Novomatic Puts IPO on Ice as Looming German Regulations Generate Market Uncertainty
Posted on: September 27, 2017, 03:00h.
Last updated on: September 27, 2017, 02:37h.
Austrian gambling giant Novomatic has shelved its highly anticipated initial public offering, due to market uncertainty caused by new restrictive gaming regulations in Germany.
![Johann Graf, owner of Novomatic](https://www.casino.org/news/wp-content/uploads/2017/09/Johann-Graf1.jpg)
The floatation on the Frankfurt stock exchange was expected to happen this week, but instead the slots operator and casino supplier announced it was would not be listed this year at all. The IPO was expected to value the company at €5 billion ($4 billion).
Novamatic is the biggest operator of gambling arcades and halls in Germany, with a 53 percent market share through its Admiral brand, as well as through the acquisition of the Casino Royal chain of slots halls in April.
Loopholes Plugged
But the new German regulations are expected to dent revenues. They state that arcades may only apply for one license per venue to hold a maximum of 12 slot machines. Officially, 12 had also been the maximum amount of machines permitted, but operators have swerved the rules by obtaining multiple licenses and hosting several “separate” arcades in different rooms in the same building, each with its own entrance,
This loophole will be slammed shut. Once the rules some into force, arcades will need to be a minimum of 100 to 500 meters apart from each other, depending on individual regulation in the regional states.
The regulations were due to come into effect on July 1 but since their implementation will result in closures and job losses, they have been delayed by legal challenges.
The industry says they will result in the demise of thousands of amusement arcades and put up to 70,000 people out of work. The damage to the Treasury from lost taxes could be as much as €1.4 billion ($2 billion).
Impact on Novomatic Unclear
Novomatic has said the changes could shave up to 30 percent off its German operations, but, as a source told Reuters this week, the hold up on implementation is making it “difficult for investors to fully assess the effect on Novomatic’s business.”
The company, owned by billionaire founder Johann Graf, has splurged on acquisitions in recent years. It is currently in the process of acquiring Australian slots manufacturer Ainsworth, which has given it a strong new foothold in the US market.
In June 2016, it completed the acquisition of UK gambling company Talarius from Australia’s Tatts Group, which made it the largest slot operator in Britain.
Novomatic generates around 60 percent of revenues from operating gambling halls and the rest from the sale of gaming equipment.
Related News Articles
888-Rank Ditches Pursuit of William Hill
Australia Considers Regulating Online Poker as Internet Gambling Ban Takes Effect
Australian Lottery Giant Tatts Gets Shareholder Approval for Tabcorp Merger
Most Popular
LOST VEGAS: The Foster Brooks Robot at MGM Grand
Bally’s Sets Date for Tropicana Las Vegas Implosion & Party
Most Commented
-
VEGAS MYTHS RE-BUSTED: You Don’t Have to Pay Resort Fees
August 2, 2024 — 16 Comments— -
VEGAS MYTHS RE-BUSTED: Elvis Was a Straight-Up Racist
August 9, 2024 — 11 Comments— -
ANTI-SOCIAL BEHAVIOR: Vegas Casino Buffet Stunt in Poor Taste Goes Viral
August 16, 2024 — 7 Comments— -
VEGAS MYTHS RE-BUSTED: The Strip Tried Appealing to Families and Failed
August 23, 2024 — 7 Comments—
No comments yet