Kamil Ziegler: Without a new Regulation, the VLTs project cannot start

OPAP President and CEO Kamil Ziegler made the assessment today that there is significant scope for a mutually satisfactory solution for all sides to the VLTs project issue, while making clear that if there is no common ground for a “reasonable and balanced” Regulation governing VLTs, the investment will not be viable under the existing circumstances and will therefore not proceed.

Speaking to analysts during a teleconference which followed the announcement of financial results for the six month period, Mr. Ziegler denounced the amendment of the VLTs Regulation just a few days before their launch, saying that all the provisions adopted by the Hellenic Gaming Commission (HGC) practically made OPAP’s investment non-viable financially and impossible to implement, leading the company to its suspension.

“We remain absolutely committed to our investment and will continue to take all necessary steps to create a rational and balanced regulatory framework. Lately we have expressed our position to the authorities and expect as soon as possible a solution that will safeguard the public interest while allowing for the economic viability of VLTs business, leading to anticipated benefits and revenue for the State” OPAP President and CEO said, adding that with the existing Regulation the project is not viable and can not implemented.

“We have made it clear that the new technical requirements were set by the HGC unilaterally as there was not even a formal consultation with the company; they set restrictions and make the project non sustainable. With these terms the project cannot be implemented. We are committed to the investment, we await a solution that will please all sides but with the current framework we cannot proceed”, Mr. Ziegler said.

The project can not remain in waiting forever, there is a limited time in which investment may be resumed, he noted, saying that at the moment there are 9000 gaming machines that have either been installed or are in the warehouses of OPAP and for which there are agreements with suppliers which, if not met, there is a risk that these VLTs will be claimed back by their manufacturers.

Responding to a relevant question, the OPAP President said that if no solution is found, there should be no doubt that OPAP will move by all means to safeguard the interests of the company and its shareholders, leaving open the possibility of recourse to arbitration court, in Greece or abroad. “As we have pointed out in the past, as the management of OPAP we are obliged to exercise any right conferred by law and the contract in order to defend the company’s interests both in Greece and abroad. ”

Mr. Ziegler also pointed out that the unprecedented restrictions set by the new Regulation of the HGC lead to the opposite effect than expected, keeping players in illegal gambling. “This also means that players remain exposed to all the dangers of illegal activity and the state loses considerable revenue. This conclusion of ours is confirmed by our providers, which are successful international companies in the field of gaming with operations in many countries and under different regulatory frameworks. These are leading companies in the area of responsible gaming”.

“It is in everyone’s interest to implement this investment. The state will only benefit from the fight against illegal gaming. The sooner we start the sooner new public revenue will come. We consider that a solution will be found. However, we will not wait forever,” he said characteristically.

Regarding the course of the financial results for the second quarter of 2015, Mr. Ziegler said that the company’s sales have been on the rise for the eighth consecutive quarter and net income before taxes increased by 15.1% yoy.

However, as noted, the difficult economic environment expected for 2015 will affect all sectors of the economy including the gaming industry, as there are too many challenges.

As regards the impact of the imposition of capital controls on the group, the head of OPAP said that OPAP adapted quickly to the new situation and the smooth functioning of transactions was a priority for all concerned parties, agents, players and employees. He noted, however, that the capital controls caused irregularity to the behaviour of players, the amounts spent on gaming and on the turnover of games (with instant sweepstakes affected more).

Already, however, the situation is normalized, and the trend is towards restoration to amounts seen before the imposition of capital controls. “After the turbulence of July, according to the latest figures, the trend is positive and amounts spent by players are recovering significantly,” he said.