Greek lottery and betting operator OPAP reported a double-digit profit gain in Q3 despite somehow suffering a betting revenue decline during a World Cup summer.
On Tuesday, OPAP reported revenue of €369m in the three months ending September 30, a 3.2% rise from the same period last year. Gross profit from gaming operations was up 5.2% to €146m, but earnings slipped 6.1% to €87.2m and net profit dropped 10% to €39m.
The company was keen to point out that the negative earnings and net profit figures were actually in positive territory when viewed through a ‘like for like’ filter, i.e. stripping out the €14.7m the company netted in Q3 2017 from a reversal of litigation provisions.
OPAP’s revenue has gotten a boost all this year from its ongoing rollout of its new video lottery terminals (VLT) and self-service betting terminals (SSBT). As of September 30, OPAP had installed 16,043 VLTs, up from 13,775 at the end of Q2, while the 4,016 installed SSBTs was essentially unchanged.
The importance of those VLTs can’t be understated, as they contributed revenue of €50.8m in Q3, three times greater year-on-year. On a year-to-date basis, VLT revenue is up nearly six-fold to €140.2m. OPAP ultimately plans to install a total of 25k VLTs under the terms of its deal with the government.
Lottery operations remain OPAP’s bread and butter, although Q3 lottery revenue was down 2.2% to €189.6m. The Instant & Passives segment was also negative, falling 11% to €31m.
Sports betting suffered an even bigger drop, falling 13.2% to €97.5m. OPAP blamed the decline on “unfavorable sports results, including the World Cup Final match itself.”
The quarter was supposed to see the long-delayed launch of OPAP’s new online sports betting platform, Pamestoixima.gr, but the commercial launch didn’t actually happen until this month. The platform, which offers a wider variety of betting events, plus live streaming and cash-out options, is also available via a mobile betting app.
OPAP ended Q3 by announcing a deal to acquire a €50m stake in TCB Holdings, the parent company of the Stoiximan Group, which operates online gambling in Greece, Cyprus, Germany and Romania. However, the deal has yet to close and OPAP’s Q3 report made no mention of its progress.
OPAP is looking to solidify its online position in Greece as the country prepares to (finally) update its online gambling licensing regime. The current plan is to charge would-be licensees €4m for the right to offer online sports betting while other online options will cost an additional €1m.