OPAP shares drop on back of new tax levy

Greek State-run betting agency OPAP’s shares dropped on the news of an agreement between the European Commission and the Greek Finance Ministry today .

In a new agreement, set to be implemented from January 1, 2013, OPAP will apply a flat gaming tax on player winnings of 10 percent across the online and terrestrial sectors and will be subject to a 30 percent tax on gross earnings reports Reuters.

Greek Government officials said taxes had to be brought in line with European competitors prior to the expected privatisation of the Greek gambling monopoly and follows complaints from industry rivals on Greece’s current tax regime which was seen to favour OPAP.

The gross earnings percentage levied at OPAP took the industry by surprise with analysts noting the 30 percent as “very high” compared to other European countries who pay anything between 15 and 25 percent. The new 30 percent levy is over and above the existing corporate tax rate of around 21 percent.

Currently player winnings above Euro 100 are taxed at a rate of 10 percent, however, the amendments will see players paying from the first Euro commented an OPAP spokesperson.

“Overall, the agreement is negative on OPAP’s shareholders,” said Dimitris Birbos, an analyst at the Investment Bank of Greece. “As things stand, I think it would be better for the state not to go ahead with its sale, as its valuation is going down.”

Birbos estimates that the new levy would strip around Euro 280 million from OPAP’s 2013 net profit.