Czech lottery and betting giant Sazka Group has acquired a majority stake in Casinos Austria as the Novomatic Group tries to extricate itself from a growing political scandal.
On Tuesday, Sazka informed investors that it had reached a deal to acquire Novomatic AG’s 17.19% stake in Casinos Austria. Sazka already had a 38% stake in Casinos Austria, so if shareholders, gaming regulators and the Austrian government – which holds 33% of Casinos Austria – have no objection, Sazka will now hold a controlling stake in the company.
Terms of the deal weren’t disclosed, but it will reduce Novomatic’s stake in Casinos Austria to nil. However, Novomatic will reportedly hang on to its 11% stake in Casinos Austria’s lottery subsidiary Österreichische Lotterien, which currently holds a local online gambling monopoly via its Win2Day brand.
Despite the sale, Novomatic will likely still be preoccupied with the Austrian firm for a while to come. In late-November, Austrian legislators began the process of probing a growing political patronage scandal that local media have dubbed the Casino Affair.
The scandal is complex, but at its core revolves around allegations that Novomatic offered its support for the appointment of Peter Sidlo, a politically connected operative, to Casinos Austria’s board.
In exchange, it’s alleged that the government would consider opening up Austria’s online gambling market to private operators, including Novomatic, while the company’s suspended land-based slots parlor licenses in Vienna might have received the opportunity to resume operations.
Last month, Sazka boss Robert Chvatal said his company had been under “a great deal of pressure” to approve Sidlo’s appointment as Casinos Austria’s new CFO despite his “clearly and undoubtedly” lack of experience in the financial field. Both Sidlo and Novomatic’s senior execs have denied any impropriety.
In the six months ending June 30, Sazka reported net gaming revenue of €625.3m, up 6.8% year-on-year, while earnings rose nearly one-quarter to €286.6m and pre-tax profit jumped 35% to €192.4m. In addition to Austria and its native Czech Republic, Sazka also has significant operations in Cyprus, Greece and Italy.
