Greece Gives Up Black PeriodBy: Shirley Spicer, Tuesday March 22nd 2011
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The government in Greece has been struggling to get the correct balance in its online gambling bill. It has to match the requirements of the European Commission, the expectations of the online gambling operators, its own financial needs and political compulsions. Earlier this month the government gave a major concession when it announced that it was giving up the tax on turnover and would be taxing profits as desired by the online gambling industry.
Now it has made another major concession by removing the provision for a 'black period' from the latest draft of it online gambling bill currently before parliament. The black period refers to the interim period between when the law is enacted and when the licenses are issued. In the original proposal all license applicants would have to cease offering online gambling services in Greece during the black period. Otherwise they would be disqualified and would also face penal action. This black period provision was opposed by many online gambling operators with a significant stake in the Greek market. The financial requirements have also been reduced from €500,000 to €400,000. However, the government has as yet retained some of the other controversial provisions. These include the requirement of a Greek corporate presence, player ID cards and servers to be located within Greece.
There has already been significant delay in getting the laws passed and the regulatory framework in place. And the delays are causing financial damage to the Greek economy. If the proposed online gambling law is too draconian it could meet with objections from the European Commission and lead to law suits within the country. This would create further delay, which the Greek government wants to avoid. Hence it is willing to walk the extra mile.
One of the harmful effects of the delay concerns the declining financial performance of the Greek gambling monopoly OPAP. In 2010 the revenues have fallen 5.5% and the net profits have fallen 3.5% when compared to 2009. This means a reduced income for the cash strapped government. OPAP Chief Executive Ioannis Spanoudakis indicated that the performance would improve when the reform and regulation of the Greek gaming market takes place and OPAP expands its product range and enhances its distribution channels.
The delay in enacting the online gambling law is also delaying the start of revenue collections from legalized operations. The draft law submitted by the Greek Finance Ministry had provided for cash inflow to the government of about €700 million in 2011. Of this new licenses for online casinos, poker rooms and other forms of gambling in a regulated Greek market have been estimated to provide €500 million while revenues from gambling levies have been predicted at €200 million.
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