Greek betting and lottery operator OPAP started 2018 on the right foot, posting gains in revenue, earnings and profit in the first quarter.
OPAP’s official figures show gross gaming revenue of €377m in the first three months of 2018, up 5.1% from the same period last year. Earnings increased 11.1% to €87m while net profit jumped one-fifth to €40m.
OPAP CEO Damian Cope credited the earnings and profit improvements to better cost controls, a lower effective corporate tax rate and a newly renegotiated commission rate with its retail partners.
A number of OPAP agents declined to sign the new contracts, leading to the number of OPAP shops in Greece falling from 4,367 at the end of 2017 to 3,836 by the end of Q1. OPAP says it expects this number to be back up over 4,000 by the end of 2018.
OPAP’s mainstay lottery vertical reported revenue falling 15.4% to €189m due to a lack of double-digit jackpots in its Joker product and “mild pressure” on Kino operations. The Instant & Passives vertical’s revenue dipped 1.8% to €37.8m.
Sports betting revenue improved 12.6% to €107.4m due to a “material contribution” from its Inspired Entertainment virtual sports games and increased contribution from self-service betting terminals (SSBT), which come courtesy of Playtech’s BGT Sports division.
OPAP began rolling out its new SSBTs midway through last year and added over 700 machines in Q1, bringing the total installed base to over 2,200 at the end of the quarter. Cope claimed the results from OPAP’s SSBTs in Cyprus “suggests an argument for increased density.”
The video lottery terminal (VLT) segment contributed €43.4m, up from just €1.9m in Q117. OPAP began rolling out its allotted 25k VLT products last year and had 11,519 machines in operation at the end of Q1 across 239 Play Gaming Halls and 1,354 agencies. The company claims it remains on track to have around 20k VLTs installed by the end of the year.
Sadly, OPAP’s new digital sports betting platform won’t go live until Q3, meaning it won’t be in place to take advantage of the 2018 FIFA World Cup as originally planned. Cope claimed the delay was necessary “to remove the complexity of an additional technology migration” during the World Cup frenzy.
OPAP added that its “loss-making” horseracing business would require “a full strategic review and further optimization of the operating costs.” Cope said the goal was to make the product “sustainable” but emphasized that “the status quo cannot continue.”