Austerity hits gambling at OPAP
Posted By Admin on November 29, 2011
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* Greek gambling monopoly posts 16 pct profit drop
* Austerity hits gambling
ATHENS, Nov 21 (Reuters) – Austerity-hit Greeks
spurned gambling as their economy nosedived over the summer,
punching a hole in quarterly profit at OPAP, Europes
biggest betting company.
Unlike some recession-hit countries where more people turn
to lotteries as their last hope for quick cash, Greeks have been
gambling less after being hit with wage cuts and tax hikes by a
debt-laden government trying to avoid default.
OPAPs third-quarter net profit fell 16 percent to 135.4
million euros ($183 million), compared with a forecast for 130.5
million in a Reuters poll.
What they say about poverty boosting gambling is a myth,
said Kyriakos Toptsidis, head of OPAPs sales agents and who has
been operating his own outlet in northern Greece for 27 years.
When people do not have enough to eat, they do not buy
lottery tickets. They may not stop altogether, but they cut
down, he said.
OPAP, 34 percent state-owned and slated for a government
share sale next year, has been coping with recession better than
the broader Greek economy.
Retail sales, adjusted for inflation, have dropped about 25
percent from their peak in 2008, when Greece entered recession,
while OPAP sales are down about 20 percent.
OPAPs third-quarter sales fell 11.4 percent to 1.01 billion
euros, as people turned away from its two flagship games — Kino
and Stihima, which account for about 85 percent of total
revenues.
Our sales drop is certainly lower than other retail
sectors, like electronics and clothing, said one OPAP official
who declined to be named. But actual revenue growth is
impossible in such tough times.
Turnover from sports betting game Stihima fell 20.3 percent
to 346 million euros, while the popular Kino lottery dropped
14.4 percent to 516 million.
NO INTERIM DIVIDEND
OPAP has been trying to attract punters by offering new
games. In spring, it launched a string of new gambling products,
such greyhound racing, which improved its top line by 51 million
euros in the quarter.
People are still coming to gamble, but they are placing one
or two-euro bets instead of five or 10 as they did before,
Toptsidis said.
OPAP, which has a market value of about 2 billion euros, did
not announce an interim dividend, for the first time since
listing in 2000.
Last month the company said it would cut its dividend payout
to at least 50 percent of total profit this year, compared with
a usual payout of about 90 percent.
This comes after the governments decision to use OPAP as a
cash cow to boost state coffers. The company spent about 475
million euros this month to acquire an exclusive videolotto
licence in Greece and will pay another 375 million by
end-December to renew its betting monopoly for 10 years to 2030.
I do not see any profit growth before VLTs are fully rolled
out in 2013, said Stamatis Draziotis, an analyst at EFG
Eurobank Equities. OPAP expects videolotto to become its single
biggest profit driver by 2015.
The companys shares have halved in value this year, in line
with the Athens bourses benchmark index. OPAP trades at
4 times estimated 2011 earnings versus a multiple of 9 for
British group William Hill and 9.4 for Ladbrokes
.
($1 = 0.739 euro)
(Reporting by Angeliki Koutantou; Editing by Dan Lalor)
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