Greece loses revenue as OPAP suspends VLT launch

Greece loses revenue as OPAP suspends VLT launch

Monday, July 6, 2015 Totally Gaming
OPAP will run 35,000 VLTs in total

The ailing Greek economy will miss out on millions of Euros after gaming firm OPAP further delayed the planned launch of its video lottery terminals (VLT).

OPAP – whose shares have not been traded in Greece since the Athens Stock Exchange was suspended on June 26 – said it needs more time to ensure the machines comply with new rules on machine-based gambling introduced by the current government.

The rules, which were introduced by the Hellenic Gaming Commission on June 12, include lower jackpot levels, daily loss limits and length of play time allowed.

OPAP, which won the exclusive right to run VLTs in Greece back in 2011 but has seen a series of delays since then, had predicted it would make between up to €1bn ($1.1bn) per year in revenue from the machines.

“The new regulation, decided by the Gaming Commission only a few days prior to the scheduled launch of the VLTs, and without prior consultation with OPAP, contains a number of unprecedented restrictions, which defy international best practices of responsible gaming, render the project no longer economically viable and contain technical requirements that make timely implementation impossible,” an OPAP statement read.

“In any case, OPAP assures its investors, its partners and its employees that it remains absolutely focused on its investment and shall continue to take all appropriate actions to arrive at a reasonable and balanced regulatory framework that secures public interest and public revenues and at the same time allows the economic viability of the VLT business for OPAP and its operators.”

In a June proposal that Greece had made to creditors, the government estimated that it could reap some €35m ($38.7m) in 2015 and €225m in 2016 in revenues from VLTs.

The new rules set a daily loss limit of €80 a player and limit the amount of time people can play to 10 hours a week and 32 hours a month, down from previous limits of 12 and 40 hours respectively. The maximum jackpot of gaming halls is now limited to €20,000 from the previous €100,000.

OPAP said earlier this year that it aims to operate 16,000 VLTs by the end of 2015 in its own 'Play' halls, and will also make another 19,000 available to sub-contracted venues. The company has picked IGT/GTECH, Scientific Games, Inspired Gaming and Synot as its VLT vendors.

OPAP shares were down 2.13 per cent at €7.81 in Athens when they were last traded on June 26. The company’s shares are also traded on the North American OTC Markets Group, and have been flat at $4.0 since last Monday. 

Last week analyst Jordan Flannery of the Seeking Alpha trading website suggested that OPAP was one Greek stock that offered good value for investors.

Flannery said: “Shares of OPAP have performed very poorly in recent quarters due to the ongoing economic situation in Greece despite the fact the company has been able to produce strong bottom line growth.

“On Monday, the firm’s shares fell by 9.9 per cent in mid-day US OTC Markets trading and currently trade for very attractive fundamentals. At 11.8x 2014 earnings and sporting a 9.8 per cent dividend yield, shares of OPAP could be attractive to long term value investors amidst this downturn.”

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