The Swedish horse racing monopoly AB Trav och Galopp (ATG) and the Finnish Equestrian Federation Suomen Hippos have established an online gambling joint venture (JV) to welcome the reform of the Finnish gambling industry.
The Finnish sports betting joint venture of ATG (yet to be named) will provide sports, horse racing, and online gambling for players in the competitive Finnish gambling market. Under the joint venture, ATG and Suomen Hippos will maintain a 50/50 ownership split, but profits will be distributed 40% to ATG and 60% to Suomen Hippos.
This move was taken after Finland pushed to open its online gambling market. The parliament debated the Finnish gambling reform bill last month, which is expected to be approved this summer. If passed, the bill will open Finland's online gambling market to private operators starting from January 2027.
Under the new model, Veikkaus will continue to maintain its monopoly on lotteries, scratch cards, and physical slot machines. Private operators will be allowed to offer online betting and casinos as well as horse racing, which is the latest addition to the November bill.
The headquarters of the joint venture will be located in Helsinki, Finland, aiming to support the Finnish horse racing industry. Sixty percent of the joint venture's profits will be reinvested in the horse racing industry.
Minna Mäenpää, CEO of Suomen Hippos, stated in a release: "We believe that the newly established Finnish joint venture offers us the best opportunity to positively and responsibly influence the future of the horse industry."
"The Nordic trotting cooperation is now and will become even more important in the future, and this solution enhances our ability to further develop the sport and the conditions for operating the horse industry."
ATG and Suomen Hippos Equestrian Dividend Joint Venture
Mikael Bäcke, the Finnish operations manager for ATG, stated that the joint venture is an "important" investment for the group.
"Changes in the gambling license market mean that the future of Finnish horse breeding and horse racing will receive an equal share of gambling revenue from Veikkaus and their new gambling company through data and image agreements," Bäcke said.
Finnish Gambling Reform Promotes Competition
The Finnish gambling reform will allow Veikkaus to compete directly with private operators (such as the newly established sports betting joint venture).
The gambling industry reform will allow Veikkaus to obtain a license to operate independent business units that will compete with private licensees. However, Veikkaus will retain exclusive rights to operate its retail slot machines and lottery departments.
In recent years, the gambling monopoly has been on a decline. In the financial report for the first half of 2023 released on September 2, the group's CEO Olli Sarekoski noted that the profit margin was below expectations.
In its full-year performance for 2024 (released on March 5), Veikkaus's sales revenue fell by 7.3% year-on-year to 956.2 million euros ($1.02 billion/£800.1 million).
One factor contributing to this decline is illegal websites and offshore operators. H2 Gambling Capital estimates that domestic spending on illegal games in 2024 will be 550 million euros.
