Gauselmann experiences a loss.
The COVID-19 pandemic has placed immense strain on the gaming industry and has already led to job losses. Paul Gauselmann, owner of Merkur, has managed to weather the crisis so far without needing to lay off any employees, but the Espelkamp-based company is now experiencing its first loss in its long history. All 14,000 employees are currently on reduced hours. How will things continue to unfold?
Sales plunge by 30% in 2020
The continent-wide lockdowns have had a significant impact on the land-based gaming sector. Even Paul Gauselmann, the gaming machine mogul who managed through the crisis without any layoffs, is now facing mounting challenges. The family-run company from Espelkamp has seen its first loss in its 63-year history. Nearly 700 gaming arcades across Europe have shut down, and almost all 14,000 employees are on reduced hours.
Last week, a company representative confirmed that revenue in 2020 was down by a staggering 30% compared to the previous year. Not only the arcade business but also the production of slot machines is lagging. The financial strain is putting a huge dent in Gauselmann's reserves. In 2019, external sales amounted to €2.5 billion, while internal sales were as high as €3.4 billion.
Gauselmann conceded that the crisis was severe enough that red numbers could no longer be avoided for the first time. The €1.7 billion aid promised by the state for November and December was heavily restricted. The company had to fight hard to get appropriate aid. The situation remains unchanged.
In a statement, Harald Gauselmann (86), as Paul Gauselmann is often referred to, expressed his criticism of Germany's lockdown policy - the closures were indiscriminate and disproportionate. It was irresponsible that no consideration was given to the specifics of amusement arcades. There is ample space available in the facilities. Compliance with a minimum distance of two meters is ensured. Masks and hygiene regulations are also observed. However, political leaders continued to make sweeping decisions. Harald Gauselmann pointed out that there was no proper analysis of the facts.
Hoping for political wisdom
Shortly before the lockdown was extended beyond January 10th, Harald Gauselmann was still hoping for political wisdom and a reopening in February. However, the entertainment, culture, and gastronomy sectors are excluded from the easing of restrictions. According to Harald Gauselmann, however, enthusiasm for gambling would not wane under COVID-19, as the numbers after the first lockdown proved.
The German Gaming Machine Industry Association (DAW) also criticized the government's lockdown policy. The industry is bracing for a total shutdown. Current closures will likely affect all facets of the sector - manufacturers, distributors, and vending machine production. In many areas, reserves have been depleted.
The gaming machine sector, alone, suffered a 50% decline in 2020. This could have severe consequences for the 70,000 people working in the industry throughout Germany. The only way to preserve jobs is by increasing the adoption of reduced hours. However, the current pandemic is just one of the challenges facing the amusement arcade industry.
Potential impact on Westspiel sales
The crisis could also affect the sale of Westspiel, with Gauselmann considered to be one of the primary contenders for the North Rhine-Westphalia (NRW)-owned casinos in Aachen, Bad Oeynhausen, Dortmund (Hohensyburg), and Duisburg. Bids are likely to be significantly lower than before Corona, and the likelihood of finding a buyer for these closed operations is also decreasing.
According to the tender documents, NRW anticipates a loss of 20% to €81.4 million for Westspiel in 2020. This is expected to reduce the purchase price, currently standing at around €2.7 billion.
The new licensee must meet specific requirements: they must have been in the gaming hall business for at least three years and possess a minimum of €20 million in equity. In return, the purchaser can look forward to acquiring an additional license, authorizing the operation of up to six casinos. However, it is unlikely that a seasoned businessman like Gauselmann will acquire further closed establishments in the current situation.
Read also:
- The soccer champions have been decided already.
- Will Mesenhöler remain on the bench?
- Reichert holds the most promising prospects.
- The Zwickau professional endured a true insult.
Source: www.onlinecasinosdeutschland.com
