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Opap Posts Record Decline on Greek Tax Hikes: Athens Mover

Opap SA (OPAP), Greece’s biggest gambling company, dropped the most on record after it announced the government reached agreement with the European Commission to raise the company’s taxes.

Shares dropped 18 percent to 4.31 euros in Athens, the biggest decline in Europe’s Stoxx 600 Index and Opap’s biggest decline since at least April 2001. The stock has lost 31 percent since Greece’s Kathimerini newspaper reported the EU tax talks on Sept. 14. That left Opap with a market value of 1.37 billion euros ($1.79 billion).

The Greek Finance Ministry reached agreement with the EU competition regulator on taxes on games of chance, Opap said today. Greece will receive a 30 percent royalty on gross profit from certain games through Oct. 12, 2020. If video lottery terminal revenue is greater than expected, the tax will be as high as 35 percent, from 30 percent now. Winnings from Opap games will also be taxed at a flat rate of 10 percent from Jan. 1, canceling current exemptions.

The tax hikes on consumers “will be negative for turnover since it will reduce recycling of winnings into sales,” Pantelakis Securities analyst Paris Mantzavras, wrote in an e- mailed note today. The 30 percent gross-win tax extended to Opap’s so-called “legacy” games may cut the company’s earnings per share by as much as 40 percent, he said.

Path to Privatization

Greece’s government, which is committed to raising 50 billion euros from state asset sales by 2020 to meet conditions tied to two international bailouts, has to clear EU regulation hurdles before it can move ahead with a planned sale of a 29 percent stake in Opap. The company last year extended its monopoly on sports betting in Greece to 2030.

“Greece has reached a compromise with the European Commission to settle pending regulatory issues for the domestic gaming market so as to pave the way for the privatization of a 29 percent stake in Opap,” Mantzavras said.

Piraeus Securities placed its outperform stock recommendation for Opap under review, citing the news as “negative” for both the company’s top and bottom line, according to an e-mailed note from Piraeus analyst John Arapoglou.

To contact the reporter on this story: Natalie Weeks in Athens at

To contact the editor responsible for this story: Jerrold Colten at

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