely populated areas.
Nummikoski was responding to an article by Finnish journalist Senja Larsen, for the business newspaper Kauppalehti, in which she argued strongly in favour of abolishing the monopoly in favour of a licensing regime. Larsen wrote that Veikkaus was ultimately an “inverse Robin Hood” that was taking money from the poorest in society to pay its executives, without providing enough effective player protection controls.
However, Nummikoski disputed her claims by stating: “In Denmark, after the regime change, according to reports from the local authorities the volume of gaming has increased dramatically, especially in the most harmful, fast-paced online casino and sports betting products.
“Only Veikkaus requires a Finnish player to set daily and monthly gambling limits for fast-paced games. So Veikkaus isn’t chasing players’ last euro at all costs.”
While the operator’s advertising strategy has come in for criticism in recent weeks, prompting a total shut-down of marketing for non-lottery products, Nummikoski added that Veikkaus advertised much less than competitors.
“Veikkaus' advertising budget is less than 1.5% of turnover and certainly one of, if not the smallest, in the industry,” he said. “Our advertising budget this year is less than €40m, and has fallen well over €10m in recent years.”
He contrasted this with Sweden, where advertising by gambling operators has been a key point of contention since the country’s igaming market launched in January.
“[In Sweden] media spend by gambling operators is estimated to be 15 times higher than in Finland. Indeed, the [Swedish Gaming Authority] has already had to deal with excessive advertising,” he said. “In a competitive market, you have to be after the last euro at all costs. It will be interesting to see how this is affecting the disadvantaged.”
In conclusion, Nummikoski said the current Finnish system is as far from an “inverse Robin Hood” as gambling could be.
“The proceeds of gambling are always used for something, and in Finland profits are earmarked for good causes,” he said. “Of course, the returns could also go to venture capitalists.”