At the start of January, Novomatic announced that it would be selling one of its primary footholds in the Austrian market: the Admiral Austria gaming brand.
The betting and gaming operator – which is currently the market leader in Austria – will be sold to German sports betting operator Tipico, the companies announced.
Tipico’s acquisition is still subject to regulatory approval, but if it goes through it promises to mark a major shake-up of the Austrian gaming market, tipping the scales away from Novomatic and establishing Tipico as a dominant force in the region.
Meanwhile, for Novomatic, the sale is another decisive step away from its Austrian roots and towards sunnier international climates.
Here’s a closer look at the deal and its strategic significance for both companies.
Tipico’s DACH strategy
Welcoming the Admiral acquisition in a press release, Tipico’s CEO Axel Hefer said it would help strengthen the company’s position in Austria and “broaden [its] leading role in the German-speaking market”.
The sports betting operator was one of the first to gain a licence in Germany when the regulated market opened back in 2021, receiving its transitional sports betting permit in October 2022 and full licences for betting and online slots at the end of 2022 and start of 2023 respectively.
At present, it owns just over 1,000 betting shops across Germany and Austria, around 40 of which are in Austria and are run through a franchise model.
While the operator is licensed in Germany for both online and retail operations, its online vertical in Austria is run through its Malta licence. Against this backdrop, the Admiral deal offers clear advantages for Tipico in the jurisdiction.
A market leader in Austria, Admiral is a well-established brand in the region with a particularly strong retail presence, as well as an online offer. In Novomatic’s last interim financial report at the end of 2023, the gaming giant described its subsidiary as a key driver of growth in the region.
Currently, Admiral operates some 200 licensed betting and gaming premises throughout Austria, 110 of which are branded as sports bars with full gastronomy service as well as dedicated gaming areas.
In addition, Admiral boasts high-profile sponsorship deals with major tournaments like the Austrian Bundesliga and the Austrian national football team.
Tipico could bypass regional licensing process
If the Admiral acquisition is approved by regulators, it will allow Tipico to significantly expand its retail presence while bypassing Austria’s complex regional licensing process.
Normally, land-based operators must apply for a licence through the federal states, each of which has a range of different licensing conditions and processes. Tipico previously struggled with these stringent conditions, occasionally falling foul of tough rules on minimum distances from premises like schools or other betting shops.
Approached for comment on the deal, a Tipico spokesman said he was unable to offer further information until the transaction had been completed. However, it’s clear that the agreement comes during a period of refocusing back onto the operator’s core markets.
In June 2024, Tipico sold off its US sportsbook and online casino platform, winding down its North American operations entirely. Since then, the company has been concentrating on its central European business.
Despite the regulatory challenges in Germany, the operator has previously credited its brand recognition and veteran status as a reason for its resilience in the market – a formula it could be aiming to repeat in Austria.
Novomatic’s international expansion
For Novomatic, meanwhile, selling off Admiral allows the company to divert its resources into more lucrative markets.
In a press statement announcing the deal, executive board member Stefan Krenn said the move would allow the group “to focus on international growth markets and drive further global expansion”.
In its latest interim statements for H1 2023, its business in Austria still accounted for around 12 percent of the group’s revenues. However, Novomatic has also been pursuing an aggressive M&A strategy in recent years, pushing into numerous new European and international markets.
At present, the brand has gaming locations in 50 countries worldwide and its B2B supplier business exports to around 120 countries in total. At the same time, there has been little love lost between Novomatic’s leadership and regulators in Austria.
Why might Novomatic be offloading its Austrian assets?
Years ago, amid corruption investigations into Novomatic’s subsidiary Casinos Austria, founder Johann Graf made a now legendary statement about his homegrown business.
Austria, he said, was where he made five per cent of the profits, paid 100 per cent of the taxes and got 80 per cent of the “crap”.
These days, Graf is based primarily in Florida and, in contrast to Tipico, his business is investing heavily in the US market. In December, the company shook up its American leadership team with the aim of spurring on growth in the region.
Just two weeks after the Admiral sale was announced, the company revealed it had penned a deal to purchase Vikings Casinos SAS, one of France’s leading casino chains. This follows a range of acquisitions in Serbia, Malta, Slovenia and Italy over the past two years.
If passed, the deal could also help Novomatic steer clear of further legal headaches in the Austrian market.
Recently, gambling lawyer Julia Eckhart told the newspaper Der Standard that Admiral was still facing a steady stream of player claims lawsuits dating back to 2015 and prior.
Players who lost money on Admiral slots in Vienna before this date have been attempting to recoup their losses by arguing that some parts of the gaming machines weren’t legal – with occasional success.
According to Eckhart, the 30-year statute of limitations on these claims means that players could still launch complaints in the future, even after a potential Tipico acquisition.
Austria on the cusp of change
Admiral also operates some gaming and lottery machines in the Austrian market. Tipico’s interest in the company could signal it is preparing for Austria to potentially open up its online gaming market this year.
At present, online betting is legal in some of the federal states, provided operators have a physical presence in Austria. However, online slots and casino-style products are subject to a de facto monopoly and largely outlawed for private operators.
The country’s only online gaming and lotteries licence was granted to Österreichische Lotterien back in October 2012. The permit is valid for 15 years, meaning it is due to expire in 2027.
With the far-right Freedom Party (FPÖ) currently thrashing out a coalition agreement with the conservative People’s Party (ÖVP), industry insiders see an opening for a regulated online gaming market in Austria.
As the tender process for an online licence kicks off again in 2025, this year presents a prime window of opportunity.
Original article: https://igamingbusiness.com/strategy/ma/what-tipicos-admiral-acquisition-means-for-its-austrian-expansion/
