The creation of a new American subsidiary, Novomatic Americas Sales, LLC, is one outward sign of Novomatic’s ever-increasing success across the Latin American continent but also marks a significant intention on the part of the Austrian gaming giant to achieve success across a whole swathe of North American jurisdictions.
The success of Novomatic across South America has been, in recent years, meteoric. With a number of subsidiary companies now firmly established and proving successful in the region (Mexico, Argentina, Peru and Colombia, for example) there is now a very good reason to establish a regional ‘hub’ to co-ordinate and enhance the various activities of that company network. It therefore should perhaps not have come as a major surprise when Jens Halle, Managing Director of Novomatic’s international subsidiary Austrian Gaming Industries GmbH (AGI), recently announced his decision to re-locate from Austria to a newly established regional base, in Fort Lauderdale, Florida.
Explaining the move Jens Halle commented: “What has been decided is that I will effectively ‘reverse’ the direction of what has been my travel schedule over the past few years. Since Novomatic opened up the Monticello Grand Casino and Entertainment World in San Francisco de Mostazal, close to Santiago in Chile, with Sun International and other partners, it has been necessary for me to virtually commute to Chile on a regular basis. Additionally, of course, we have our network of South American subsidiaries with which I need to keep in regular contact and help to support. Doing that from an Austrian starting point makes such travel a long and often exhausting process but, as many gaming industry companies have found, Florida is the natural gateway to the entire Latin American continent.”
But there is another dimension to Jens Halle’s trans-Atlantic move. That is an extended and re-energised focus by Novomatic on the region known throughout central and South America simply as ‘El Norte’: in other words, the US domestic market. The Novomatic brand has a huge attraction for US operators, an attraction that is demonstrated by a large volume of sales enquiries at major trade shows such as G2E. Satisfying those enquiries is not merely an aspiration for Novomatic it is a necessity, as Jens Halle explains: “Let me put this in an historical context. It is clear that the US market is a ‘must’ for the Novomatic brand. It is still, despite the growth explosion in Asia of recent years, the epicentre of the international gaming industry and, as an industry leader, Novomatic must be a force to be reckoned with there. Like other major manufacturers (think Aristocrat in Australia and, indeed, IGT in the US) Novomatic built the strong foundations of its business and its subsequent expansion on our original ‘home’ markets; in our case Europe and particularly Eastern Europe.
It is obvious that, to effectively penetrate the huge number, range and diversity of US markets an incoming manufacturer must be able to offer the quality of sales, support and service that operators have every right to expect. That means having a sustainable infrastructure in place from the very start. Then, of course, we must consider the licensing and product testing approvals process that, given that there are numerous States and Native American tribes that all have their own individual regulations, is a huge – but vital – requirement.”
That would tend to suggest a distribution strategy for Novomatic but Halle is quick to state that this is not the case. “The distribution route is, for us, too limiting. We are fortunate to have been building, over the past few years, an excellent relationship with the Fort Lauderdale, Florida, based US company, Reel Games Inc. We began that relationship to help and support business in the cruise ship industry and in the Caribbean islands. It proved successful and we started, some time ago, to discuss expansion in US markets. Since the beginning of this year we decided to upscale our co-operation with Reel Games to the point where they act not as a distributor but as a separate entity that is closely linked to Novomatic.”
The correct terminology for this agreement is ‘Reel Games in conjunction with Novomatic’ and what that means is that Reel Games have control of their own destiny; supported and assisted by Novomatic. Reel Games import products that are then assembled in Florida and sold, complete with Reel Games identification, in US jurisdictions where Reel Games have the relevant licenses and product approvals. Novomatic support Reel Games throughout the process (with the transfer of product approvals, for example, plus the necessary technical training and logistical assistance) and also give Reel Games research and development input in order to maximise the products’ attraction within the US market arena.
So far this year, Reel Games in conjunction with Novomatic has exhibited at three geographically diverse trade shows: NIGA in California, Southern Gaming Summit in Mississippi and, most recently, OIGA (the Oklahoma Indian Gaming Association’s annual trade show and conference) in Oklahoma City. Those three events have jointly proved the attraction that the Novomatic brand has for American operators. They have also served as an extended ‘dress rehearsal’ for G2E where Reel Games will, for the third consecutive year, be present in a big way on the main Novomatic booth.
So is it then just a coincidence that Jens Halle has relocated to Fort Lauderdale? That raises a huge smile from the AGI Managing Director. “In our business it is a wise move not to believe too much in coincidences! It is a question of the correct timing and the best way to address the opportunities that exist. Novomatic is creating a hub in Florida and that organisation will exist to support, as its name suggests, all of the Americas: North and South in an effective way. I have already described the added efficiency that will be added to our Latin American businesses and, regarding Reel Games and the US market, my being in Florida will create an ideal conduit to AGI in Austria and this, I’m sure, will help Reel Games to grow more quickly as they continue to build their business. For me and for the Novomatic brand, this is a win-win opportunity: one that we have moved quickly and decisively to maximise.”
That Novomatic should be prominently present in US markets has an undeniable logic. By building their brand through the expertise and existing contact base of Reel Games makes that logic even stronger. When the ability to support and assist the continent-wide network of Novomatic’s own companies throughout the Latin American region is added to the mix it is clear to see why Jens Halle – supported at the highest levels within Novomatic – states that this is a ‘win-win’ proposition. The move will hardly come as a culture shock to Halle (he was educated in America) and it will not change his position or global responsibilities within AGI. As he succinctly puts it: “Getting off a plane and going straight to work at the Novomatic headquarters in Gumpoldskirchen is nothing new for me. As a market leader, Novomatic’s business means that we must all be geographically adaptable. What I see in this change in circumstances is a huge opportunity, both personally and, of course, for the Novomatic brand. We will do it right and we will do it successfully. After all, I will simply be following our company’s slogan: ‘Novomatic Leads, Others Follow’!”