Greece-based Intralot's 45 percent-controlled Turkish unit, Inteltek, has had the management fee for its one-year sports betting contract reduced from 12 percent of sales to 7 percent. The news was broken Friday by Greek financial publication Reporter.
Inteltek was established April 6, 2001 to explore business opportunities in the gaming sector in Turkey. The company has two shareholders: Turktell, with a 55 percent share, and Intralot with a 45 percent interest. Intralot held 25 percent of the shares until the beginning of December 2005, when it acquired an additional 20 percent from Teknoloji.
According to Reporter, Inteltek's initial sports betting management contract, awarded in 2003 and scheduled to expire in 2011, was annulled by Turkish authorities. Inteltek was subsequently awarded a temporary one-year sports betting contract until the new tender process to be held in 2008. Intralot's management had not disclosed the terms of the temporary contract, but merely said that management fees were lower than its previously awarded contract.
As a fully licensed company, Inteltek operates and manages all marketing, sales, corporate communications and risk management activities on behalf of the Spor Toto Organization. It also undertakes responsibility for its growing dealership network, carries out all planning, application and development of its Central Betting System and undertakes all risks of excessive payout loss without reflecting any obligations to the Spor Toto Organization.
The Spor Toto Teskilat Mudurlugu (State Sports Betting Organization) drew only $12 million in sales from Turkey's population of 70 million inhabitants in 2002 but has improved greatly since then, thanks in large part to the Idaa daily fixed-odds betting game launched in 2004. Sales grew from $167 million in 2004 to reach $988 million in 2005 and US$1.44 billion in 2006. Spor Toto's market share, meanwhile, grew from 9 percent in 2004 to 42 percent in 2006.
Teknoloji's Stake
In January 2006, Turkish businessman Alphan Manas parted ways with Teknoloji Holding, which he co-founded and of which he was a 50 percent shareholder. Manas started as project leader, then as the executive board member, representing Teknoloji Holding following the launch of the company until they transferred shares to Greek partner Intralot. The two partners sold their 20 percent shares of Inteltek, which have appreciated in the span of 19 by $80 million, ultimately valuing Intralot at over US$400 million.