NRW finance minister defends WestSpiel accounting practices
Nordrhein-Westfalen (North Rhine-Westphalia/NRW) Minister of Finance Lutz Lienenkämper has responded to accusations that the state government altered the accounts of state-owned operator Westdeutsche Spielbanken (WestSpiel) to facilitate the privatisation of the business.
The NRW Social Democratic Party (SPD) party alleges that the government lowered WestSpiel’s profits by €9m, using “suspicious balance sheet tricks” to help facilitate the sale and requested a special session of the state parliament to discuss this. It has also claimed that these changes may have been intended to make the deal favourable to the Gauselmann Group, a gaming industry giant that is headquartered in the state.
SPD members Stefan Zimkeit and Michael Hübner submitted a list of eight questions on the matter to Lienenkämper during the session.
The lawmakers opened their questioning by querying why efforts had apparently been made to make WestSpiel look as if it was underperforming. Lienenkämper, however, said the question was based on a false premise, arguing the government had been transparent about WestSpiel’s accounts.
“The government continuously and transparently informed the state parliament about the economic situation of WestSpiel,” he responded. “ As in previous years, the consolidated financial statements will be sent to the state parliament after approval by the corporate bodies.”
Lienenkämper went on to explain that much of the decline in profits came because WestSpiel donated 52 pieces of art to the state-owned banking group (and the operator's parent company) NRW.Bank, in order to keep this art accessible to the public. NRW.bank then loaned the pieces to the NRW Foundation for Arts and Culture at no cost.
In addition, Lienenkämper said some of the profit decline was due to accounting changes, which saw pension obligations recorded as debts.
“This protects the legitimate interests of the employees,” Lienenkämper explained. “The reduction in profit […] is the result of the company's internal changes in favour of the employees.”
The minister addedthat the government does not yet know who will bid to operate WestSpiel, but that the privatisation process will be a fully “transparent and non-discriminatory”.
The privatisation of WestSpiel – currently owned by state bank NRW.Bank – has been in motion since 2018, but legislation to facilitate the deal only passed the state Parliament in June this year.
While WestSpiel hasn’t announced its 2019 figures to the public in full, it said in its 2019 sustainability report that it made €136.8m in gross gaming revenue in 2019, up 27.0% year-on-year. WestSpiel paid €65.8m in taxes for the year, up 30.6%.
WestSpiel currently operates six casinos, including four in Nordrhein-Westfalen, in Aachen, Bad Oeynhausen and Dortmund, with the final venue, Casino Duisburg, operating via a subsidiary. It also operates two casinos in the Free Hanseatic City of Bremen. Two additional venues may be constructed once the business is privatised.