Tax hike and monopoly doubts hinder OPAP sale

The Greek government’s sell-off plans for OPAP were dealt a blow yesterday when a key legal advisor to Europe’s highest court said the gaming monopoly operated contrary to EU law.

Advocate General Mazák said gambling monopolies were only legal in the EU if they were set up to limit gambling and gambling-related crime in the public interest, whereas: “OPAP seems to pursue an expansionist commercial policy and…an increase in the supply of games of chance…Those circumstances…are in my view manifestly inconsistent with the purported objective of reducing the betting and gaming opportunities in Greece.”

Mazák added that it was clear OPAP’s activities “are neither subject to strict control by the public authorities nor effectively limited by the legislative framework applicable to it.”

Maarten Haijer, director for regulatory affairs at lobby group the European Gaming and Betting Association, issued a statement on behalf of its members welcoming AG Mazák’s opinion: “Greece must use this opportunity to regulate its online gambling market on a competitive and EU compliant basis, not just to provide customers a safe legal offer, but also to secure much needed tax revenues.”

Mazák was delivering his opinion on joined cases brought to the Court of Justice of the European Union (CJEU) by William Hill, Sportingbet and Stanleybet against Greece after they were denied the opportunity to apply for online gambling licences in the EU Member State. The case was lodged prior to the passage of last August’s law providing for the issue of an unlimited number of five-year licences.

Greece’s privatisation agency HRADF begun international tender proceedings on Wednesday for its 29% of its 34% stake in OPAP. While the AG’s opinion is not binding, its questioning of OPAP”s government-granted right to control all betting and gaming in the EU Member State could affect the value realised by the indebted Greek government from OPAP, a prized asset in its privatisation drive aimed at raising €19bn by 2015 to ward off international creditors.

The AG’s opinion also follows just a day after OPAP shares plunged more than 18% upon news the Greek finance ministry had agreed with the EC that OPAP would pay a 30% tax on all gross revenues from its land-based sports betting, slot machine and lottery operations, to bring this into line with that paid by OPAP and other online operators on online games since last August, when its online gambling law was passed.

In combination with the additional flat 10% tax on winnings confirmed earlier in the day, analyst Dimitris Birbos from the Investment Bank of Greece told Reuters this could wipe as much as €280m off OPAP’s profits next year, a figure equivalent to more 50% of its total profit in 2011, which amounted to €537.5m.

The agreement with the EC to harmonise taxes across OPAP’s offline and online businesses followed a complaint by industry lobby group the Remote Gambling Association on behalf of its members that OPAP’s exemption from the tax on its land-based operations represented an unfair form of State Aid. The RGA’s membership includes all of Europe’s leading online operators, such as 888, Betfair, bwin.party, Ladbrokes, Paddy Power, Sportingbet and William Hill.

Article written by Stephen Carter


Casino Choice journalist

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