UPDATE 1-Greece's OPAP to launch video lottery terminals end Q1

(Adds CEO comments)

ATHENS, Nov 23 (Reuters) - Greece-based OPAP, Europe’s fourth-biggest betting firm, will launch video lottery terminals (VLTs) from the end of the first quarter next year, it said on Wednesday.

OPAP’s profitability has been sapped in recent years by an austerity tax Greece imposed on its revenue to bolster state finances under the terms of international bailouts.

OPAP had planned to launch the machines last year but halted the project after Greece unexpectedly introduced tougher betting rules. The company unfroze the project this month after Greece’s gaming commission approved new, less rigid regulations.

Analysts see the new business as a catalyst for the company’s future growth.

OPAP will roll out some 16,500 machines in the next 18 months at existing and newly set-up outlets, Chief Executive Officer Damian Cope said in a call to analysts.

“The overall deployment of legally licenced VLTs is a brand new development for both OPAP and the Greek market, so we will be analysing our performance carefully as we go along,” he said.

OPAP has taken a case against the Greek state to the London Court of International Arbitration, claiming damages of more than 1 billion euros as a result of the frozen plan.

Cope said that after recent developments, OPAP will significantly reduce the size of its legal claims against the state.

OPAP has paid some 560 million euros to the Greek state to launch the VLTs and subcontract another 18,500 machines. Cope said it was now preparing a tender process for the additional VLTs. (Reporting by Angeliki Koutantou; Editing by Ruth Pitchford)