Betfair Pulls Out Of Greek Market

By now you must have already heard the news of Betfair (BET.L) pulling out of Greece as a result of the Greek legislation and regulations for online gambling. The Greek Gaming Commission has set 5th of December as the deadline for unlicensed gambling operators to withdraw from Greece and yesterday Betfair prompted their customers residing in Greece to trade out their holding positions prior to 3 December.

Greek players accessing their accounts from abroad won’t be affected though, since Betfair will still provide access to their accounts via non-Greek IPs. Given the impact of the recent news to the Greek gambling community, one would expect a significant movement in the Greek gambling operator’s stock, OPAP (OPAP.AT), who also has the sports betting monopoly in Greece. Yet, OPAP stock price seems unaffected in the Athens stock exchange.

Meanwhile, Betfair stock, one of the 5 gambling stocks in London stock exchange we talked a week ago, is gaining about 1%, despite the hit as Betfair had expected to generate approximately £13 million of revenue from Greece in the current fiscal year.

So, does that mean Betfair’s pulling out of Greece was already priced in the stocks prices? Betfair stock has seemingly succeeded in breaching the resistance level at £760 and the news didn’t actually cause any damage to the recent uptrend! Question is whether OPAP stock will follow up and climb once again to double-digit prices. Maybe the sale of 33% stake of the Greek gambling operator will make OPAP stock more active in the Greek stock market during the coming weeks.

OPAP has recently announced the Q3 2012 earnings report that showed a decline in revenues, EBITDA and net profit compared to 2011 financial results.

Revenue coming from sports betting games suffered more damage than lotteries and “numerical” games!

The proposed 10% tax on gambling winnings is also expected to have a negative effect in next earnings reports of OPAP, as turnover is predicted to decrease significantly.

Disclaimer: I have no positions in any stocks mentioned and no plans to initiate any positions within the next 72 hours.