OPAP shareholders have approved the renewal of a controversial IT deal with Intralot, despite threats of legal action which could delay the Greek state’s critical sale of its stake in the monopoly.
Representatives of just 37% of OPAP’s total issued share capital participated in the vote at Saturday’s extraodinary general meeting (EGM), however 70% of these approved the Intralot resolution with 29% abstaining, sufficient to validate the contract.
Two of the seven bidders for the Greek government’s 33% stake in OPAP had ahead of the vote threatened legal action if OPAP insisted on awarding the IT services contract to Intralot, one of the other bidders for a stake currently valued at around €660m.
The vote had been delayed from 26 March to give Greek privatisation agency HRADF more time to consider the agenda after the consortium headed by Playtech and its German B2B partner Gauselmann and the Emma Delta vehicle backed by Greek shipping magnate George Melisanidis and Czech businessman Jiri Smejc wrote to OPAP and HRADF questioning the award of the contract to Intralot. Both claimed they should have been consulted on a contract set to run for five years which would see OPAP paying more than it previously claimed.
HRADF however cast a blank ballot on Saturday, stating that only OPAP’s management possessed the expertise to assess the terms of the deal, according to Reuters.
Defending the extension of an IT contract which dates back to 2001, OPAP’s chairman Constantinos Louropoulos told those present at Saturday’s EGM that the deal, which would see it pay “at least” €46m for terminals maintenance on top of €109m for services and capital expenditure, would cost 36% less than the last contract.
Potential legal action from bidders due to submit binding proposals by 17 April could provide yet another setback to the Greek government’s privatisation drive aimed at shoring up its ailing economy. OPAP is seen as one of the crown jewels in the Greek government’s fire sale of €2.6bn of assets this year to secure the disbursement of further IMF bailout funds.
Shares in OPAP fell 18% in a single afternoon last September after the Greek state announced OPAP would head off potential State Aid action from the EC by paying 30% tax on gross revenue and 10% on winnings on all its operations from 2013, projected to wipe up to €280m off annual profits.
Further, in January 2013 , OPAP’s monopoly was ruled to be illegal as currently operated by Europe’s highest court, the CJEU, following cases brought by William Hill, Sportingbet and Stanleybet.
But this did not prevent the Greek government recently notifying the EC of proposals to extend OPAP’s land-based betting and gaming monopoly online, restricting private operator licence applications to non-RNG online games such as live casino and tournament poker until 2020. Accompanying enforcement measures to block operators from the market have also been challenged by the EC and Malta.
OPAP’s existing monopoly in Greece includes offline sports betting until 2020, the exclusive right to operate 35,000 video lottery terminals for 10 years, and the Greek lottery until 2030.
Article written by Katy Stirland
