BUSINESS

OPAP profit leaps by a quarter but online site performing “below expectations”

TAGs: greece, OPAP, sports betting, Video Lottery Terminals

opap-kamil-zieglerGreek betting monopoly OPAP saw profit rise 26% in Q3 thanks to cost-cutting and strong performances by its sports betting and scratch card products. OPAP reported revenue up 19.1% to €1.07b, earnings up 33% to €94.2m and profit of €55.9m, the upper end of analysts’ forecasts. For the nine months ending Sept. 30, OPAP revenue is up 12.9% to just under €3b.

OPAP’s Stihima sports betting product saw revenue rise 21% to €356.4m thanks to the second half of this summer’s FIFA World Cup. OPAP declined specifics on how much of this bonanza was generated via the new GTECH-powered online sportsbook, which launched two weeks prior to the football tourney in Brazil. But OPAP CEO Kamil Ziegler (pictured) told analysts that the site’s performance to date had been “not in line with our expectations.”

Ziegler blamed the site’s slow start to “adverse conditions” created by the fact that “24 interim companies are still operating in a very grey zone.” Greece infamously issued two-dozen interim online betting licenses to international operators in 2011 before revoking the licenses one year later and extending OPAP’s online monopoly until 2020. The ensuing legal squabbling has yet to be resolved, with Greek courts declaring the monopoly extension legal while European Union courts have concluded the opposite.

Ziegler said OPAP’s Q3 numbers provided “further evidence of stabilization” following the company’s post-acquisition restructuring. Third-party supplier costs fell 29% while staff costs fell 14%. OPAP says 347 employees have taken advantage of its voluntary redundancy program, which has so far cost the company €12.3m.

OPAP’s rollout of new video lottery terminals (VLTs) has been delayed. The company had planned to begin installing between 3,500-5,000 VLTs in Q4 but regulatory hiccups and negotiations with OPAP’s retail operators mean the rollout will not happen until Q2 2015. The company still hopes to have all 16k new VLTs installed by the end of 2015. GTECH, Scientific Games, Inspired Gaming and Synot will supply the VLTs.

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