Online growth pushes Paf to record revenue in 2024
Paf Reports Record Online Revenue Despite Increased Tax Burdens on Land and Sea Operations in 2024
Paf, a leading operator in the Nordic gambling sector, has announced remarkable growth in its online gambling revenue for the 2024 financial year. This upward trajectory, however, has been somewhat tempered by the impact of higher tax rates on its land and sea gaming divisions.
According to Paf’s comprehensive financial report for the year ending December 31, 2024, the group achieved a record revenue of €183 million ($207.4 million), representing a 3.3% increase from the previous record of €177.1 million set in 2023.
Online Revenue Surpasses €161.2 Million
Paf’s online revenue reached €161.2 million in 2024, marking a notable 4.8% growth from the prior year. Key growth drivers included strong performance in slots and sports betting, which have become increasingly popular among players.
- Registered customer base surged to 685,406, an 11.4% increase year-on-year.
- Future expectations indicate continuous growth in active customer numbers through advanced marketing strategies and technological innovations.
Meanwhile, the land and sea segment, encompassing gaming operations within arcades and aboard cruise ships and ferries, experienced a decline in revenue, dropping 6.4% to €21.8 million. This downturn can be attributed primarily to increased lottery tax rates in Finland, which surged from 1.3% to 2.7% of revenue, escalating tax payments significantly from €1.3 million to €2.7 million.
Despite this setback, Paf identified positive trends within the land and sea segment. Passenger numbers rose by 2.0%, and partner satisfaction metrics reached unprecedented levels.
Tax Reforms Affect Paf’s Profitability
While overall revenue experienced significant growth, Paf’s net profit took a hit due to escalating tax obligations across various markets. In 2024, the group incurred €11.8 million in additional tax expenses compared to the previous year, driven by tax hikes in Finland, Sweden (22%), Estonia (6%), and Latvia (12%). These adjustments pressured Paf’s financial health.
CEO Christer Fahlstedt conveyed a long-term perspective on these tax increases, stating, “We had a strong 2024, and while rising gambling taxes are impacting our earnings, we are well-positioned to manage these changes.” He emphasized the importance of taxation for corporate responsibility and societal contribution.
Net Profit Declines by 1.5%
Paf’s financial reporting also revealed a slight decline in net profit, which decreased by 1.5% to €54.3 million. This downturn was attributable to elevated costs in materials and services, alongside increased staffing and depreciation expenses.
The company’s pre-tax profit stood at €59 million, a reduction of 1.7% year-on-year, with substantial tax contributions recorded at €5.7 million, in addition to accounting for €1 million in deferred taxes.
A Commitment to Sustainable Growth
Despite the dip in net profit, Paf reaffirmed its commitment to social responsibility, allocating €21.5 million to community initiatives, including culture, youth programs, sports, and environmental projects. Chairman Mikael von Schantz commended the company’s dedication to sustaining its societal contributions year after year amidst financial challenges.
In line with responsible gaming practices, Paf adjusted its player loss limits. Effective March, players aged 25 and over are restricted to a maximum loss of €16,000 within a 12-month timeframe, down from €17,500. New restrictions apply for younger players, with limits set at €6,000 for ages 20-24 and maintaining a €1,800 limit for those aged 18-19.
Fahlstedt commented, “Our results demonstrate that robust performance and responsible gaming are not mutually exclusive. We are determined to remain a sustainable entertainment provider.” He expressed concern over competitors, like state-owned Veikkaus, who opted to raise their loss limits, indicating a contrasting approach to responsible gambling.
