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NOVOMATIC

Of all of the top Austrian companies, the largest and perhaps most intriguing of them all is Novomatic either through its slots manufacturing Austrian gaming industries company or through its substantial operating business under the admiral label.

Intriguing because it is the most classic example of the gaming machine industry’s ability to turn out success stories – if they are accompanied by determination and sheer hard work.
      I remember Johan Graf when his Novomatic was a small distributor of JPM machines 30 years ago in an Austria which was far more liberal in its attitude towards the AWP or limited payout machine.  He built a veritable empire on those early successes with JPM; an empire which today encompasses almost every tenet of the gaming industry from LGMs to casino slots, from multiplayer automated table games to video lottery terminals and operating from small arcades to the most luxurious of international –standard casinos, and form single machines in bars to sports betting shops.


      It has been achieved despite the antipathy of his own country to the gaming industry, an antipathy which has seen a monopolistic policy empowered to prevent his own participation in casinos  in Austria and a limited gaming machine market restricted to a total of only about 5,000 machines.
      The Novomatic empire, however, stretches across three continents, principally Europe, Africa and South America with every intention of investing further in the great challenges of Asia.


      President Graf, honored by his country for his contribution not only to its commerce but though his many, often –unsung works of charity in Austria, retains today the same degree of energy that created his group of companies. Still just as approachable, he displays a keen awareness of the opportunities which remain there to be grasped even in an industry so much more sophisticated than in its early days.  All of this is tempered by an overriding demand – almost an obsession – with what he calls ‘transparency.’ “Everything we do, every company we ally ourselves with, every new market we enter, must be legitimate.  We won’t deal anywhere or in any product, which even has a shade of gray.”
      His own view of Austria’s unique standing in the games and gaming business for such a comparatively small country, demonstrates his awareness of the importance of technology.  “I think that Austria has grown to be a world leader in our field because it has always been a natural breeding ground for innovation and technology.  Why do you think so many products of the automotive industry are here?  Why are Porsches designed here?  Add to that the fact that the monopoly here in our industry compels every one of us to depend upon our energies in the exports market to succeed.  It is not just our own company – look at Amatic and the successes they have had; why did the Gauselmann Group in Germany come to Austria?  Places like Styria and Graz have a reservoir of talent born from an excellent educational system and this attracts international companies to set up here and provides the know-how to drive Austrian companies in the export markets.”

     

Novomatic draws upon these talents from Austria, but also from other counties.  The group funds an entire technology department at Krakow University in Poland, from which many of the group’s technological advances emerge.
      The opportunities offered by these technology advances have to be harnessed to the right products and then applied to legitimate markets.  “This is perhaps the key to the future of the industry – legitimate markets.  Sometimes our hands are tied by a need to remain transparent and this prevents us entering some markets, this and monopolies. You have a monopoly situation in Germany, for example, with the lottery, you have a casino monopoly situation in the Netherlands as well as here in Austria.  I think these monopolies will become weaker as society evolves and barriers come down before common sense.  It is only matter of time.  I am looking forward to the day when there is just one law in Europe to cover all facers of gambling, but as an ‘umbrella’ law, with individual variations to cover local necessities.”
      International agreements to regulate internet gambling is a priority, he said.  “There are ways to do it.  You can control money transfers through the banks and it will also control money laundering.  But with the internet, just as with any form of gambling, there must be safeguards for the young and the vulnerable.  We must devise ways of heading off that problem before it even begins.”


      The structure of the group sees no fewer than three holding companies, Novomatic AG in Austria, and the other two based in Switzerland to control the three Swiss casinos in the group and a range of operating businesses outside of Switzerland, notably in the Czech Republic.
      Opportunities remain in Europe, he feels, as well as in the other continents where Novomatic is already strong.  Africa and South America.  But it is to the east that his attention is turning, with the first TouchBet Roulettes going into the new Macau market and already a strong machine investment in Genting in Malaysia.  “it is the biggest TouchBet configuration in the world,” he added with some pride.
      “We have an office in China for purchasing purposes and we are now the biggest buyer of flat screen monitors, having purchased 250,000 of them from Samsung.  We innovated  the double screen game using them.’
      He admits to a fascination with Asia and its probable opportunities.  “We are keeping an eye on the situation there-indeed, we watch every market very carefully to judge the right moment to take appropriate action.”  Meanwhile, branches in South Africa and in Argentina keep Novomatic strong in those markets.  “Europe must be our major business.  We are expanding rapidly into fresh areas such as the Balkans and in the Ukraine.  Russia, of course, is important to us, especially once its gambling laws are relaunched as I know that they will be shortly.”

      It is not, of course, just the casino market which takes.  Graf’s attention.  His recent purchases of Lowen the major German AWP marker and of Astra in the UK, demonstrate a determination to build on his street market businesses.  The philosophy is simple: we are in the gambling business and in a premium market both for slots and AWPs  or limited payout machines.  It is important for the development of games and of quality cabinets into which to put them, that we have quality companies in those sectors.  Both Lowen and Astra are examples of that.  The people within those companies demonstrate the point still further, Uwe Christiansen at Lowen and Neil Chinn at Astra, with Ron Watts one of the top games designers in the world, all emphasize our commitment to this sector.”
      And what will this concentration on quality companies and quality people produce for the industry in the near –future?  Watch for video lottery terminals with downloadable games, a wide range of new participation games.  Further on there will be a greater concentration on internet games – the company already operates 150 Admiral Sportswetten, betting shops – with the ability there already to prevent internet games from being played by people in illegal jurisdictions.
      Self-imposed restrictions do not hamper the company’s growth, however.  He was able to reveal that the group forecast for the fiscal year 2005 will hit the £ 1.bn turnover, up from £ 700m in 2004.
      A keen supporter of the ‘teamwork’ philosophy of running a major multi-faceted business, President Graf is also determined to lead by example.  No-one in his 6.500 employee workforce works longer hours, nor with a greater eye for detail.  He displays no inclination to slow down or step back and remains consumed with the desire to succeed, even though the point has already been made..

 
 
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