World Report

The popularity of its new product, Kino, has brought higher profits to Europe’s biggest gaming firm

Plans to sell 10 percent of the state holding in OPAP would require a change in the law.

he Greek gaming company OPAP (the Greek Football Pools Organisation) is on a winning streak thanks to its launch of a new game.

OPAP’s net profit of 505 million euros (£350 million) for 2004 was above analysts’ expectations. The 115 percent increase was partly attributable to the reversal of provisions that had weighed on the company’s results for 2003 and partly to the success of Kino, the new fixed-odds numerical game OPAP rolled out in Greece over 2004.

Excluding the gain from freed-up provisions, net profit stood at 409.4 million euros (£284.3 million), an increase of 40.6 percent. Net profit in the fourth quarter amounted to 130.1 million euros (£90.3 million), an increase of 63.9 percent.

Kino, the latest of a number of successful games introduced by OPAP, has rapidly become a key generator of revenue for the company, posting sales of 944.1 million euros (£650.5 million) in 2004, around 30 percent of group sales. Up to now the game has been available only through the company’s dedicated network of 5,000 agents spread across Greece and Cyprus, but consideration is being given to making it available in other selected locations, such as casinos and cruise ships.

OPAP is Europe’s biggest betting company. Founded in 1958, as a public legal entity, it became a limited company in 1999. Now semi-privatised, following a successful initial public offering in 2001, it is 51.15 percent owned by the Greek state, with the rest in the hands of private, mostly institutional investors.

The Greek gaming market is worth more than US$6 billion (£3 billion). OPAP holds an overall share of 42 percent; its share of the Greek lottery and sports betting market is around 78 percent. With gaming continuing to expand, OPAP is expected to remain a star performer on the Athens Stock Exchange this year, where its share price has risen steadily since the company was listed in 2001, and to reward its investors with good returns.

Its success is a pretty safe bet. OPAP holds an exclusive licence to operate all its current sports betting and lottery games, in addition to an exclusive right to operate new sports betting games, up until 2020.

Sotirios Kostakos
President of OPAP
“We have to go to the customers, we cannot wait for them to come to us”

A 42 percent share of a gaming market that is continuing to show strong growth

Nevertheless, it is important for the company to remain on its toes. “We must secure a strong and competitive position for the future,” says OPAP’s President, Sotirios Kostakos (INTERVIEW). “We have to go to the customers, we cannot wait for the customers to come to us.”

He continues, “We have exclusivity for 20 years, but nobody can say when the market will be liberalised,” adds Mr Kostakos. “There is no indication that this could be happening any time soon, but someday it may happen so we must prepare the company for international competition. This should be our priority.”

The gaming giant is one of a number of enterprises being considered for privatisation as part of the government’s drive to get public finances back into balance. The state is legally required to hold a stake of at least 51 percent in OPAP. The government is looking to sell a 10 percent stake in the company, which would require a legislative amendment.