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Germany – Success for Gauselmann but German restrictions a concern

By - 26 June 2017

From a purely economic perspective, the family-owned Gauselmann Group closed the 2016 financial year on an extremely positive note. Cumulative sales of all entities in the Gauselmann Group were up by 14.2 per cent to €2.53bn.

Adjusted for intragroup sales, sales revenues climbed by 17.8 per cent to €1.72bn– an increase of €260m. Hand in hand with this, the number of employees rose in the same period by 1,198 to total 10,438 games makers worldwide.

This growth is above all attributable to foreign sales, which have risen steadily for the past several years, whereas the share of sales of the German market is now just over 50 per cent. In the ongoing business year, foreign sales will for the first time account for substantially more than 50 per cent.

As a result of the Glücksspieländerungsstaatsvertrag (“First Amended Interstate Gambling Treaty”) and the respective state arcade laws, the situation in the home market of Germany is difficult, although a growing number of players use and enjoy the products and services, but remain silent.

“All in all, the Gauselmann Group achieved a good result in 2016. What the raw numbers do not reveal, however, is that as a result of the legislation many arcades in Germany continue to be directly threatened by closure,” said Paul Gauselmann, founder and Chairman of the Management Board of the Gauselmann Group. “Although for the past 65 years the Gauselmann Group and the coin-op sector in general have ensured that people’s desire to play has been kept in check in a coordinated manner.”
This includes extensive protection of players and minors, an area in which the Gauselmann Group is seen as a pioneer. In cooperation with leading companies for biometric control systems, the company has developed the Face-Check automatic admission control system for arcades, which with the help of biometric data ensures the exclusion of barred players and minors under the age of 18.

Internationally, the Gauselmann Group was again able to grow through further acquisitions in the financial year 2016: sales increased by 23.6 per cent from €673m in 2015 to €832m in 2016. To ensure the organisation is well-positioned to meet future challenges, the Gauselmann Group has optimised the structure of its business segments, splitting them into the four pillars Merkur, Gaming operations, Sports betting and Online gaming.

The equity of the family-owned company, which was founded in 1957, increased in 2016 by 12.6 per cent to €775m (2015: €688m), which corresponds to an equity ratio of 54 per cent.

Vice-Chairman Armin Gauselmann added: “The Gauselmann Group has always reinvested realised profits – in recent years primarily in international markets – with the result that despite the difficult situation on the German market, we are now able to run an extremely successful organisation. Through their commitment and passion, our employees have, of course, played an important part in this.”

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