Analysis - A Greek tragedy
With Greece in the process of forcing through a series of austerity measures as it attempts to avoid bankruptcy and a forced Euro exit, Robin Harrison asks how the country's soon-to-regulate online gambling market could be affected by the turmoil.
A series of country-wide strikes brought Greece to a standstill last year, most notably on 1 December, as the population demonstrated against a series of austerity measures including tax hikes, spending cuts and job losses brought in by a national unity government desperately trying to prevent the country from going bust.
However, with the regime only in place to pass the measures in preparation for this year’s budget and a general election to be held on 19 February, the Greek market remains volatile and subject to sweeping changes, suggesting testing times lie ahead for egaming operators.
The worst case scenario remains the threat of Greece being forced out of the eurozone. The EU last year agreed to give it around 130bn and write off 50% of privately held debts in return for austerity measures being passed, but violent protests have shown that the Greek people are unwilling to accept these terms.
Should the government fail to implement the austerity measures, it may then be forced to either withdraw, or be expelled from the euro on a temporary or perhaps even on a permanent basis.
Assuming Greece returns to the Drachma, this would result in massive inflation and give consumers much less spending power, directly impacting egaming operators’ regional revenues, as well as severely reducing the value of their Greek businesses.
However, Jim Wilkinson, CFO at Sportingbet, says the majority of operators including his firm would be able to shrug off such economic shocks: “If Greece left the euro we would certainly stay operating in the market. We do not think there will be any issue with moving or converting Drachma into any other currency, and we already convert the local currency into sterling for around 90% of the countries we operate in.
“Should Greece pull out of the eurozone, aside from lower revenues from the region, operators will be largely unaffected on an operational level,” he says.
What remains unclear, however, is the impact a withdrawal from the eurozone would have on Greek egaming legislation.
The political landscape looks set to remain uncertain until at least February next year, as it is unlikely that there will be any movement on regulation until then. Indeed, with the government looking to cut 14.32bn of public spending and raise 14.09bn in taxes over the next five years, it is equally unlikely that the national unity government put in power to create the framework will have completed its task in a few weeks’ time.
The full version of this article appears in the upcoming print version of eGaming Review. To subscribe, click here.