In the new coalition agreement between the centre-right People’s Party (ÖVP), Social Democrats (SPÖ) and the Liberal Party (NEOS), the three parties have signalled plans to retain the licensing status quo in Austria. The agreement was approved by all three parties on 2 March.
The coalition was formed in February after months of political uncertainty in the country. Parliamentary elections in September failed to establish a majority government. This was followed by months of talks between the parties, some of which quickly fell apart.
Government to continue single licence model
When the sole online casino licence – currently held by Austrian Lotteries – expires in 2027, the government’s coalition agreement suggests that just one new licence will be granted for the operation of online casinos for an additional 15-year period.
The parties also plan to implement a tougher crackdown on the country’s surging unlicensed operators.
In future, the government will take “decisive” action against illegal gambling through methods such as “internet blocking and payment blocking”, the coalition agreement states.
Austria’s sole online licensee currently runs the online gaming brand Win2Day. Its platform is operated by Austrian Lotteries and Casinos Austria, while the latter is also the monopoly operator of land-based casinos in the country.
Back in 2012, Austrian Lotteries won the first monopoly licence through a controversial tender process run by the Austrian finance ministry.
At the time, industry stakeholders criticised the view that the years of experience required in various verticals – online casino, lottery and slots – could only be fulfilled by a single operator.
Since the ministry also holds a 33.3% stake in Casinos Austria and Austrian Lotteries and is responsible for collecting gambling taxes as well as awarding licences, there have also been accusations of a conflict of interest.
This view is shared by gambling stakeholders across other European markets where the monopoly model is still prevalent, particularly in the Nordics.
New gambling authority to be formed
To avoid difficult questions this time around, the new coalition in Austria is planning to establish an independent gambling authority in this legislative period.
This could take over the role of the ministry of finance in the next tender process for online and land-based casino licences.
Although no set deadline has been established for setting up the new independent body, industry experts say the timeline is extremely tight due to several licences expiring in 2027.
“It’s more than evident that these licensing proceedings are going to be challenged at administrative courts as well as potentially at the Constitutional Court, so the final awarding of the online casino licence could take some time,” said Dr Arthur Stadler, founding partner at the Vienna-based law firm Stadler Völkel.
Many in the industry had been hopeful that Austria was heading towards an opening of the online gambling market as coalition talks between the ÖPV and right-wing populist Freedom Party (FPÖ) took place last month.
However, negotiations subsequently broke down amid disagreements over the control of certain ministries, dashing hopes of a major breakthrough. This forced the ÖVP back to the negotiating table with the centre-left SPÖ and liberal NEOS.
As an outcome of these coalition talks, the SPÖ is now set to take control of the ministry of finance. The party will therefore be primarily responsible for re-regulating and monitoring the Austrian gambling market until the establishment of the new authority.
Significant tax rises ahead
Amid disappointment over the restrictive online casino scheme, the industry is also facing tax hikes under the new administration.
Rather than the current 2% duty on betting revenues, Austria will – step by step – move to a 5% gambling revenue tax, putting it almost on par with neighbouring Germany.
According to Stadler, there are rumours that this staged increase in betting duty could be voted on in the Austrian parliament as early as this week.
The coalition parties also say they want to end fragmentation in the regulation and licensing of sports betting, which is currently done on a state-by-state basis.
In their coalition agreement, the government states that the current system of sports betting licensing will be “reviewed” to ensure “uniform supervisory and player protection standards across the board”.
However, this would require at least a two-thirds majority in the Austrian federal parliament as well as the agreement of the states, making it unlikely to pass.
In addition, the parties say they plan to re-regulate loot boxes, which could see the video games industry subject to more stringent, gambling-industry style restrictions. This could have wide-reaching implications for AML and the protection of minors.
Original article: https://igamingbusiness.com/legal-compliance/regulation/austria-government-coalition-continue-gambling-monopoly/
