Germany-facing operators: It’s business as usual despite Novomatic exit
Several firms tell EGR nothing material has changed in the market despite the Austrian company’s sudden exit
Germany-facing operators have downplayed the regulatory risk to their businesses following Novomatic’s exit from the market last week.
The Austria-headquartered firm recently pulled its online casino games from the market without warning, leaving several firms scrambling for replacements.
The provider gave little reason for its departure but claimed there was a need for German regulators to revamp online gambling rules because the current situation was “unclear”.
The ostensible catalyst for the decision is a ruling in late October from the German Federal Administrative Court, which confirmed the legality of the general ban on online casino.
Following Novomatic’s exit, analysts voiced concerns about the sustainability of the German market, with Regulus Partner’s Paul Leyland warning of a potential “very severe regulatory shock” to operators in the short to medium term.
However, several Germany-facing operators have told EGR the risk could be overblown with nothing materially different about the country’s legal situation.
One source said the court ruling was the latest in varying interpretations of the law, and since the law itself had not changed, the firm would continue to offer casino.
He also pointed out that Novomatic’s online revenues accounted for a single-digit percentage of its overall revenues making the decision an easy one.
Another source at a Germany-facing firm suggested Novomatic was particularly risk-averse with its online strategy in an attempt to protect its land-based operations from any regulatory backlash.
German gaming lawyer martin Arendts also told EGR: “Currently, the ban on online casino games is not enforced at all, so, from our point of view, there is no compelling reason to withdraw from the German market at the present stage.”
Attempts to properly regulate the market have stalled in recent months after at least three states refused to sign the amended State Treaty on Gambling.
Their refusal means the 12 state Prime Ministers will have to come up with a new version of the treaty, with their next conference scheduled for February.