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European Giant Spreads Its Wings

Austrian Gaming Industries making mark around the world

European Giant Spreads Its Wings

As he arrives at the Novomatic/Austrian Gaming Industries (AGI) booth at the SAGSE trade show in Buenos Aires, it’s already been a long month for Jens Halle.

“We were just in Madrid at the Spanish trade show,” he says, “so I can barely keep track of the countries”

But that’s the price you pay when your company is one of the hottest in the gaming industry and you want to capitalize on the popularity of your products. Whether it’s the company’s Gaminator, the popular multi-player games or the exclusive Streamline cabinet, AGI seems to have hit the sweet spot when it comes to gaming trends.

Halle says the company is flying high because it is so dependent upon its R&D department. In fact, AGI was formed by combining the R&D department with the various production divisions, the international distribution organizations and the marketing department of the former Novomatic Industries GmbH.

“AGI has its roots at the heart of Europe but can now be considered a truly global player,” he says. “From street operations to the highest status casino operations we draw experience and knowledge, refine our product range through a significant (more than 10 percent of turnover) re-investment in research and development and use commercial knowledge and insight to bring those products successfully to the market.”

That commercial knowledge comes from the company’s role as an operator of casinos and slot parlors throughout Europe. While American companies have most withdrawn from operations, Halle sees a tremendous advantage to it.

“The Novomatic Group has stated its intention to achieve a 50/50 parity between sales and operations within the next 12 months,” he explains. “The advantage to the group is in achieving the aims of the business plan drawn up by our senior management.

“In terms of AGI, the advantages are obvious. By having successful operations we can test and refine our products, we can and do observe market trends and the preferences of our guests. That knowledge is invaluable and is the stepping stone between research and development and commercial success.”

AGI uses Novomatic’s casinos as test grounds for its machines and systems.

“AGI benefits from the opportunity to test new developments in casinos and slot arcades and to launch innovations in the market only when the players’ response is truly enthusiastic,” says Halle. “This minimizes the risk to casino operators who additionally benefit from the strong commitment to Excellence, the precision processing of superior materials and customization to meet specific customer requirements.”

Background & Basics

The history of Novomatic Group is replete with examples of anticipating or actually creating trends. Formed by Dr. Johann F. Graf, who is the president of the company. Today, Novomatic Group contains five subsidiaries involved in developing technology and manufacturing games for the gaming industry and operations of more than 240 casinos and slot arcades around the world, operating more than 20,000 machines. Some of the casinos in those companies are operated by still other subsidiaries, which Halle calls essential

“It is necessary,” he says, “and it is also extremely valuable. Having local capabilities on the ground means being able to respond to market demands and trends that much faster and at source. Take, for example, the recent major expansion of gaming Latvia. We have been aware of the developments and the regulation changes and through investment of people and infrastructure, we have achieved a market leading position through our efforts directly in the country.”

With headquarters and operations primarily in Europe, Halle is anxiously awaiting streamlined regulations that will allow the company to capitalize on its strengths.

“The gaming sector within the E.U. is many faceted,” he says. “The big question is ‘when will gaming legislation be harmonized within the E.U.?’ and the answer is that, as of now, no one really knows.

“Legislation is only ever definitive at the start-up of a new jurisdiction. Everywhere else the pattern of laws and the regulations that go with them are evolved over time. Naturally, that means that there are differences between individual markets.

“Novomatic has built its reputation and its successful business from a European base, particularly from success in eastern European countries. Through experience we know how to operate in all E.U. and adjacent markets and our success is based on market knowledge and having the flexibility to comply with current regulations, country by country.”

AGI has chosen to be involved in almost every facet of the European gaming market: casinos and route operations (AWP, VLT, LPM) along with networking/online technology for the gaming and leisure industry.

Games and Systems

One of the company’s most successful niches is the multi-player games. AGI was one of the first companies to perfect the automatic roulette games and players have responded to their to their expertise.

Halle says the response of the players is a result of many years of understanding the markets in which they operate.

“Experience, experience and experience!” laughs Halle. “We gather knowledge and experience and re-invest tremendously into research and development in order to meet the needs of each specific market.”

At SAGSE, AGI showcased two new slot cabinets and several additions to its gaming library.

“South America is a major expansion focus for us,” said Halle. “We are already present in South America and have exhibited in trade shows in Peru and in Chile. The demand from customers from numerous South American countries for our innovative products has been accelerating recently, and we of course will react positively to that.

“As one of the world’s most dynamic and fastest-growing gaming regions, we believe that it is completely appropriate that our world-leading products should be featured prominently at the region’s largest trade exhibition. We have chosen to mark this special occasion by launching some key product innovations at the show, and we are confident that these will be exciting for the decision-makers from across the continent who will attend SAGSE.”

AGI demonstrated new games in its Coolfire II video slot platform, along with innovative new cabinet styles, and also is using the show to introduce South America to Flex-Link, a jackpot system from Independent Gaming Pty. Ltd. in Australia that is being distributed by AGI.

“Product innovation is AGI’s strongest characteristic,” claims Halley. “Of course, timing when to bring new products to market is a skill in itself and you can expect some exciting new developments in Las Vegas at G2E. New games, new multi-games, new multi-players and much more.”

