Eye on Europe - Jan. 5, 2006

5 January 2006

Finally Payback Time -- Compania Nationala 'Loteria Romana' S.A., the Romanian National Lottery, will be partially privatized. Twenty percent of the lottery's stock will be transferred to a "property fund" intended to pay back people whose property was confiscated by the former Nicolae Ceausescu¹s Communist regime. Another 7 percent will be sold to employees of the National Lottery, and 5 percent will be publicly listed and sold through the Bucharest stock exchange.

Don't Play Games with Neelie -- Even after a strong warning of the European Commission, the French government introduced restrictions to foreign companies' investments in French gambling companies, such as casinos, calling the change a "modernization" of the current legislation. European Competition Commissioner Neelie Kroes, however, was quick to remind the government that protectionism was not the right response to the challenge of economic reform. Don't play games with Neelie. This is the same woman who opened a formal investigation under EC Treaty state aid rules to examine the British government's plans to sell the Tote.

Flux and Reflux -- Germany's FLUXX AG, a service provider for lottery companies and racecourses, is acquiring a 38 percent stake in the holding company QED Ventures Ltd. (QED), which operates an international online sports betting portal and a franchise model for sports betting shops under the "myBet.com” brand. FLUXX, which is a partner for major Internet players (AOL, Lycos and freenet) and a supplier of its own lottery and betting platforms, intends to increase its share in QED at a later stage and to secure a majority interest of up to 81 percent. The purchase price for 38 percent of the shares of QED is 3 million euros. The price for increasing the shareholding at a later stage to up to 81 percent was fixed at an additional 3 million euros, plus a subsequent capital increase for cash amounting to 1.5 million euro.

Big, Bigger, Biggest -- Italian Lottomatica S.p.A. is reporting lotto receipts turnover of 7.3 billion euros for 2005 (with no a comparative figure from previous periods). Lottomatica is the worldwide leader in lotteries/lotto sales, followed by: 2. the U.K. National Lottery; 3. LAE (Spain); 4. Kookmin Bank (Korea); and 5: SISAL S.p.A. (Italia).

The Times They Are a Changin' -- Spanish lottery ONCE, operated by the National Organization of the Blind, will report a loss for the first time in its 67-year history. Despite of a turnover of 2.5 billion euro in 2005, the management had to show a loss of nearly 5 million euro. According to President Miguel Carballeda, the slump in ONCE coupon sales is due to "aggressive competition from new national and international games." Twenty-three thousand visually impaired vendors sell its unique lottery coupon on the streets. Perhaps the group's highly criticized management should accept that bettors like to play from home and buy there electronic betting slips via Internet.

No Privy of OPAP in 2006 -- Several media outlets are reporting that the Greece Government is planning a further reduction in its OPAP stake. While on a visit to the United States, Finance Minister Alogoskoufis is said to have pre-announced the priorities of his government's privatization plans for 2006, which include a further reduction of its stake in OPAP, provided that the necessary amendment to Greek law is introduced. IGN checked the information, and contacted OPAP CEO Basile Neiadas, who responded by saying, "We have never heard our Minister of Finance declaring that the government's privatization plan for 2006 includes a further reduction of its stake in OPAP. Besides that, we have contacted the Ministry of Finance and they have confirmed to us that OPAP is not included in the government's privatization plan.

Rob van der Gaast has a background in sports journalism. He worked for over seven years as the head of sports for Dutch National Radio and has developed new concepts for the TV and the gambling industry. Now he operates from Istanbul as an independent gambling research analyst. He specializes in European gambling matters and in privatizations of gambling operators. Rob has contributed to IGN since Jul 09, 2001.