Gambling technology group Novomatic revealed it has put plans for an initial public offering (IPO) on hold due to uncertainty over new regulation in the German market.
The Austrian giant had been scheduled this week to publish its intention to trade on the Frankfurt stock exchanges; however, these plans will not be pursued at present.
This news follows after the German government issued stricter regulations for the gaming industry. Under the new rules, gambling halls must be at least 100 to 500 meters apart from each other and each one will only be allowed to hold one licence, hosting up to 12 gaming machines.
These changes will profoundly affect Novomatic: it is currently the largest operator in Germany, with a market share of 53%.
Speaking to the news agency Reuters, a person close to the matter said: “The implementation of the new German regulation is filtering through more slowly than expected and it is difficult for investors to fully assess the effect on Novomatic’s business.”
“It was effectively a profit warning,” another person added referring to a more bearish view that the company took on its expected earnings.