Austerity hits gambling at OPAP

Greeks have been gambling less after being hit with wage cuts and tax hikes by a debt-laden government trying to avoid default. OPAP's third-quarter net profit fell 16 percent to 135.4 million euros (us$ 183 million), compared with a forecast for 130.5 million in a Reuters poll.

"What they say about poverty boosting gambling is a myth," said Kyriakos Toptsidis, head of OPAP's sales agents and who has been operating his own outlet in northern Greece for 27 years.

"When people do not have enough to eat, they do not buy lottery tickets. They may not stop altogether, but they cut down," he said.

OPAP, 34 percent state-owned and slated for a government share sale next year, has been coping with recession better than the broader Greek economy.

Retail sales, adjusted for inflation, have dropped about 25 percent from their peak in 2008, when Greece entered recession, while OPAP sales are down about 20 percent.

OPAP's third-quarter sales fell 11.4 percent to 1.01 billion euros, as people turned away from its two flagship games -- Kino and Stihima, which account for about 85 percent of total revenues.

"Our sales drop is certainly lower than other retail sectors, like electronics and clothing," said one OPAP official who declined to be named. "But actual revenue growth is impossible in such tough times."

Turnover from sports betting game Stihima fell 20.3 percent to 346 million euros, while the popular Kino lottery dropped 14.4 percent to 516 million.

OPAP has been trying to attract punters by offering new games. In spring, it launched a string of new gambling products, such greyhound racing, which improved its top line by 51 million euros in the quarter.

"People are still coming to gamble, but they are placing one or two-euro bets instead of five or 10 as they did before," Toptsidis said.

OPAP, which has a market value of about 2 billion euros, did not announce an interim dividend, for the first time since listing in 2000.

Last month the company said it would cut its dividend payout to at least 50 percent of total profit this year, compared with a usual payout of about 90 percent.

This comes after the government's decision to use OPAP as a cash cow to boost state coffers. The company spent about 475 million euros this month to acquire an exclusive videolotto licence in Greece and will pay another 375 million by end-December to renew its betting monopoly for 10 years to 2030.

"I do not see any profit growth before VLTs are fully rolled out in 2013," said Stamatis Draziotis, an analyst at EFG Eurobank Equities. OPAP expects videolotto to become its single biggest profit driver by 2015.