Poland – Totalizator took the machines on itself

The plan that Wojskowe Zakłady Łączności No. 1 would become a giant in the production of one-armed bandits, failed. Totalizator Sportowy took over the unfinished project from them.

The amendment to the gambling act, granting Totalizator Sportowy (TS) a monopoly on slot machine games outside casinos, entered into force on April 1st, 2017. A month earlier, the gambling giant announced that the project as part of “strategic cooperation” with the state-owned Military Communication Plants No. 1 (WZŁ) will flood the country with as much as 35,000 one-armed bandits. 2,5 years have passed. In the end, the companies entered into a settlement before the court, based on which only 1.2 thousand machines produced by WZŁ. and the unfinished central system for their operation was taken over by TS.

We are pleased that we have positively settled this project for the benefit of both parties. Appetites have been greater, but competences have been built that can be used in the future, and this is valuable from a business point of view, comments Grzegorz Banecki, president of WZŁ.

Divergent versions

The head of the plant emphasizes that they have taken “an important step on the road to developing cooperation in new areas”. What cooperation and in what areas is not known. It is known, however, that TS is … to continue work initiated by WZŁ on its own.

Ultimately, we want to have our own central system that will increase operational stability, potential for modification depending on the needs and data security, as well as to be an integrator of machines used for our needs. In this way, we can reduce the cost of purchasing machines by about 20 percent, while maintaining full flexibility in the selection of games comments Aida Bella, spokeswoman for TS.

Representatives of the Polish Armaments Group, to which WZŁ belongs, unofficially assure that as a result of the agreement all the money invested in the project was recovered. According to PB information, WZŁ’s expenditure for this purpose reached about PLN 50 million.

The payment of such a high amount by TS seems unlikely, because the acquired machines are not certified and are incomplete (e.g. lack of games). In addition, TS had the right to charge contractual penalties for gigantic delays committed by WZŁ. Aida Bella does not disclose the amount the gambling giant paid to military establishments, citing the confidentiality of the agreement. However, it ensures that it includes contractual penalties and is “significantly lower” than PLN 50 million.

Withered branch

Regardless of the settlement amount, it is certain that the plans made by state-owned companies in 2017 did not work much. Radosław Śmigulski, then acting president of TS, said that “since we have to spend a billion PLN on machines, it is better not to buy equipment abroad, but to invest this money in Polish industry”. The CEO of WZŁ, which previously had absolutely nothing to do with gambling, even announced the creation of a “new industry branch”.

The failure of “strategic cooperation” meant that Totalizator, already under the leadership of the current president Olgierd Cieślik, began to feel the heat. Therefore, the company benefited from an “intervention purchase”, under which it purchased 600 machines from the German company Merkur Gaming with a system for their operation by the Canadian company Axes Network. Then they bought several hundred slot machines from three other companies: Promatic, Novomatic and EGT.

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