The investment publication Seeking Alpha carried a detailed article on the Greek gambling monopoly OPAP this week, delving into its history and the challenges of the Greek economy, tax and regulatory changes that will see the introduction of a more enlightened approach to online gambling.
The article notes that although OPAP controls 50 percent of the market in Greece and Cyprus, the remaining fifty percent comes from presently illegal internet gambling, a substantial reservoir of business that if legalised could considerably enhance OPAP’s profitability.
“It is estimated that illegal, online gaming in Greece generates revenue amounts comparable to OPAP’s top line numbers,” the article points out. “This means that currently OPAP only controls half of the market share despite having a legal monopoly, however this may soon change in OPAP’s favor.
“The Greek government has indicated that it plans to tackle this issue and is set to allow legalised forms of online gambling within Greece so that OPAP can compete with the illegal operators.
“The Greek government has begun discussions regarding how to combat illegal online gaming and whether portions of online gaming should be legalised.
“The next step in these discussions was a resumption of legislative discussions on September 12, 2010 [as of September 16th we are not aware of a public update]. The Finance Ministry estimates that illegal online games revenue is about Euro 4 billion (approximately $5 billion US Dollars).”
Seeking Alpha goes on to suggest that the Greek gaming market will expand to legalise online gambling, and that OPAP will capture most if not all of this market because of its exclusive gaming contract with the Greek government, including a right of first refusal on all gaming in the nation.
OPAP’s average 10-year Return on Equity is roughly 100 percent and the organisation employ’s almost no debt. Earnings have increased a total of 30 percent from 2005 through 2009, while OPAP’s price declined 65 percent.
The Greek government owns 34 percent of OPAP’s shares, one of the reasons why OPAP pays out almost all of its earnings (80 percent) to shareholders via dividends. The group earned an average of Euro 572,000,000 over the last 5 years.
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