In an interview with Yogonet, two members of NOVOMATIC’s Board of Directors, Johannes Gratzl and Ryszard Presch shared an overall year-end assessment of the gambling industry’s recovery. They shared insights regarding the company’s market expansion plans and hopes for the upcoming year.
What would be your year-end assessment for Novomatic, especially regarding the gambling industry's recovery, and key developments in the different markets and verticals you operate?
Johannes Gratzl: The first half of 2021 was still significantly impacted by the COVID-19 pandemic, as many countries continued to employ measures such as lockdowns or temporary closures of business premises to contain the spread of the virus. In most of the NOVOMATIC AG Group’s markets, the lockdowns lasted several months throughout which the gaming operations were forced to remain closed. This temporary suspension of business caused the Gaming Operations segment to record significant declines in revenue.
Nevertheless, a visible path out of this crisis emerged as the year continued, not least thanks to steadily increasing vaccination rates in many countries. Towards the summer months, the situation eased and allowed a gradual return to operation, albeit with the respective safeguarding and distancing measures in place. By the end of June, almost all gaming operations had reopened, but restrictive measures remained in place in most markets, such as minimum distances between gaming machines and tables, restricted opening hours, or the introduction of a maximum number of customers on the premises.
Ryszard Presch: The situation affected the NOVOMATIC AG Group’s proprietary operations in the same way as it affected our customers’ businesses. During the periods of lockdowns, NOVOMATIC focused on the one hand on the best possible support of its B2B customers and on the other hand, on the development of fresh and new products for the moment when business would gradually return to a new kind of normal and operators would consider investing in new products again. The NOVOMATIC R&D units placed a special focus on the Progressives segment, with products such as the CASH CONNECTION Linked Progressive multi-games that proved especially popular with both operators and players.
In 2021, online gaming was again the business vertical that benefited from the general conditions with growing revenues, both in the online gaming and betting segments. The lockdowns in the various markets as well as market entries in a number of markets had a positive impact on online business activities. The successful launch in Germany, the market opening in the Netherlands as well as the major opportunities in the US with a number of states presenting newly regulated online sports betting and gaming markets created room for unprecedented growth.
Where will Novomatic's focus be in 2022 and what new milestones should we expect the company to achieve? Which priorities, goals, and plans for next year could you anticipate?
Ryszard Presch: Primarily, we hope that in 2022 the pandemic will be pushed back so far that this year will again be one that is marked by personal customer contact, be it at major events such as trade shows or customer visits. Hopes are strong that the gaming industry will be granted the opportunity to gather at ICE London at least sometime in spring. While the international NOVOMATIC teams eagerly look forward to personally meeting customers and partners again, we must nevertheless exercise caution and protect the health of our customers and employees as best we can. Meanwhile, the R&D departments are putting the finishing touches on a portfolio of new products that are all set to inspire and which will certainly have the potential to become milestones.
Another priority will certainly remain our focus on customer requirements, both in terms of service and support as well as in terms of product development. The best way to support our customers is always to provide products that deliver premium performance on the floor and yield a quick ROI. That is our ultimate goal in terms of product development – and in times like these, even more so. In the current economic climate, B2B customers are forced to consider every investment particularly carefully. As a technology provider to the industry that at the same time, operates in many markets as a gaming entertainment provider, NOVOMATIC has the unique advantage to be able to rely on first-hand experience when it comes to market-specific player preferences. Our customers don’t have to test the products in their gaming premises – we’ve already tested them in ours.
Johannes Gratzl: In regional terms, we will further expand our market leadership in our European core markets, such as Germany, Italy, Spain, the UK, the Netherlands, and numerous countries in Eastern and Southern Europe. In our growth markets such as the USA, Australia, Latin America, and Africa, we also expect to achieve significant growth in market share over the next few years. Due to the expected further market liberalization in some US states, we continue to see particularly great potential in the United States. We have already been able to leave a sustainable footprint in this market with our subsidiary NOVOMATIC Americas and our investment in the Australian company Ainsworth Game Technology Ltd.
What are your outlooks, expectations for 2022, and what do you think will be the new challenges, both for the gambling industry and Novomatic in particular? What will be the main issues driving the agenda?
Johannes Gratzl: First of all, we hope that ICE can eventually take place later this year, of course with all prevailing safeguarding measures and protocols in place. Much of the year’s industry outlook is based on this major industry event and the climate it sets for 2022 and we – again – hope that it will be a spirit of optimism.
The further development of the NOVOMATIC AG Group for 2022 is expected to be positive. Despite new COVID-19 mutations such as the Omicron virus variant that complicate the assessment of the further course of the pandemic, the increasing global availability of vaccines as well as the rising vaccination rates, in particular, mean that the general conditions should be less restrictive. Almost all markets in which the NOVOMATIC AG Group operates have already relaxed their restrictive measures in the past months. Experience has shown that once gaming operations reopen, guests return in high average numbers.
Ryszard Presch: NOVOMATIC will continue to meet any challenges in 2022 and beyond with its well-balanced business model that builds upon the gaming operations business, the development and sales of gaming technologies and solutions as well the activities as a provider to the ever-growing international regulated Online and sports betting markets.