Online Gambling's Novomatic Faces Probe in Romania

Published Monday, October 12, 2015 -
Online Gambling's Novomatic Faces Probe in Romania

Online gambling includes lotteries all over the world and it comprises a big segment of revenue for various jurisdictions. Now there is a probe launched into a failed deal between Novomatic and Romania’s National Lottery where Novomatic is accused of not producing a promised €75 million in guaranteed revenues.

Novomatic headquartered in Austria is an international gaming company, founded by the billionaire Johann Graf in 1980. In 2012, total revenue was 3.2 billion euro, with profit of 359 million euro.  The firm has offices in 43 countries and also operate casinos, including in locations such as Berlin and Santiago, Chile.

The Novomatic subsidiary Novo LVTech Solutions signed a partnership arrangement to provide video lottery content with Romania’s National Lottery in 2013. The Novomatic announcement stated Novo LVTech Solutions was committed to provide 10,000 state-of-the-art video lottery terminals (VLTs) as well as relevant video lottery system, including a jackpot system, maintenance services, spare parts and logistics, in the locations provided by the state lottery for a period of 15 years.

The deal stated that the joint revenues after expenses would be split fifty fifty between the two companies, and it guaranteed Loteria Romana a proportionate minimum revenue of €75 million.

The Romania Insider news source reported that Novomatic claims Loteria Romana has only been able to accommodate  5,000 video slots to date, resulting in the states failure  to meet the criteria listed in the contract and will thus not receive the guaranteed revenue.

The authorities in Romania are afraid the new contract with Novomatic considered a good one at the time would be much better than one the Loteria Romana signed in 2003. The 10-year agreement with the Greek headquartered Intralot Group has been catalogued by the Ministry of Finance as “one of the most damaging contracts” ever made by the state.


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