Gambling Faces Greek Tsunami

If the Greek government wants to solve its dire financial state of affairs it must first pay back its outstanding debt owed to the European Union (EU) and the International Monetary Fund (IMF).

In the original proposal Greece plans to generate a proportion of the required funds by legalization internet gambling and selling off its shares in the state monopoly OPAP.

The legalization of internet gambling experienced a severe setback last month when the European Commission (EC) notified the Greek government that its draft proposal was not in accordance with EU laws. Instead of discussing the issues outlined by the EC, the Greeks pressed ahead with their proposal. The Greek parliament is pushing it and attached it to a must pass financial bill. However, due to Greece’s non-compliance the EC can instigate contravention proceedings and take the Greek government to the European Court of Justice. According to the latest news the Greek government has backed themselves and prepared to chance the risk.

One of the major issues is most probably the selling of the 34% controlling interest the government has in OPAP. Recently, Evangelos Venizelos, Greece’s Finance Minister surprised internet gambling industry observers by stating that the government might not sell its full stake in OPAP by the fourth quarter this year as envisioned.

He reiterated the fact that the government did not vow to sell OPAP, instead to rather use OPAP as a vehicle to harvest revenue so that the country’s public debt could be alleviated. At this stage the cabinet is looking at alternative methods that could be used to increase targeted revenues. However, Venizelos summed it up 100% when he notified Greece’s parliament, “OPAP’s value is not only its shares but also the value of exercising its management.” Politicians are not prepared to part ways with this control of management.

OPAP has no debt and is a money-making machine. The 34% stake owned by the state has a market value of approximately €1.17 billion. Should the state manage to sell its stake in OPAP to a strategic investor it would more or less receive €1.2 billion, an additional €500 million for the sale of internet gaming licenses could be added.

Venizelos said, “We have a clear-cut target to present €1.7 billion from privatizations by September’s end and towards the end of the year €5 billion.” Should the government not follow this path it could jeopardize the financial support package. One solution to the problem is to try and raise €400 million by extending OPAP’s license which expires in 2020. An additional option as part of the country’s gaming liberalization is to grant OPAP an exclusive license to operate all the 35,000 video lotto machines.