Investing in OPAP Is Like Betting on the House

Matt Pauls profile picture
Matt Pauls

Co-authored by Matt Pauls & Alex Tabatabai

A really good business acquired for too high a price almost always turns out to be a really bad investment in much the same way as a bad business may turn out to be a really good investment if the price paid is too low. It would appear obvious then, that the best sort of investment would be a good business acquired for too low a price. OPAP SA (OTCPK:GOFPY) may be such an investment.

OPAP Background

OPAP S.A. (The Greek Organization of Football Prognostics) operates the lottery and sports betting games of Greece and the Republic of Cyprus (a/k/a Greek Cypriot). The company was founded as a state-owned company in 1958. It was reorganized in 2000 and also granted a 20-year license as the sole operator of lottery and sports betting games in Greece. It went public on the Athens Stock Exchange in 2001. The Greek government owns an approximate 34% stake in the company.

As of 2007, OPAP controlled about 50% of the overall gaming market in Greece (the remaining 50% attributable to illegal gaming). OPAP has a right of first refusal on any new games offered or legalized by the Greek government until 2020. Its most popular games are Stihima and Kino. Stihima is a very popular sports betting game. Kino is a game with tickets bearing numbers in squares, usually from 1 to 80, in which the player circles selected numbers, and the winning numbers are drawn randomly.

OPAP is the largest gaming company in Europe and the exclusive gaming operator for legal gaming in Greece. Being a Greek company, OPAP’s share price on the Athens Exchange has been adversely affected due to the recent financial crisis.

Current Greek Financial Crisis

On May 9, 2010, Europe’s Finance Ministers approved a comprehensive

This article was written by

Matt Pauls profile picture
Matt Pauls is Portfolio Manager to Arcstone Capital, LLC. (Hunt Valley, Maryland). Mr. Pauls’ investment background is deeply rooted in, though not limited to, the methods of Benjamin Graham, Warren Buffett, Charles Munger, and John Maynard Keynes.

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