Austrian gaming-technology company Novomatic told Nevada regulators this week that criminal investigations against the company that date back to 2019 are winding down favorably. They also outlined Novomatic’s pending acquisition of Ainsworth Game Technology.
The issues came up Wednesday before the Nevada Gaming Control Board when it recommended Stefan Krenn as suitable as a member of the Novomatic executive board. The recommendation for approval now goes to the Nevada Gaming Commission.
The Board brought up a bribery investigation in Austria that involved former CEO Harald Neumann and owner Johann Graf, centering on allegations that the company sought favorable treatment through its board appointments.
Neumann left Novomatic and in September 2021 assumed the role as the CEO of Ainsworth Game Technology. Novomatic made a deal in April to acquire the outstanding shares in AGT after already holding 53%.
Neumann has denied the allegations. AGT told the media that it expects the one remaining investigation to be dismissed.
Novomatic legal counsel Michael Rohregger, representing the company in the ongoing criminal investigation in Austria, told the Board that four to five matters were investigated and all but one involving Novomatic were dismissed. The one case involves the CFO of Casinos Austria, who was appointed with the help of Neumann when he was a member of the supervisory board at Casinos Austria in addition to Novomatic. The allegation centered around suspected support of Novomatic in gaming licenses or adapting the law in favor of Novomatic, he said.
“That investigation is ongoing, but I can report that the public prosecutor proposed to discontinue it,” Rohregger said. “It’s not decided yet, but there are indications that it might also be closed. Maybe it’s already been done. If not, it could happen anytime. Close to the end of the year would be a plausible time frame.”
Rohregger maintains the company did nothing wrong and investigations have shown that to be the case. Nevertheless, he said there’s always a chance to improve and mark up compliance rules.
Krenn talked about Novomatic being the majority stakeholder in AGT since 2018. The transaction was driven by the Australian company as part of what’s called a “scheme arrangement.”
“If the scheme goes through, the minority stakeholders have to vote whether they agree or not,” Krenn said. He
expects the deal will be cleared by Australian regulators in the next two weeks. That will be followed by a meeting with the minority shareholders who will vote, and they should know by the end of August whether it goes through.
Krenn was asked by the Board whether AGT and Novomatic will remain separate operators in the U.S. or be merged as one.
Krenn said a decision has to be made when the arrangement goes through. The deal will enable a larger footprint in the U.S., where Ainsworth is well positioned, he said.
“On the other hand, we see a lot of mutual benefit because we can help Ainsworth’s European markets to grow,” Krenn said. “We think through Ainsworth we can also develop products and systems in the States and Australia. If the scheme goes through, we hope to accelerate this process, and we can be faster in this synergy and potential in business.”
