The Gauselmann Group is on track to match its pre-pandemic revenue as it deepens its international expansion and casino strategy
German video game giant Gauselmann Group announced on Thursday that it was on track to achieve sales revenue as high in 2022 as it did in the pre-pandemic 2019 fiscal year. The first six months of 2022 ended with revenue of 1.746 billion euros ($1.757 billion), showing an increase from the 1.740 billion euros ($1.751 billion) recorded in 2019 before the pandemic. The combined revenue of all group entities that year was approximately €3.4 billion ($3.42 billion).
Company founder and CEO Paul Gauselmann said: “It’s great news that the pandemic has bottomed out and that we are finally back in mapped territory. This success is above all the result of our good ideas and the dedication of each of our employees and once again demonstrates what can be accomplished through hard work and team spirit. »
During the pandemic, the group has seen its arcades, casinos, sports betting shops and on-board casinos across Europe – up to 1,000 outlets in total – close for around nine months., costing the company some 2 billion euros in lost revenue. Operating costs, however, remained largely unchanged during this period.
According to a company announcement, the positive post-pandemic development is also attributable to the growing diversification of the group. The group is working to position itself on an ever broader base, reduce its reliance on individual markets and business models.
The company explained that a return to pre-COVID levels was only possible because, with the development and expansion of international business operations and casinos, the company has tapped into two business areas that are compensating for the increasingly difficult situation in the German domestic market. The most important markets in other European countries are currently the UK and Spain.
“From a business perspective, it was extremely important to advance our international business activities,” explained the founder of the company, adding that in the meantime, a an increasingly large share of turnover – around 60% – is generated abroad.
In addition to internationalization, the company also attributed its commercial success to casinosincluding places of Saxony-Anhalt and the investments in Berlin and Rhineland-Palatinate. The casinos of North Rhine-Westphalia are also a significant addition to this business segment since 2021.
Company founder and Management Board Chairman Paul Gauselmann
The company saw casinos in Saxony-Anhalt as an area with “huge potential” based on the figures obtained, pointing out that in the second year of activity of the Gauselmann group, the number of visitors doubled several times.
In accordance with the legally defined channeling mandate, it was thus possible to “redirect more players from illegal offers to legal offers and protect many customers from the great risks” of illegal gambling. “I have never experienced such a percentage increase in any other sector until now,” Paul Gauselmann pointed out.
However, the company said the political conditions governing commercial games in Germany are a “bitter pill”. The increasing restrictions have not only led to a reduction of more than 30% of gaming machines, the closure of gaming halls, and therefore also to selective job losses, but have also reduced the attractiveness of the legal supply of games.
This, in turn, increases the attractiveness of illegal gambling offers – a context in which consumer protection and responsible gambling are “foreign concepts”. However, according to the patriarch of the company, the Gauselmann group nevertheless succeeded in defending its market leadership. “It is very rewarding, but also necessary to maintain our standards even in the most difficult conditions,” he said.
The positive development of the company in East Westphalia is also reflected in the “staff growth” factor. The number of employees increased by 10.7% in 2021, with the company now employing nearly 15,000 people worldwide.
“All of this allows the Gauselmann Group to look to the future with renewed confidence,” the company said. A source of hope for continuing to build on this successful record lies in particular in the field of online games in Germany, which is currently being developed on a legal basis under the new State Treaty on Gambling which entered into force on July 1, 2021and for which the first licenses were issued recently. However, this assumes that the State intervenes “to put an end to illegal online commerce as quickly as possible”.
According to the media, the new Joint Gambling Authority of the German Federal States has already started asking illegal providers to cease their activities. Failure to do so is subject to fines of up to 500,000 euros.
The experience of the British market has shown that land-based games and online games complement each other significantly rather than cannibalizing each other, indicates the company, provided that the legislator allows a sufficiently attractive offer of online games; an area where Germany has so far lagged considerably behind other counties.
“We will certainly make an active contribution with good ideas in the online segment”, promised Paul Gauselmann. “If we perform well and can rely on more reasonable framework conditions in the future, success will follow.”