Austria weighs cooling-off period for grey-market operators
The finishing touches are being made to Austria’s long-awaited new gambling law. This week, negotiators from the three governing parties – the centre-right People’s Party (ÖVP), centre-left Social Democrats (SPÖ) and liberal NEOS – are scheduled to iron out the last details.
At the end of May, a leaked Ministry of Finance draft obtained by iGB revealed that the country’s online gambling monopoly would end after the expiry of the current licence in 2027. Since then, the three coalition parties have been finalising the details of the new regulation to open up the market.
The resulting bill will mark a sea-change for the Austrian gaming industry, ending one of Europe’s last remaining gambling monopolies. But as negotiators wrap up their talks this week, questions remain about who will be able to access the market – and when.
‘Cooling off’ phase for offshore operators
According to Austrian media reports and iGB sources, one of the battlegrounds currently being fought over is whether unlicensed operators active in the country should face a “cooling-off” period before receiving an Austrian licence.
This proposal, which is believed to be favoured by the SPÖ-led Ministry of Finance, would initially ban any companies that have been found to have broken Austrian gambling laws within the past five years from entering the market.
According to Felix Geyer, an Austrian public affairs consultant, the ban could potentially span between 24 and 36 months and would primarily affect EU licensees active in Austria. “The black market will not care,” he told iGB. “They won’t be applying for licences.”
This could deal a major blow to grey-market operators hoping for a chance to continue business in Austria under a local iGaming licence. However, there is reportedly disagreement within the SPÖ – and between negotiators – about the need to include the hiatus.
Monopolist supports Austria iGaming restrictions
Casinos Austria, the land-based casino monopolist whose Austrian Lotteries subsidiary holds the sole online gaming licence and who until recently was part-owned by the Ministry of Finance, has been a vocal proponent of a cooling-off phase.
“One day you’re operating illegally, and the next day you’re granted a licence – that’s absurd,” Patrick Minar, spokesperson for Casinos Austria, told the Krone newspaper. “An initial cooling-off phase of three to five years would be conceivable,” he added.
Novomatic subsidiary Admiral – a major land-based brand in Austria – is also in favour of a transition period.
“The operators of state-run gaming schemes have demonstrated responsible conduct for years,” Monika Racek, CEO of Admiral Casinos & Entertainment told Krone. “These operators must not be discriminated against by the legislator treating them in the same way as everyone else.”
‘Reform killer’
According to the Austrian Betting and Gaming Association (OWVG), however, delaying licences for grey-market operators would go against the government’s aims of strengthening the regulated market.
“A cooling-off period would be the reform killer,” said OWVG president Simon Priglinger-Simader. “The federal government wants to bring players into the regulated market, strengthen player protection and secure tax revenues.
“With cooling off, the opposite happens: tax-paying operators must leave, the black-market jumps in, existing revenues collapse and already budgeted additional revenues fail to materialise.”
Player claims lawyers have also raised concerns that the move could hinder companies from settling court rulings in favour of players. According to the draft law leaked in May, paying any player claims and unpaid taxes from previous years would be a prerequisite for operators looking to enter the market.
Land-based licences, lotteries and stake limits
According to Geyer, a proposal for a maximum stake of €2 and maximum winnings of €2,000 per game has also become a sticking point in negotiations.
“Virtually everyone in the industry – including land-based operators, the monopoly holder and the OWVG – agrees that cutting the maximum stake from €10 to €2 would probably ruin the regulated online industry,” he said. “As I understand it, there had initially been agreement on this point, but the Social Democrats have been insisting on the €2 limit on player protection grounds.”
Another key unknown is whether 12 or 15 licences for land-based casinos will be offered. The initial draft from the Finance Ministry mentioned ‘up to 12’ concessions, potentially grouped into licence “packages”, but the ÖVP and NEOS are reportedly keen to increase this number.
In addition, the NEOS are believed to be in favour of a dramatic increase in the lottery licence fee. Unlike online gaming, lotteries will remain a monopoly in the next licence tender. Hopeful licence-holders will likely be asked to stump up a €20 million licence fee. However, the liberals would reportedly like to see this doubled to €40 million.
Austria iGaming law expected by summer recess
Amid all the unknowns, one increasing certainty seems to be the timeline. The government is planning to finalise the draft in time for the last plenary sitting in parliament before the summer recess in July.
This will mean the three-month EU notification process could happen over summer, with the law entering into force in autumn. This could mark the start of the tender process for the new online licences, ahead of the expiry of the 15-year single licence at the end of next year.