Gambling is a part of social life across the globe, but an even more prevalent part of life in Greece. This “gambling” mentality, or speculation has led to short-term, “get rich quick” thinking as opposed to a focus on long-term investing through stocks, bonds and other investments.
Gross Gaming Revenues (GGR) is a key metric used within the gambling industry measuring revenue generated from bets. If looked at as a percentage of its size (GDP), this illustrates that Greeks are among some of the most aggressive gamblers in Europe.
Greek Households Are Under-Invested
There is a dichotomy in the country, in that while Greeks are aggressive gamblers, they are very under-allocated in when it comes to investments.
According to the European Fund and Asset Management Association (EFAMA), Greek households have the lowest percentage of their assets held in stocks, bonds, funds, or other any type of investment. Countries with lower income levels generally tend to hold a higher proportion of their financial assets in bank deposits and less in investments.
Notice the inverse relationship between countries with strong gambling habits and percentage of assets held in investment vehicles.
Gambling habits are not the only driver of the low investment rates. In a previous post, “Greece Has An Investing Problem” we examined others, ranging from capital market mistrust, poor returns, and options lacking for market access.
The House Always Wins
In the long-term, gambling and speculating is a losing proposition, unlikely to yield any positive results. On the other hand, investing, through stocks, bonds, and other securities is all about the long-term, focusing on the gradual accumulation and compounding of returns over time.
There is an ironic silver lining, the gambling habits of the Greek population has yielded great results for OPAP (Greek Organization of Football Prognostics), the exclusive gambling operator in the country. Investing in the stock of OPAP has been a better investment than even the S&P 500 over the last ten years.
OPAP has over 3,400 physical locations throughout Greece, and with the advent of online gaming, people may find it even easier and become more inclined to gamble. This report studied internet usage trends in Greece, finding that 94% of those surveyed have never used the internet to make an investment. As Greece leaps forward into the digital age, it is both essential and opportune to instill investing habits, rather than the gambling ones into this digital audience.
This Could Be a Good Thing
Hear me out on this one. Speculation will always exist, not only in the gambling context but also exists in the stock market (Meme stocks, crypto, day trading). Market participation is very low in Greece, but given the high gambling interest, why not try and channel this energy towards stocks.
This has the potential to solve several problems 1) Increase liquidity, which is lacking, on the Athens Stock Exchange 2) Build popularity and awareness, making investing more “mainstream” and 3) exploit anomalies and market imperfections.
Left Or Right?
The office headquarters of OPAP are ironically enough, located right next the Athens Stock Exchange, which all but perfectly sums up the issue at hand. Fully realizing that investment options and returns in Greece have not been stellar in the past, the country is at a key inflection point on many levels.
Through education, innovation, and growth, the future in Greece is hopefully of full of more investing, and less speculating.
This is fascinating. Obviously you see OPAPs everywhere, but I partly just attributed that to the monopoly. That GGR/GDP stat is mind-blowing.
great piece, thank you!