Greek online gambling: who will regulate the regulator?

Back in January this year the Greek government announced its intentions to introduce new online gambling regulations and offer between 15 and 50 operating licenses.

The initial draft laws are unlikely to be enacted any time soon, withdrawn for a secondary parliamentary review even before the European Commission had a chance to rule on their suitability from an EU standpoint.

But at some stage, and in some form, online gambling regulations will be put in place by the Greek government.  After all, they have nearly a trillion Euro in debt and pension obligations to try and pay off – almost a quarter million Euros for every working Greek adult.

Beware of Greeks Bearing Bonds

This is the title of a great article written for Vanity Fair by Michael Lewis, and it provides both a humorous and disturbing (if that’s possible) insight into a culture of tax evasion, graft, corruption and total lack of accountability (and accounting!) that have lead Greece to brink of bankruptcy.

It also describes the property deals between the Vatopaidi monastry and the Kostas Karamanlis government that eventually snowballed into a scandal big enough to unseat that government and bring Papandreou to power.  The article’s worth reading just to learn how a couple of the savviest monks you’re ever likely to come across turned some worthless old deeds into a property empire estimated to be worth anywhere from €1 to 2 billion.

It was only when the new government came to power back in October 2010 and finance minister George Papaconstantino had a closer look at the books that very large black holes in the previous government’s budgets were discovered.

How large?  Greece’s 2009 budget deficit had been calculated at 3.7% of GDP by the government of the time.  A subsequent review by the new government, using actual rather than just budgeted expenditure (duh!)  found the figure was closer to 14%!  Pythagoras must be rolling in his grave.

And where had all the money gone?  Here’s a clue…in Greece the average public sector wage is three times the average private sector wage.  The average state railroad employee earns 65,000 euros a year.  To make matters worse, it seems tax evasion is one of the country’s national past times so while cash was going out the treasury door at a rate of knots, not so much was coming in.  And all of it was hidden behind rubbery ‘official’ numbers fudged to keep Greece in the good graces of the European Union.

Lewis’ succinctly describes the root of the mess,

“...tax collectors on the take, public school teachers who don’t really teach, well paid employees of bankrupt state railroads whose trains never run on time, state hostpital workers bribed to buy overpriced supplies.  Here they are, and here we are: a nation of people looking for anyone to blame but themselves.”

Regulating the regulator

The new Greek gambling regulator will of course be a public office so in view of the above, and returning to our original question, will it need some form or regulatory oversight?  Not an unreasonable question I wouldn’t think. Particularly if any online betting licenses are ever issued to the Vatopaidi monastry.