Veikkaus to kick off slot reduction in January 2020

Finnish gambling monopoly Veikkaus is to begin reducing the number of slot machines operating across the country from January next year, with around a fifth of its installed base to be taken out of service by the end of the year.

This reduction will begin in tandem with the expedited roll-out of new social responsibility guidelines announced in October this year. This includes mandatory player identification controls, which the operator has previously suggested will prompt a decline in slot play, facilitating the reduction in numbers.

Veikkaus aims to reduce the total number of machines to 15,000 by the end of 2020, suggesting that 3,500 will be phased out.

Executive vice president Marko Peltokorpi explained that Veikkaus was coordinating the reductions to ensure the impact was spread across all partners, sectors and geographical areas, and to factor in criticism that there were too many machines in certain outlets.

As such, it will implement a limit on the number of slots in each point of sale, limiting numbers to a maximum of seven in hypermarkets and service stations, which currently host “dozens” of machines, Peltokorpi said.

The maximum number in all other outlets, such as shops, kiosks and restaurants, drops to five. Certain terminals will be unable to integrate the mandatory identification technology from 2021, and as a result will be removed.

However, Peltokorpi added, this will have an impact on Veikkaus gross profit, which is expected to decline by around €30m in its full-year results for 2020. The commission paid to retailers is likely to decline by around €4.5m (£3.8m/$5.0m), while depreciation may drive down the value of the retail business.

“The reductions are noticeable and will certainly be visible to customers,” Peltokorpi added.

To ensure stakeholders are aware of the progress of the reduction drive, Veikkaus will provide updates every two months, with the first to be published in March 2020.

This process will continue to 2025, when the operator expects to have between 10,500 and 13,500 machines in operation across Finland.

Amid questions about its future, and growing calls for its monopoly status to be scrapped, Veikkaus has been stung into action, with the company introducing a new socially responsible advertising code alongside the new slot machine controls. Mandatory identification on the machines was due to be completed by January 2022, but has been pushed forward by a year.