The changing market situation has caused a strategy rethink at Estonia-based Olympic Entertainment Group. On July 9th OEG initiated the liquidation process of subsidiaries Olympic Casino Ukraine TOV, Ukraine Leisure Company and Eldorado Leisure Company due to the suspension of Ukrainian gaming activities under the law issued by the Ukrainian parliament on May 15th and entered in force on June 25th. In August OEG’s Ukrainian subsidiaries submitted a bankruptcy petition and the company is planning to demand compensation from the government. The law cancelled all licenses issued to casino operators and terminated all casino activities in Ukraine for an unknown time period.

OEG closed its 24 Ukraine operations, making a total of 49 casinos closed during the first half of 2009. Within the first half of 2009 gaming market volumes contracted in total by 56% in Estonia, 40% in Latvia and 38% in Lithuania in comparison with the same period last year. The company has announced a further 18 casinos will close – 4 in Estonia, 5 in Latvia, 4 in Lithuania, 4 in Romania and 1 in Poland. Another 50 OEG casinos will remain operating.

Expenses connected with casino closings in the 3rd quarter of 2009 have amounted to a total of €2.6 million and OEG personnel numbers decreased by 228. At the end of September the Group was employing 2,461 people. The decrease in workload connected with the restructuring and optimisation programme has caused a 22% decline in the salary fund of Group support units from September in comparison with June 2009. The expected effect of third quarter optimisations on operating expenses within the fourth quarter 2009 is €3.4 million and within the year of 2010 is €13.3 million euros.

At the end of August OEG announced it would be entering the online gaming market in partnership with Playtech and would open its first online casino early in 2010, starting by offering online gaming in the markets where it operates. According to the company, its main competitive advantages are extensive experience as a casino operator, in-depth know-how of its markets and the possibility of creating synergy between the company's regular casinos and online casinos. From 1 January 2010 online gambling in Estonia will be clearly regulated. (E-10.15.09)

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