Greek Financial Crisis May Impact IGT
Posted on: July 8, 2015, 03:18h.
Last updated on: July 8, 2015, 03:18h.
Greece’s ongoing financial crisis and standoff with European leaders could have repercussions that impact the global economy.
That impact extends even to the gaming industry, as Greece’s attempts to avoid defaulting further on its debts may prove costly to companies like International Game Technology (IGT) and Scientific Games.
Those manufacturers were hoping to provide video lottery terminals throughout Greece, with the games just days away from a planned launch. However, the Hellenic Gaming Commission announced new lottery regulations in the wake of the country’s financial crisis, leaving much uncertainty as to the short-term future of the industry.
New Regulations Limit Play, Jackpot Size
Under the new regulations, daily loss limits were to be added to the machines, and gamblers would be limited as to how much time they would be allowed to play on a machine each day. Jackpot levels would also be lower under the new regulations.
That didn’t sit well with OPAP, the Greek firm that operates the video lottery terminal network. In a statement, the company said that the new regulation would make operating the terminals “no longer viable,” and immediately stopped the deployment of 16,500 machines throughout the country.
Looking at the situation realistically, the timing of the new regulations and OPAP’s decision may just be coincidental, and it’s hard to see how it would be directly related to the battle over Greek debt. But that doesn’t mean that the ongoing crisis won’t be a factor in how the lottery terminal battle is resolved.
“The delay doesn’t have anything to do with the current debt crises other than maybe OPAP playing hardball with the regulators hoping that they will cave because they need the new tax revenue,” said Todd Eilers of Eilers Research.
IGT, Scientific Games Could Lose Revenue
If this is simply a negotiating tactic on the part of OPAP, it could be an expensive one for slot machine manufacturers like IGT and Scientific Games. Both of those companies were producing terminals for the Geek market, and the delays could potentially cost those two firms millions in revenue.
IGT was awarded a vendor contract to provide 5,500 lottery machines, while Scientific Games was slated to make 5,000 machines for the market. Two European manufacturers, Inspired Gaming and Synot, were also awarded first-phase vendor contracts.
IGT was expected to make up to $30 million in annual revenues from the machines provided to Greece, while Scientific Games could bring in as much as $27 million.
The delays and the financial crisis have certainly brought some uncertainty to the Greek video lottery terminal market, but Eilers says that in the long term, Greece should still be a profitable market for manufacturers.
“We still believe the VLT market will move forward and represents a sizable growth opportunity for vendors,” he said.
The negotiations over the future of Greece’s lottery terminals comes at a time when much larger battles are being waged over the nation’s financial future.
Greeks voted “no” on the strict lending terms offered by international creditors on Sunday, with over 61 percent of voters coming out against the terms.
But that vote doesn’t mean that Greece isn’t willing to negotiate. Prime Minister Alexis Tsipras says that the Greek government is still willing to make some changes in order to receive assistance from Europe, and requested a three-year loan from the eurozone’s bailout fund on Wednesday.
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