Tipico takes over Admiral Austria from Novomatic

The announcement by the Austrian gaming giant Novomatic that it is selling its local sports betting division is causing quite a stir in the industry. The deal had been on the cards for some time, but not everyone believed that Tipico would actually buy ATLAS Group GmbH, the parent company of the ADMIRAL Group in Austria.

Suddenly there is a huge question mark: Why is the Austrian gaming giant giving up its home market? Especially when it comes to a leisure activity that is so popular with Austrians that it generates a whopping 3.8 billion euros in sales every year: We already looked at this in our article “Austria: Sports betting is a game of skill and therefore largely unregulated”.

Of course, Tipico will have dug deep into its pockets for this deal. The “sum” – which Novomatic politely remains silent about – was apparently so tempting that the group was ready to throw in the towel. But not everyone thinks this step is a smart one, especially since, according to Statista figures, sports betting ranks third among Austrian gambling preferences after the lottery and online gaming. However, as Novomatic announced in the relevant press release, the sale is part of a larger strategy:

“The Novomatic AG Group is reinforcing this step with a stronger focus on its international business orientation as the global innovation leader in the industry.”

The contract has been signed, but the authorities’ approvals are still pending. It is also unclear whether all Admiral branches and their names will remain. There is no more detailed information. We want to take a closer look at the matter.

Why is Novomatic giving up Admiral in Austria?

We have no insider information, but the matter seems so interesting that it is worth researching it further. Because it sounds almost too strange to be true: Why would a giant like Novomatic simply give up its home market – in a country that generates billions in sports betting every year? A closer look shows that there is more to this decision than a generous check from Tipico. A lot of money is also likely to have been involved in the deal between Tipico and the DFB.

This should be made clear again here: the takeover of Tipico only relates to the stationary betting shops. The sale of the Admiral gaming halls, which are mainly found in southern Germany, is not up for debate. And the online business surrounding AdmiralBet will also remain with the group. By the way, we recently asked ourselves whether it is possible to open an online casino yourself.

Austria: Small market, big trouble?

As the Kronen Zeitung reported, Johann Graf, founder and owner of Novomatic, made it clear years ago that business in Austria was more of a burden for him. The Austrian market, Graf said at the time, was almost insignificant in terms of sales, but caused a disproportionate amount of trouble.

Tax burdens, bureaucratic hurdles and, not least, scandals – for example, about the filling of positions at Casinos Austria, of which Novomatic was once a co-owner – caused plenty of negative headlines. The allegations of collusion with the government in connection with this personnel policy were a further dampener for the domestic market.

Tipico: The industry leader takes over

Tipico, on the other hand, is well positioned with over 1,000 betting shops in Germany and Austria to profit from the stationary sports betting business. In comparison, the approximately 200 Admiral locations almost seem like a niche offering.

While Tipico is fully focused on sports betting, Novomatic has been more firmly rooted in other areas for decades – and that makes the difference.

No new strategy: Sports betting withdraws from Germany as early as 2020

The exit from Austria fits into a larger pattern: Admiral said goodbye to the stationary betting business in Germany as early as 2020. The corona pandemic brought a final end to it.

As the company announced in a press release at the time, all 17 German locations were permanently closed because the business was simply no longer worthwhile. It was already clear at this point that stationary betting shops were not and are not a focus for Novomatic.

A global player with other key businesses

Novomatic is an industry giant, especially in the casino and classic gambling sector. With over 25,000 employees, locations in around 50 countries and exports to more than 120 countries, the focus is clearly on technologies such as gaming terminals, lottery systems and innovative casino solutions: This is also underlined in the group’s current press release.

The Admiral Group was only a small part of the puzzle in this huge portfolio. As we already discussed in our article about Novomatic’s rise to become Austria’s second most valuable company, the group’s market value is an impressive 3.745 billion euros – a large part of which is unlikely to be attributable to sports betting.

An unattractive market?

Regulation in Austria probably also plays a role. Each federal state sets its own rules for betting establishments – and although sports betting is not officially considered gambling, the bureaucratic effort remains high.

Approval procedures, different regulations and high taxes make the business complicated. Tipico, whose business model is based on sports betting and stationary establishments, can probably operate more efficiently here than Novomatic.

By the way: Tipico is no longer a pure “German bookie”!

When you think of Tipico, the first thing that probably comes to mind is the typical German betting provider – perhaps even with the advertising face of Oliver Kahn. But there is much more behind the brand: Tipico has set up camp beyond the German-speaking area and developed into a global player that is active in numerous countries. The company still sees Germany as its core market. Founded in Karlsruhe in 2004, the headquarters are now in San Ġiljan, Malta.

It also has branches in Austria, Gibraltar, Croatia, Colombia and – yes, actually – in the United States. Internationally, the company has been on the rise, particularly in the USA, for a few years now. With a license in New Jersey, one of the largest sports betting markets in the United States, Tipico is a major player in the American betting landscape. In Brazil, however, where many top brands are currently fighting for the top spots in the billion-dollar regulated sports betting market, Tipico is not at the forefront.

The sale of Admiral to Tipico seems strange at first, but is probably a logical step for Novomatic. A market that generates little revenue compared to other business areas, but causes high costs and a lot of effort, does not fit into the group’s global growth strategy. Tipico, on the other hand, is strengthening its position in German-speaking countries with the takeover and is further expanding its network. The deal appears to be a win-win for both sides – at least on paper. Whether this will remain the case for Admiral customers remains to be seen.