State gambling monopoly was introduces in Moldova over a year ago. Now, authorities have chosen private partners for gambling business operations, Austrian company Novomatic AG will be a partner in the field of slot machines, and the Bulgarian National Lottery AD will be the partner of the state in the bookmaking and lotteries.
NM sources say that the terms of the competition were originally “sharpened” for these companies, and note that the terms of contracts with them have not yet been made public. The authorities and the companies do not comment on the situation yet.
The Public Property Agency reported that it had selected two private partners for the state enterprise Loteria Nationala Moldovei, which received the monopoly right to organize gambling. The partner in the field of slot machines was the association of operators Novo Gaming M Technologies GmbH, Novomatic Gaming Industries GmbH and Novomatic AG (part of the Austrian group of companies Novomatic AG), and in the field of lottery and sports betting, the association New Games AD, National Lottery AD and NGM SPC Limited. The agreements with these companies, as the Agency reported, were concluded in April this year.
According to the Agency, Novomatic AG was founded in 1980, now its annual turnover is € 2.3 billion, the company operates in 70 countries, its staff is 25 thousand employees. In the first three years, the company plans to invest in business in Moldova € 32 million, and then increase this amount to € 70 million.
The Bulgarian National Lottery AD, as the Agency notes, is the largest player in the gambling market in Bulgaria. Its annual turnover in recent years has reached € 650 million. In Moldova, the company plans to open 1,500 points of sale of lottery tickets and invest € 6 million in this business with a possible increase in investments for five years to € 40 million. The company forecasts sales growth in the second and third years by 150%, and in the fourth year by 50%.
Mold-street (a local news website), meanwhile, the winners of the second partnership – the organization of lotteries and bookmakers – includes the Dubai company NGM SPC Limited, which owns in Moldova the company NGM Company SRL. The director of the latter is a Bulgarian Plamen Milanov, who has interests in the Moldovan medicine market. And the National Lottery AD, according to the publication, is related to a Bulgarian businessman Vasil Bozhkov. As previously reported by the portal occrp.org, Bozhkov, nicknamed “Skull”, according to American diplomats, is involved in several types of criminal activities, including money laundering, illegal privatization, extortion, racketeering, he is also closely associated with criminal groups.
As reported by the Public Property Agency, Euro Games Tehnology and two other individuals (Sorin Timofey and Bogdan Moisets) applied for the participation in the competition in the field of slot machines. Sorin Timofey and Bogdan Moisets also applied for partnership in the field of organizing lotteries and bookmakers.
On what terms.
The source of NM, who is well acquainted with the sphere of gambling, is sure that initially the conditions of the competition were “sharpened” for the companies-winners. “The two individuals who participated in the contest have never had anything to do with gambling [they were needed to create the appearance of competition]. Even Euro Games Tehnology had no chance to meet the condition of annual turnover. In addition, the contracts have been signed, but their terms have not been promulgated (it is unclear whether the state will have any expenses).
According to the terms of public-private partnership, which the authorities developed last August, the state enterprise Loteria Nationala Moldovei will receive 75% of the revenue from lotteries, 90% from sports betting and 51% from slot machines. But it is unknown whether these conditions are preserved in agreements signed with the new private partners. At the same time, in August 2017, the authorities calculated that annually the budget will receive € 9.5 million from the “gambling partnership”.
From monopoly to partnership
It is worth reminding that in the summer of 2016 leader of the Democratic Party Vladimir Plahotniuc declared war against gambling. About 300 gambling establishments were closed in Moldova in autumn of 2016 just in few days: all gambling halls, bookmakers offices and casinos. Licenses have been suspended.
At the same time, the Democrats drafted a bill on gambling, according to which Loteria Nationala Moldovei became the state monopolist in all types of gambling, except for “live” casinos (with gaming tables and roulettes). The bill was adopted almost immediately: less than two weeks passed from its registration in parliament to adoption in two readings. After its entry into force, several casinos in Chisinau resumed their work. And the deputy from the Democratic Party Sergey Syrbu, who promoted this bill, then assured that public-private partnership in this sphere is impossible.
Six months later, the authorities announced that they would search for a private company for public-private partnership in the gambling business. Requirements for the partners in the field of lotteries there included the following: owing a similar business in another country, at least three years of experience in operation and an annual turnover of at least € 500 million for the last three years. A gaming machine partner should have had three years of experience, not less than 5 thousand slot machines in “different European countries” and a turnover of at least € 500 million. In addition, the private partner was supposed to be a manufacturer of slot machines as well.