G3 Interview NOVOMATIC GROUP OF COMPANIES
and every first page result will return a story linking the company to Casinos Austria. The probability that Novomatic will own a controlling stake in Austria’s domestic casino operator by the time this article is published is extremely high. The fact that this is a story that dominates current conversation is unsurprising. Novomatic has been at loggerheads with the Austrian government about the casino monopoly controlled by Casinos Austria in the domestic market for the best part of four decades. The fact that Novomatic must now answer to a cartel investigation body concerning its acquisition of Casinos Austria shareholding is tinged with more than a little irony.
As we head to print, Novomatic owns 24 per cent of OLG, the Austrian Lottery, and almost 40 per cent of Casino Austria. Barring any last minute interventions, Novomatic will bring its skills and international land- based operations know-how to support Casinos Austria in the very near future. “The European market has changed fundamentally in recent years, while Casinos Austria has existed in a protected environment,” states Mr. Neumann. “Our task over the long-term is to stabilise the business and bring the synergies of the Group and global expertise of Novomatic to bear on the Casinos Austria business, especially in the lotteries sector. We see great opportunities for the Austrian Lottery business, which has a great international image.
“Our understanding of VLT products and markets will ensure that Austrian Lotteries can compete at the global level. To date, in their WinWin operations they have rolled out only some 700 VLTs within locations in Austria, despite having a 5,000 machine licence,” continues Mr. Neumann. “Novomatic has the experience, expertise and crucially the locations to maximise that opportunity.”
CONTINUED INTERNATIONAL GROWTH
Novomatic’s former brand statement, that it ‘leads while others follow’, prompted an interesting question at the G2E show. The company’s long-term view of market growth and expansion in the US has, to date, been slow and steady. While the fast and the furious have built growth based on debt, Novomatic’s long-term approach has been more tortoise and the hare. Winning the race in the US is about patience and market expertise, and we’re about to see big changes in Novomatic’s growth strategy for the US market.
In the last 12 months Novomatic has formed a new US team, moved its headquarters to Illinois, (where coincidentally there are currently lots of skilled gaming people looking for employment in the Chicago area), and is building a support network across the US with a focus on distribution and licence acquisition.
“If you look at the machines in
casinos that remain on the floor year after year, nearly half of
them are stepper games. The loyal casino players are conservative by nature and
developing the right products for this market will not happen overnight.”
“In the US, you can either copy others, improve upon the copies of others or you can introduce your own concepts,” states Mr. Graf. “Our belief is that for the locals market in the US, you don’t need bells and whistles, you need the right formula. If you look at the machines in casinos that remain on the floor year after year, nearly half of them are stepper games. The loyal casino players are conservative by nature and developing the right products for this market will not happen overnight.”
But what is a certainty with Novomatic, is that it will happen.
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