Late last week, Novomatic announced that Austria’s Federal Competition Authority (BWB) had objected to Novomatic teaming with the Czech investors behind betting operator Sazka to acquire a controlling stake in Casinos Austria and its Austrian Lotteries subsidiary.
Novomatic CEO Harald Neumann said that despite months of negotiations, the BWB had “adopted a viewpoint that has precluded any solution that would be economically feasible for Novomatic.”
Neumann said the BWB had proposed a number of conditions for approving the deal, including selling off some of Novomatic’s 18 casinos in the Czech Republic, while also imposing restrictions on Casinos Austria’s video lottery terminals business.
Neumann said his company found the BWB’s logic “incomprehensible” and had “fought for a solution that would have been viable for everyone” but eventually concluded that Novomatic “could not accept the requirements demanded of us.”
Novomatic says it plans to “strategically reevaluate this situations regarding future investments in Austria” and reserves the right to appeal the BWB’s decision.
Novomatic’s disappointment came on the heels of a record performance in H1 2016, during which the company reported overall turnover rising 10.8% to €1.09b, while earnings were flat at €287m. The company credited a strong performance in its gaming machine business, which improved 11.8% year-on-year.
Not to be outdone, Casinos Austria reported H1 earnings of €18.9m on revenue of €65.1m. Profits in the six months ending June 30 totaled €2.8m, a dramatic turnaround from a €573k loss in H1 2015 and the first black ink the company has enjoyed since 2009.