Gambling Authority of Lower Saxony Obtains Temporary License after Facing Criticism Over Bidding Process
The Niedersachsen Casinos Corporation (NSC) has been granted a temporary operating permit by the Lower Saxony Government. The corporation's permit is set to expire at the end of August, and a new operator was set to take over. However, the tender process that saw the Merkur Group (formerly Gauselmann Group) emerge victorious in November has come under scrutiny.
Examination of the Tender Process
The Lower Saxony Government made an official announcement on June 12, stating that the Niedersachsen Casinos Corporation has been granted a temporary permit to operate its ten casinos within Lower Saxony. Although the casino permit typically expires on August 31, the corporation is authorized to continue running its casinos in Lower Saxony for a maximum period of one year.
The temporary permit was granted in light of the ongoing investigation into the tender process. This investigation was conducted by the Lower Saxony Government in November 2023, with the Merkur Group emerging as the victor. Criticisms about the tender have been surfacing since April this year.
CDU members from the Lower Saxony state legislature have requested access to the records and have called for the entire selection process to be made public. A member of the Niedersachsen Casinos Corporation's works council even publicly questioned the fairness of the award.
Due to the decision of the Lower Saxony Government, the Niedersachsen Casinos Corporation is allowed to continue operating its existing venues until a decision is made in the case. The Lower Saxony Government justifies the issuance of the temporary permit on the grounds that the Niedersachsen Casinos Corporation can guarantee uninterrupted operations.
Merkur Group's Advancement Hinges in the Balance?
Following its victory in the tender process in November 2023, the Merkur Group appeared on the cusp of a major achievement. The gambling company currently manages 15 casino locations in Berlin, North Rhine-Westphalia, Rhineland-Palatinate, and Saxony-Anhalt. Expansion into Lower Saxony would have represented another significant accomplishment for the group.
Founder Paul Gauselmann expressed his delight over winning the tender process and spoke of an important landmark. However, this triumph could now be under threat: Following the public criticism of the tender process and the temporary permit granted to the Niedersachsen Casinos Corporation, the commencement of operations on September 1, 2024, seems increasingly distant.
Over 400 Employees Retain Their Positions for Now
The decision to grant a temporary permit was made by the gaming authority within the Ministry of Finance. Gerald Heere, the Finance Minister of Lower Saxony, stated:
It's good and in the best interest of the over 400 employees of the casinos that we now have clarity regarding the continuation of gaming operations beyond August 31. Nonetheless, both the current and future license holders should continue discussing the possibility of a smooth transition to also achieve a legally secure solution in the long term.– Gerald Heere, Finance Minister of Lower Saxony, Ministry of Finance, Lower Saxony
The Ministry of Finance took into account the over 400 employees of the Niedersachsen Casinos Corporation in its deliberations. It was already known a few months ago that the employees would need to apply to the Merkur Group to retain their positions.
A date for the conclusion of the investigation has yet to be announced. Given that the temporary permit is valid for only one year, a speedy resolution seems likely.
The investigation into the tender process for online casinos in Germany, which led to the Merkur Group's victory, has been causing controversy since April. Despite the temporary operating permit granted to the Niedersachsen Casinos Corporation in Lower Saxony, allowing them to continue operating their online casinos for a year, questions about the fairness of the selection process persist.
Meanwhile, the future of Merkur Group's expansion into Lower Saxony's online casino market remains uncertain due to the scrutiny of the tender process and the temporary permit issued to the Niedersachsen Casinos Corporation.
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