2020 vision: Damian Cope on OPAP's online revolution

For a company with a 60-year gambling heritage in Greece, it is perhaps surprising just how small OPAP’s online offering actually is. Founded in 1958, the former monopoly is by far the biggest gaming operator on the Greek high street with approximately 4,000 points of sale and annual group revenue of €1.5bn. But thus far the carving out of a similar dominant position online has proven elusive for OPAP, with the company suffering historically from a relatively poor platform and uncompetitive pricing.

“For various reasons we’ve had our retail prices offered online and for a typical customer in Greece, who has the full range of prices available, they would really want to have to bet with OPAP,” CEO Damian Cope tells EGR. However, the former Ladbrokes and Coral exec seems confident OPAP will soon be able to go head-to-head with the likes of bet365, GVC and The Stars Group with its new Betgenius-powered sportsbook.

A key part of this strategy was unveiled in late September when OPAP announced it had agreed a deal to acquire a 36.75% stake in TCB Holdings, the parent company of rival operator Stoiximan. TCB’s Greek brand has found considerable success in the online gaming sphere, reporting €136m in revenue last year, and it would appear OPAP will now be aiming to tap into both its digital expertise and wider international reach.

Below, Cope reveals how the Greek gambling giant intends to finally fulfil its online potential, while also leveraging its enviable retail footprint to make the most of the omni-channel opportunity.

EGR Intel: Can you talk us through the stake you recently acquired in rival Greek operator Stoiximan and how that will position you for growth going forward?

Damian Cope (DC): One part of the strategy is our own online operation, initially focused on sports betting and then other products as well, and the investment in Stoiximan is a strategic investment in their organisation. There is no question that they’ve demonstrated impressive growth in recent years and they’ve proven themselves against some of the biggest online operators. For now, we are waiting for the necessary approvals from all of the regulatory and competition authorities, and in the short term the businesses will just continue to operate and be managed independently. We’ve got a dual strategy to keep our options open.

EGR Intel: You said previously that Stoiximan will enable OPAP to expand internationally. How will the deal help you to do this?

DC: It certainly gives us the minority interest in the group and the territories outside of Greece, and I think there are definitely opportunities for us there as an organisation. Stoiximan is currently in Romania, Germany and Cyprus, and is looking to secure licences in other markets too. OPAP, however, is only in Greece and Cyprus, and we recognise there is a bigger world out there and this was a nice way of getting access to those opportunities.

EGR Intel: How would you sum up OPAP’s performance in general over the last few months and what have been the company’s main strategic priorities?

DC: I joined in the summer of 2016 and we put in place a strategic plan called ‘2020 vision’, and the last few months have been about executing that. This includes a number of technology changes across our network of approximately 4,000 shops, migrating to the PBS sports betting platform for all our retail betting, introducing thousands of SSBTs and doing a lot of work to improve the fundamentals of our network. Meanwhile, in the background we’ve also been rebuilding our online sports betting platform, which we launched a few weeks ago. And finally on the financials, in H1 2018 we delivered strong GGR growth and a 20% rise in EBITDA.

EGR Intel: Does this growth mean you are already benefiting from the technology changes you’ve made or will that come later?

DC: A lot of that will come later. Our revenues have been boosted by the introduction of virtuals – although, unlike in the UK, we only have virtual football because dogs and horseracing didn’t research well. And with VLTs we also have an exclusive licence to place 25,000 cabinets and devices. Both of those two things have been the biggest revenue injections to the company over the last 12 months or so.

EGR Intel: How big is OPAP’s online business?

DC: We are probably the only listed company that doesn’t break out online; it is very, very small. Our platform hasn’t been where we wanted it to be, however we recently have moved to a new platform which is integrated into our in-house player account management platform. We will start marketing the sportsbook in full very soon and then in 2019 we are going to be adding a number of our exclusive lottery products. This is a massive opportunity for the company as we know a significant percentage of our retail sports betting customers play online, and we are convinced that with competitive pricing and a good online product they will join us online as well.

EGR Intel: Why are you so confident the new platform will help you grow the online business so significantly?

DC: If day zero was the previous platform then we are probably only still at day one. We know that the trust in our brand, even if it’s not recognised outside of Greece, is really quite remarkable and we know if we can get a good product out there we can go head-to-head with the other online operators. We are not looking to say that, for example, we’ve got 760 markets on one game just because it sounds good, what we are trying to do is be more sensible, and if 150 markets on a game is enough then that is what we will give them. But we want a product that is as competitive as it can be with the other operators on the market.

It’s also about strengthening the relationship. It’s a slightly unusual situation when we have a monopoly on the retail network and cash is still a popular way for people to pay for transactions, so we are confident the retail network is going to be here for a very long time and that the relationships with our customers is strong. So that historical relationship is important. And while we might be at day one of the journey, in time, and subject to the necessary legislation being passed, we expect to have an online gaming portal with a full range of products. Another unique thing about OPAP, especially compared to a lot of UK betting brands, is that a high percentage of our customer base is women, particularly with our lottery and numbers products. No one in the UK has really cracked that market and we think there are really good opportunities there for OPAP.

EGR Intel: How does the omni-channel opportunity compare in Greece to the UK?

DC: It sounds like you were listening in to our recent executive management session. I actually don’t think that many companies in the UK have done it well so far, but I think we can even though we are starting from a position where, like a lot of retail businesses, we have a very small database of registered customers. We do, however, have 250,000 VLT customers who must have a player card to play on the machine and we are going to get a lot more registered customers in the future. I’m confident we have both the right customer journeys and technology plans defined to succeed, and omni-channel will be a very significant part of our progress. There will be thousands of our stores going forward because, as I said previously, they are not just betting shops but part of the local communities.

EGR Intel: What does the long-term economic situation look like for Greece after what has been a torrid few years for the country?

DC: One adjective I would use is ‘fragile’. It is definitely a very challenging economic environment as Greece hasn’t seen the kind of rebound the rest of Europe has. We have seen some green shots in the last six to 12 months, but they often don’t turn into anything significant. We are patient, though. We are a significant part of the Greek economy and we have to adapt to how the economy develops, but we hope there will some improvements over the next couple of years.

EGR Intel: And what about the regulatory outlook for Greece’s gambling market?

DC: There was recently a draft piece of legislation which came out and we’ve just finished the public consultation process. It is with the government now and will then need to go through various approvals before ratification next year. However, we are hopeful that some time in 2019 there will be a new piece of legislation that will finally clarify the overall environment because at the minute it’s not helpful for OPAP or any other Greek operator.