Greek betting operator OPAP started 2016 on the wrong note as its profit fell more than one-quarter due to increased taxation.
According to an interim management statement released Monday, OPAP’s gross gaming revenue fell 4.4% to €340.7m in the three months ending March 31. Net gaming revenue was down 2.5% to €153.8m, but applying the new 35% gaming tax retroactively to Jan. 1, net revenue was down 11.5% to €139.6m.
The retroactive tax took an even greater toll on quarterly profits, which would have fallen 9% to €52.8m but actually fell 26.3% to €42.8m. Profits would have been even lower had the company not kept a sharp lid on costs, including cutting CSR expenses in half, which led to a 24% reduction in total marketing spending.
The struggling Greek economy took a bite out of OPAP’s Stihima sports betting revenue, which fell 14.1% to €102.5m. The betting decline was partially offset by a 2.4% rise in lottery revenue to €201.1m, while the Instant & Passive division was down 8.7% to €37.1m.
Chairman/CEO Kamil Ziegler noted the “severe impact” of the new tax rate, although the new regime is apparently preferable to the government’s original plan to slap a five-eurocent tax on all of OPAP’s gambling products, which OPAP had claimed would result in a significant reduction in punters’ desire to wager.
While punters were spared the turnover tax, Ziegler noted that OPAP’s results were nonetheless depressed by “persisting pressure on disposable income and private consumption” as the Greek economy continues to flounder under the government’s austerity measures.
Ziegler is slated to relinquish the CEO’s position to make room for ex-Ladbrokes man Damian Cope, who will take the chief exec baton as of July 1, leaving Ziegler with the sole title of chairman.
