Greece has now hiked its taxes on gambling activities inside the Southern European country as it attempts to meet government debt-cutting efforts, as well as address unfair advantage concerns about the state-owned betting firm OPAP.
Europe’s largest betting firm OPAP manages lottery and sports betting games in Greece and made a profit of €575.8 million in 2010. However, after international rivals complained to the European Commission about OPAP’s tax-free allowance, Greece has agreed to raise the company’s tax rate to between 30 and 35 percent on gross profits, while also levying a 10% tax on gamblers’ winnings. Presently, only winnings above €100 are subject to a 10% tax rate.
Greece’s government has been forced to review its tax rates as it seeks to raise €50 billion by 2020 in order to meet the conditions set by the European Union and the International Monetary Fund as part of ts international bailouts. Part of the agreement involves the sale of state asset, with dozen of firms earmarked for privatization, which is expected to generate €19 billion ($24.7 billion) for the Greek state by 2015.
However, before the Greek government is able to sell a planned 29% stake in OPAP it must first adhere to EU regulation requirements. Once the news of the gambling tax hike was announced, OPAP share prices tumbled by 18% as investors estimated company profits would be cut in half. As Investment Bank of Greece analyst Dimitris Birbos, explains:
“The percentage is very high. Overall, the agreement is negative on OPAP’s shareholders. 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.”
Nevertheless, the proposed sale of 29% in OPAP is expected to be completed by the end of this year with the tender process soon to be opened before running for 45 days.
