NRW must reclaim 64 million from WestSpiel

North Rhine-Westphalia has paid Westdeutsche Spielbanken GmbH & Co. KG (WestSpiel) state aid totalling more than 64 million euros in recent years. The EU Commission has now come to the conclusion that the payments made by the state to the then state-owned gambling operator were illegal. NRW must now reclaim the aid money from WestSpiel.

After a year-long investigation by the EU, those responsible have now come to the conclusion that North Rhine-Westphalia must reclaim the state aid from WestSpiel in full. At the time, WestSpiel was still a state-owned gambling company. It is now a private operator. According to the EU Commission's findings, the millions paid out do not comply with EU state aid rules. In mid-2020, we at GambleJoe reported that the WestSpiel casinos had published their player protection activity report.

WestSpiel generated high losses in the millions - state-owned bank helped

Between 2009 and 2015, WestSpiel reported high losses in the millions on its own balance sheet. For this reason, the state-owned NRW.BANK provided support with a financial injection totalling EUR 63.6 million (annual loss coverage). In addition, the state-owned bank transferred a further EUR 65 million in 2015.

Following an investigation lasting several years, the EU Commission has now come to the conclusion that the annual loss coverage of WestSpiel by NRW.BANK does not constitute state aid pursuant to Article 107 (1) TFEU. In this case, the Bank had acted in an economically reasonable and therefore correct manner at the time.

However, the EU Commission takes a different view of the additional capital injection totalling almost EUR 65 million. This constitutes unauthorised aid, meaning that WestSpiel must repay this amount in full. The second capital injection in 2015 provided WestSpiel with an economic advantage.

NRW must reclaim around 65 million euros from WestSpiel

Ultimately, the EU Commission is now calling on the state of North Rhine-Westphalia to reclaim the unauthorised aid of around 65 million euros plus interest from WestSpiel. The problem: WestSpiel is no longer a state-owned gambling operator. WestSpiel was sold to the Gauselmann Group, now known as the Merkur Group, back in 2021. At the end of October this year, we asked ourselves what we can expect from the new Merkur CEO Lars Felderhoff. The Merkur Group has not yet officially commented on the matter.

The EU Commission emphasises that the recovery of the unauthorised aid is not a punishment of WestSpiel. It is merely reclaiming the money that was paid out unlawfully in order to ensure equal treatment with other companies.

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