In Albania, they have already entered the gambling market: Will Austrian Novomatic take over BiH Lottery too?

Lutrija BiH could soon become the property of the Austrian concern Novomatic, which continues to conquer the markets of Eastern and Southeastern Europe, writes Patria.

The ultimate goal of this concern is to dominate this part of Europe and completely take over domestic markets from state and private gambling operators. These intentions were confirmed by Novomatic's CEO Harald Neumann, after Novomatic completed the full takeover of the state lottery of Albania a few days ago.

- Eastern and Southeastern Europe are among Novomatic's most important markets, mainly because Novomatic became active there long ago. After becoming the 100% owner of the state lottery of Albania, we intend to continue applying this strategy and strengthen our position in this part of Europe - said Neumann.

Through a tender in 2012, the ten-year license for managing the state lottery of Albania was awarded to the Albanian company “Lotaria Kombëtare”, which is a subsidiary of the Austrian company “Österreichischen Lotterien”, in which Novomatic has an 18% ownership stake since July 2015.

Novomatic also owns a 40% stake in the company “Casinos Austria”, which is the majority owner of the company “Österreichischen Lotterien”. In this way, Novomatic managed to take ownership of the state lottery of Albania. This Austrian company could apply a similar model and take over Lutrija BiH.

Private gambling operators in the Federation of BiH claim that this would not be good for the Federation, and emphasize that the proposal for taxing gambling, which was recently determined by amendments by the Government of FBiH, is nothing more than a service to Novomatic.

- If the Government's Law on Gambling is adopted, the slot machines of the Austrian company Novomatic AG, which are installed in the branches of Lutrija BiH, will threaten the business of domestic betting shops in FBiH, which employ 5,500 workers, claim domestic gambling operators.

Novomatic established the company “HTL d.o.o. Sarajevo” in the Federation of BiH, which installed 1,500 Novomatic slot machines in Lutrija BiH. According to the “Audit of Lutrija BiH” from 2011, it is evident that Lutrija BiH and the company HTL d.o.o. Sarajevo have a cooperation agreement signed in 2006, and according to that agreement, they share the revenue generated from the slot machine system in a 50% : 50% ratio. Critics consider this to be a catastrophically damaging contract for Lutrija BiH.

- In the 10 years that Novomatic has been operating in BiH, it is very likely that this company has collected over 80 million KM from BiH citizens.

With the amendments that the Government of FBiH has determined and which will soon be before the delegates in the House of Peoples of the Parliament of the Federation of BiH, the Government of FBiH has foreseen higher taxation of domestic betting shops than slot machines, of which Novomatic has 1,500 in Lutrija BiH. Thus, the Government of FBiH proposes taxing all stakes and all winnings in domestic betting shops, while for slot machines there is no taxation of stakes or winnings, but only the difference between stakes and payouts would be taxed. Domestic betting shops also want such a model, but the Government refuses to accept it.

- When you compare how Novomatic became the owner of the state lottery of Albania and when you know that Novomatic, through its company HTL d.o.o. Sarajevo, already has a strong presence in the Federation of BiH, it is clear that these amendments by the Government of FBiH are a conscious and intentional service by the Government of FBiH to Novomatic. Why else would the Government of FBiH foresee higher taxation of domestic betting shops than Novomatic's slot machines?, ask domestic operators.

The Albanian government succumbed to Novomatic's onslaught and handed over the state lottery and the entire gambling market to this Austrian concern. Novomatic does not intend to stop there, and Bosnia and Herzegovina could be next.

At one of the next sessions, delegates in the House of Peoples of the Parliament of the Federation of BiH will decide on amendments to the Law on Games of Chance. If they adopt the amendments of the Government of FBiH, it can also be seen as giving the “green light” to Novomatic for the complete takeover of the domestic market in FBiH, writes Patria.