Greek Finance Minister George Alogoskoufis stated with great authority on Aug. 1, 2005 that he would do everything in his power to guard the monopoly of OPAP, the country's exclusive betting and lottery licensee. He stressed OPAP's great contribution in promoting Greek sports and culture and said this trend would continue for years to come.
Not even two months later, OPAP S.A. CEO Basile Neiadas, announced, "We must not see the abolishment of the monopoly only as a threat that you will lose a share of the domestic market. It also provides endless opportunities."
Neiadas said OPAP was not worried about "a possible freeing-up of the Greek betting market, as it would provide greater opportunities for Europe's biggest gaming company."
With a market cap of 6.5 billion euro, OPAP is the third largest company listed on the Athens Exchange. Founded in 1958, the company went public in April 2001, with the Greek state placing a 5.36 percent stake at 5.5 euro per share. Two more trenches were placed in July 2002 (18.9 percent at 8.4 euro per share) and July 2003 (24.45 percent at 9.44 euro per share). The fourth OPAP offering (16.44 percent at 24.14 euro) in July 2005, was oversubscribed by three times.
The Greek state still owns 34.4 percent of OPAP, meaning that roughly one-third of the company is directed by Alogoskoufis, who is against giving up the state monopoly. The remaining two-thirds is under the direction of Neiadas, who it seems is favoring free enterprise.
What, then, does the future hold for OPAP?
Shareholders should at least know whether the company intends to target only local or expand to include worldwide operations. The Greece population, by the way, is only 10.5 million, and more than 10.5 million Greeks live outside the borders of the Hellenic Republic.
Going international means that OPAP would have to focus on mastering new territories like global marketing and interactive distribution techniques. Considering that interactive gambling is not allowed in Greece and that the company is a strong opponent of illegal betting in Greece--it even created a task force to stop foreign betting activities--this would entail quite a turnaround, one that demands time for implementation.
Neiadas said that OPAP will act accordingly.
"As you well know, each sovereign EU state is responsible for defining the framework within which gaming is carried out," Neiadas said. "As far as Greece is concerned, in 2000 the Hellenic Republic granted OPAP a 20-year concession at a certain cost."
Greek legislation, Neiadas explained, therefore protects such exclusivity and allows the state to:
- regulate the industry properly;
- ensure fair and proper dealings with the public; and
- protect social interest when appropriate, limiting any potential side effects that increased gambling may have on the community.
"Within this framework," he said, " I have clearly stated in a number of occasions that the company will continue to exercise its privileges (the 20-year license and the right of first refusal). However, if and when the market will be deregulated, then that would not necessarily be a threat for OPAP.
"There are a number of competitive advantages for OPAP, such as excessive reserves, know-how and a brand new state-of-the-art IT system, that could even be considered as an opportunity for international expansion.
"In any case, our efforts remain towards the protection of our rights for the time being and at the same time, actively pursuing to eradicate all illegal activity, which comes to our attention."
Neiadas' remarks, despite his prudence, certainly won't applauded by the European Lotteries (EL), which is fighting on several EU platforms to keep the state monopolies in place.
OPAP's free-market statements will indeed create a shock among the EL's tightly knit membership, which looks to national, stated-owned betting organizations as the cornerstone of their existence. That should make things interesting, considering that OPAP is itself a member of the association.
The EL Codes of Practice states: "Bearing in mind the prime objective of raising money for the public good, the members of the association will promote maximum efficiency to optimize returns on behalf of their governments."
Above that, the EL states that each member must be an organization "within the European sphere eligible for regular membership that is licensed or authorized by a jurisdiction domiciled in a state recognized by the United Nations who, in accordance with prevailing national law, may issue a license or authorization to operate such games where the annual sales volume of such games form the greater part of the organizations total gross revenue and whose net revenues for the greater part are dedicated, by public decision, to good causes and/or the state exchequer."
The first cracks in the EL-organization are visible.
And by the way, what will happen when shareholders of OPAP (including listed EL members Lottomatica and Intralot) earn more than what the greater part of the good causes pays out?