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Austria – Novomatic’s Austrian licences to be retendered

By - 20 July 2016

The Administrative Court in Austria has said that the award of two of three new Austrian casino licenses by the Treasury in June 2014 did not satisfy ‘ transparency requirements’ meaning licences in Bruck an der Mur in Salzburg and Prater, in Vienna’s second district of Leopoldstadt, previously awarded to Novomatic could be re-tendered.

In Salzburg, Casinos Austria’s project called Casino Wachau was beaten by Novomatic by just 0.74 points in a point scoring system that awarded Casinos Austria 424.55 points and Novomatic 425.29 points.

Ruling that the ‘procedure was not transparent,’ the Administrative Court, said: “Because of the substantial procedural violation including the failure to publish the decisive scoring for the award sub-criteria along with the weightings, the Minister of Finance shall not vote again on the already existing applications. Whether other licenses are tendered again, is still open.”

The decision of the Adminstartive Court followed a similar ruling by the Federal Administrative Court.

It still has to decide whether to retender other licences in Vienna and Lower Austria.

Casinos Austria Director General Karl Stoss said the operator was ‘very happy’ with the ruling. “The law has spoken,” he said adding that the ruling was correct.

Hannes Reichmann, spokesman for Novomatic, said: “We accept the verdict of the Administrative Court to the attention and now wait to see if and when it comes to a new tender.”

Novomatic has been in the process of building two state-of-the-art flagship casino operations comprising a fully-fledged casino at the existing Vienna Prater slot hall and a completely new casino and hotel complex in Bruck an der Leitha in Lower Austria.

The third licence for Wien Süd-West, more specifically the Palais Schwarzenberg, was awarded to Swiss operator Casino Baden AG and German machine manufacturer Gauselmann.

In 2011, after the European Court of Justice had found the Austrian gaming monopoly contrary to European law, the Austrian Ministry of Finance launched a tender process for Casinos Austria’s 12 existing casinos as well as the three new casino licenses. Six of Casinos Austria’s licenses for city casinos were due to expire at the end of 2012. In December 2012, these licenses were again awarded to Casinos Austria for a period of 15 years. The remaining six licenses for casinos in regional areas were re-awarded to Casinos Austria in October 2013, leaving the three new licenses in Vienna and Lower Austria up for tender. The new casinos will not only creates 100s of new jobs but also bring a new impetus to the Austrian casino landscape. New players on the market with comprehensive international casino expertise, state-of-the-art equipment and premium casino establishments like Novomatic will create a new competitive environment on the Austrian market and effect a revival of casino gaming as a sophisticated entertainment offering.

Since the award of the new Austrian licences, Novomatic has partnered with Sazka Group, made up of KKCG and Emma Capital, to take control of Casinos Austria.

The pair had been going head to head for a majority shareholding in the Austrian group, snapping up shares wherever they could, but had forced each other into an awkward cul-de-sac. However, the two
opted to work together instead of against each other. Their long-term strategic partnership will see the groups becoming equal partners in a joint venture company involving their purchased and soon-to-be-purchased shares of Casinos Austria and the Austrian Lotteries, equating to more than 51 per cent of the company.

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