The Forest County Potawatomi Gaming Commission has launched a suitability review into Ainsworth Game Technology Inc. (Ainsworth US), the US subsidiary of Australian slot machine supplier Ainsworth Game Technology Ltd. (AGT), and submitted a Request for Information in response to ongoing criminal proceedings and investigations involving AGT’s parent company, Austrian gaming giant Novomatic AG.
In documentation viewed by CDC Gaming, the Commission also alludes to “allegations of corporate governance deficiencies and undisclosed financial transactions involving [Ainsworth US] executives and associated persons,” explaining that it must determine whether these matters impact the suitability of Ainsworth US as a currently licensed vendor within the jurisdiction.
The Forest County Potawatomi Gaming Commission oversees and regulates all gaming enterprises owned and operated by the Forest County Potawatomi Community, including the Potawatomi Hotel & Casino in Milwaukee, Wisconsin, and the Potawatomi Carter Casino Hotel in northern Wisconsin.
The Request for Information specifically calls on Ainsworth US to confirm the corporate structure of the company, including its relationship to AGT and Novomatic AG, and to “provide a current organizational chart identifying all parent, subsidiary and controlling entities including ownership percentages and identification of all persons or entities exercising direct or indirect control over Ainsworth US.”
The company is also directed to provide a clear statement explaining why it remains suitable to hold a vendor license, notwithstanding the criminal proceedings, investigations, and governance concerns.
The Commission has asked Ainsworth US to describe the nature and current status of criminal proceedings involving Novomatic AG and identify whether any implicated individuals exercise authority, control, or influence over US operations; to explain whether and how such proceedings do or do not impact impact the regulatory suitability of Ainsworth US; to provide a detailed description of corporate governance safeguards and internal controls ensuring operational independence of Ainsworth US from AGT and Novomatic; and to state whether Ainsworth US had any involvement, knowledge or connection to alleged undisclosed payments to AGT executives and to explain why such matters do not adversely impact US licensing suitability.
A complete list of all associated persons, including officers, directors, key employees, and any individuals from AGT or Novomatic exercising control or influence, has been requested.
According to the documentation, Ainsworth US has 30 days from receipt of the request, dated June 2, to submit its complete response.
“Failure to respond fully and timely may result in regulatory action, including potential suspension, conditioning, civil penalties, or revocation of the vendor license,” it states.
The suitability review, launched by the Licensing Division – Investigations Department, comes after Austria’s Public Prosecutor’s Office for Economic Affairs and Corruption (WKStA) in February filed bribery charges against a senior government official and two Novomatic executives, understood to be Novomatic owner Johann Graf and former Novomatic and AGT CEO Harald Neumann.
Neumann had by that time already stepped down from AGT in October after the Nevada Gaming Control Board opted not to renew his state gaming license.
The charges, which follow an investigation first launched in 2018, relate to allegations that Heinz-Christian Strache, in his capacity at the time as Vice-Chancellor and Federal Minister for Public Service and Sport, demanded the Novomatic executives appoint a candidate, Peter Sidlo, to the board of Casinos Austria AG not because of qualifications but due to the candidate’s political affiliation with Strache and the ruling party. In return, Strache is alleged to have agreed to the partisan award of gambling licenses to Casinos Austria. Novomatic held a 17.2% interest in Casinos Austria at the time.
Novomatic has described the demand for prosecution by the Senior Public Prosecutor’s Office Vienna and Federal Ministry of Justice as “not comprehensible” given WKStA had “intended to fully discontinue the last remaining allegation” until the demand was issued. Neither were additional interrogations conducted, nor were there any new pieces of evidence that would explain the contrary decision, the company said in a statement sent to CDC’s sister company, Inside Asian Gaming, at the time.
WKStA’s charges allege that Strache was prepared to allow himself to be influenced in his future activities as a public official in the interests of the Novomatic Group by introducing relevant government bills, exercising his voting rights accordingly in the Council of Ministers, and engaging in negotiations in the context of preparing general government policy.
Graf and Neumann, who had influence over Casinos Austria through nomination and voting rights, are alleged to have facilitated the arrangement and thereby granted an undue advantage under the Austrian Criminal Code with the intention of influencing Strache as a public official in his future activities in the interests of the Novomatic Group.
