Greek lottery and sportsbetting games operator OPAP has released its interim financial results for the first three months of 2016 showing a 26.3% drop year-on-year in net profit due in large part to increased taxation.

Greece implemented a 35% retroactive gross gaming revenues tax from January and this resulted in OPAP recording a net profit for the three months to the end of March of $47.7 million although this would have fallen only 9% year-on-year to $58.8 million if the rate had remained unchanged.

OPAP reported that its first-quarter net gaming revenues dropped by 11.5% year-on-year to $155.6 million while the firm’s earnings before interest, tax, depreciation and amortization were 15.4% lower at $87.8 million thanks to a margin that was 3.1% lower at 23.1%.

Further bad news came in terms of expenses with OPAP revealing a 29.8% rise year-on-year to $14.9 million for the three-month period due to increases in wagers, salaries and retirement indemnities alongside termination compensation.

“As evident in official figures, [the first quarter of] 2016 was marked by persisting pressure on disposable income and private consumption, thus leading our games’ portfolio revenues to trend towards lower numbers on a year-on-year level,” said Kamil Ziegler, Chairman and Chief Executive Officer for Athens-based OPAP. “In addition, increased gross gaming revenues contribution of 35% carried a severe impact on our reported numbers despite our ongoing efforts related to cost optimization, which would otherwise lead to stable operating profitability versus the same period last year. Having paid almost €2 billion ($2.23 billion) in taxation in the last three years and with our tax base growing even further, we stay fully focused on our long-term plan that will benefit the Greek economy and society as a whole.”