Along with great products, Halle knows that service after the sale is just as important.

“Technical support is absolutely vital and we give 100 percent maximum effort to ensuring that our customers are looked after correctly,” he says. “Through our dedicated 24-hour helpline, to technical assistance with installations and upgrades and right through to problem solving ‘on demand’ problems, we offer a technical support that is the very best the industry.”

International Outreach

In Latin America, AGI has found its highest level of success in any non-Europe venue.

“We are no strangers to the South American markets, having enjoyed considerable success already in various jurisdictions, Peru and Uruguay, for example,” says Halle. “We have announced publicly that South America is a key expansion target for us and that is one reason why we have taken a serious position within the SAGSE show for the first time. The Novomatic Group also has plans for operational expansion. We will build and open the largest casino in South America in Chile during 2008 and that will be a springboard to other significant opportunities in the region.”

As with most manufacturers (and operators), expansion into Asia is a key part of the business plan for AGI.

“Like South America, Asia is a key expansion region for AGI,” Halle says. “We already have business in Macau and other installations in the immediate future in the Philippines and South Korea. We have done our preparation work in terms of licensing, customer base and local requirements, now we are going full speed ahead throughout the region.”

The confluence of the Australian market and already established business relationships make that region another growth area.

“We have a strong strategic alliance with an Australian company, Independent Gaming PTY Ltd of Sydney, New South Wales and we see that as the route for developments ‘Down Under,’” Halle says. “Asia (where Independent Gaming is also strongly linked to us) is the key but Australia is also on the menu for the near future.”

The time-consuming process of licensing makes breaking into the U.S. market as quickly as he would like more problematic, says Halle.

“The strategy for a significant entry into the U.S. market is determined, of course, by license acquisition and product approvals,” he says. “With such a multi-faceted market that takes a huge amount of time and money. Neither of those are a difficulty but we have to take priorities in many international markets. Native American gaming is changing right now and we have plans in some of those jurisdictions. This stems from our already granted license in Colorado, and expansion will take a planned course over time.”

The goals of Novomatic and AGI will only be accomplished if Halle can continue to motivate, which is one of his talents. He plans to do just that.

“Everything that happens here is a combination of the products and the people,” he says. “Since the inception of Austrian Gaming Industries as a wholly owned subsidiary of Novomatic the company has been totally focused on the needs of the international gaming market and how to provide the best solutions.”

SIDEBAR:

Novomatic Group Goals

• Expand operational activities including casino shareholdings, the operation and management of casinos, slot machines in casinos, slot arcades, and in route installations, as well as bingos and sports betting;

• Obtain market leadership as a manufacturer and supplier of cutting-edge gaming equipment and services in Europe;

• Extend the technological lead in the area of electronic live games and gaming solutions;

• Expand activities into new controlled and regulated markets in selected jurisdictions worldwide with a clear focus on Europe;

• Continue to be a pioneer in emerging regulated markets;

• Use of multiple distribution channels to further enhance market presence;

• Expansion of core capabilities to move into new growth markets;

• Continuous development of leading-edge gaming technology and services as a partner to the international gaming industry, and

• Ongoing training and development of highly skilled employees as a basis for continuous growth and the guarantee of customer satisfaction. (Source: Novomatic Group of Companies Mission Statement)

 

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The Novomatic production plant Komorany, Czech Republic

 

Members of the Novomatic Group

• Austrian Gaming Industries GmbH (AGI), the original bearer of the name Novomatic that was renamed in 1996 and is today a market leader in the realm of cutting-edge casino technology and interactive live games;

• Astra Games Ltd., which designs and manufactures amusement machines for both the U.K. and overseas markets;

• European Data Project (EDP), located in the Czech Republic; with its two large production facilities and the Paradise Casino Admiral gaming establishments EDP is a market leader in the new EU Member State both as a manufacturer and an operator;

• NSM-Löwen Entertainment GmbH, the second-largest manufacturer of slot machines, fun games and amusement devices in Germany;

• Admiral Sportwetten GmbH (ASW), which is the Austrian market leader in the realm of betting shops.

This is the lead story to our annual roundup of the best and the brightest in the newest slot machines and systems….. Global Games 2007 continued click here

Roger Gros is publisher of Global Gaming Business, the industry's leading gaming trade publication, and all its related publications. Prior to joining Global Gaming Business, Gros was president of Inlet Communications, an independent consulting firm. He was vice president of Casino Journal Publishing Group from 1984-2000, and held virtually every editorial title during his tenure. Gros was editor of Casino Journal, the National Gaming Summary and the Atlantic City Insider, and was the founding editor of Casino Player magazine. He was a co-founder of the American Gaming Summit and the Southern Gaming Summit conferences and trade shows. He is the author of the best-selling book, How to Win at Casino Gambling (Carlton Books, 1995), now in its fourth edition. Gros was named "Businessman of the Year" for 1998 by the Greater Atlantic City Chamber of Commerce, and received the Lifetime Achievement Award from the American Gaming Association in 2012.

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