Nrw: Sales of Westspiel Begins

Business experience plus equity

In June, the state gave the green light to the controversial sale of the Westspiel casinos. Despite a number of controversies surrounding the privatization of the state-owned casinos, the concession process has now been initiated. The official announcement was made in an EU official journal. Around 1,000 employees are affected by this, spread across the four main locations in Aachen, Bad Oeynhausen, Dortmund (Hohensyburg) and Duisburg.

A few requirements apply to the new licensee: Firstly, the buyer must have been active in the casino business for at least three years. Secondly, he must have at least 20 million euros in equity capital. In return, the buyer also receives an additional license that allows the operation of up to six casinos. So two more locations are allowed to open, where exactly is up to the new concessionaire.

The total value of Westspiel is currently put at 2.7 billion euros. However, this sum says little about the final purchase price, which is not yet known. It is clear that Westspiel can look back on difficult years full of lulls. In 2019, profits of EUR 3.2 million were made again. What is also certain is that the duration of the concession is set for a period of 15 years.

The allegations of mismanagement can be traced back to the Ministry of Finance. Minister Lutz Lienenkämper called Westspiel (among others) a catastrophically managed and permanently loss-making company. The presentation methods are massively criticized by the works council and the state parliament opposition. There has even been talk of tricks in the privatization of the Western Games. According to the SPD, the black and yellow coalition should try to sell the casinos as quickly as possible. According to the works council, this is done on the basis of exaggerated figures and at the expense of the employees, whose interests are not taken into account at any pointigt.

Gauselmann vs. Novomatic?

NRW assumes that only a handful of bidders are interested in buying Westspiel. However, in the fight for the license there could be a real duel of giants: Gauselmann against Novomatic. It is said that the Merkur owner Gauselmann, who is based in Espelkamp and already acts as a Fortuna sponsor in Düsseldorf, has expressed his interest in Westspiel for a long time.

However, the fact that Gauselmann has repeatedly criticized the planned reduction of arcades in Düsseldorf in the past speaks against this. Due to a new minimum distance requirement, the city is planning to dismantle over 100 arcades. Gauselmann spoke of a total loss and took issue with the legislators. The reduction in arcades is also being criticized in other cities, for example Berlin.

Austrian gambling giant Novomatic AG is also said to have expressed interest in Westspiel. Although Gauselmann and Novomatic are considered arch rivals, the two already run several casinos together in Berlin. NRW is said to have pointed out that Westspiel may also be assigned to several partners if they can agree on the use of the respective location.

Casinos Austria, which took over ten casinos in Lower Saxony in 2004, is also said to be interested. Another candidate is the Malta-licensed betting provider and FC Bayern sponsor Tipico. However, it is unlikely that Tipico can provide the necessary proof of experience in operating casinos. In addition, they run against Tipico is currently investigating for illegal gambling. Since the provider only has a German betting license but also offers online casino games, the Frankfurt public prosecutor's office initiated proceedings in November.

Finance Minister Lienenkämper satisfied

While the state parliament opposition criticizes the government's approach and the Westspiel employees fight for job guarantees, Finance Minister Lienenkämper recently appeared satisfied with the development: It is positive that the state is no longer at the gaming table. The concession process was free of discrimination, transparent and designed according to Europe-wide regulations.

All interested parties must now register to take part in the first phase (by February). The next step is to qualify for the offer and negotiation phase. The process will probably last until the beginning of 2022. It remains to be seen who will win the race. Meanwhile, further headwinds are expected from the opposition and the works council.

Despite vehement protests regarding job guarantees, Westspiel's management had announced two and a half hours of overtime per week before the Corona crisisigt and called for the regular protection against dismissal to be waived. Salaries are said to have not been increased since 2015. Perhaps a change in ownership is not the worst prospect for the company.