Disruptor eyeing Austria’s land-based opportunity warns casino tender may favour incumbent
For the past five years, former Casinos Austria executive Niklas Sattler has been working on a bid to disrupt Austria’s calcified land-based casino sector.
Through his company, Alea Trust, he has been gathering top casino executives and industry experts, assembling a formidable fantasy football team of casino management. His aim is to take on the long-standing giant of Austrian gaming – his former employer, Casinos Austria – competing in the next tender for the land-based casino licences.
“This old-school image of the industry – I don’t like that,” Sattler tells iGB. “So I said, let’s refresh the industry and let’s jump inside the tender. Let’s do it ourselves.”
Since 2021, Sattler has convinced at least 40 former managers from Casinos Austria and other international casino brands to join him. Collectively, they have been laying the groundwork for a bid they hope will turn the land-based sector on its head.
“Casinos Austria has a track record as a company, but they’ve lost a lot of expertise over the years,” he says. “Our idea was to find the top experts in AML, responsible gambling, finance and casino operations and build a team that could compete at the very highest level.”
With Austria preparing its first major casino tender in years, Sattler is hopeful that the time could be right to give the greying industry a fresh, more socially forward-looking image. However, whether he will take the plunge and enter the fray remains an open question.
According to the Alea Trust founder, it all depends on how the proposed 13 casino licences will be structured and packaged. Will the market truly be open to new entrants, or will the current monopolist be heavily favoured in the process?
13 licences – but how many packages?
For several decades, Casinos Austria (CASAG) has towered over Austria’s casino industry. It is currently the sole operator of the country’s two packages of 15-year licences: six in urban centres (the Stadtpaket) and six in tourist hotspots (the Landpaket).
In a draft bill published in June, Austria’s coalition government set out its plans for sweeping gambling reforms. Among the headline changes was the opening of the online gaming market, ending the current monopoly.
Amid this earthquake, the questions hanging over land-based gaming barely caused a rumble. The Finance Ministry’s bill quietly set out plans for 13 casino licences, rather than the 12 currently operating. These 13 licences could be split into “objectively justified” packages.
The Finance Ministry tells iGB that location decisions would be based on an objective study taking into account population coverage, tourism potential, socioeconomic and demographic conditions and casino catchment areas. Any packages would also have to balance commercial viability and value while minimising competition to protect players and discourage aggressive marketing, it said.
“Applications are, of course, open to all market participants,” the ministry adds.
In Sattler’s view, offering individual concessions would be the fairest way to open the market. “Our idea is: let’s make 13 single licences,” he says. “That means you could apply for just one.”
However, he notes that Casinos Austria has been publicly calling for the retention of the packages. Instead of two packages of six, he predicts that one package of six and one of seven could later be up for tender. This would allow a second giant, such as Merkur, to enter the market, but would effectively shut out smaller players.
“We believe it’s quite unfair,” Sattler adds.
‘Cherry-picking’ in Austria land-based tender
For its part, Casinos Austria has advocated for the retention of the package system.
Speaking to iGB, the operator argued that packages were needed to ensure the broadest possible coverage of casinos, while considering economic conditions and tourism potential as well. A limited number of packages would also reduce competitive pressure that could otherwise encourage aggressive marketing and excessive gambling, it said.
“Only a carefully designed package solution can guarantee all of this,” Casinos Austria spokesperson Patrick Minar tells iGB. “Individual tenders would produce the opposite effect and encourage ‘cherry-picking’.”
A ‘stronger legal basis’ for packages
It remains unclear which route the government will ultimately take when it begins the next casino tender. But the fact that packages are now mentioned in the law may point to the direction of travel.
“The new provision provides a stronger legal basis than the previous regime because it expressly authorises the packaging of licences and specifies the factors the authority must consider,” explains Nicole Daniel, litigation & regulatory partner at the DLA Piper law firm in Vienna. “However, the fact that package formation is now regulated by statute does not eliminate the risk of favouring the incumbent.”
Depending on how the criteria are applied, “geographical diversity” and “economic potential” could become unnecessary burdens for new entrants.
“If, for example, you combine a highly profitable casino with a less attractive casino in a completely different part of Austria, that requires bidders to operate a more nationwide portfolio than they may have wanted,” she says. “That can place new entrants at a competitive disadvantage.”
Future Austria gambling authority ‘must be meticulous’
Arthur Stadler, a Vienna-based gaming lawyer and founder of Stadler Partner, says that although the direction is clear, the authority now has to deliver a meticulous, rigorously diligent tender.
“This won’t just be the blueprint for future tenders under the forthcoming new Austrian Gambling Authority,” he notes. “It also has to avoid repeating the embarrassing mistakes of the past.”
Still, he cautions that the draft law’s wording leaves considerable room for interpretation, not least when it comes to how licences are packaged.
While any decision must be “objectively justified”, Austria’s track record with casino tenders shows just how messy those “objective criteria” can get – and how easily they become a target for unsuccessful applicants looking to challenge the outcome.
“If I may make a bet for the future,” Stadler adds, “I’d bet the upcoming casino tenders get challenged from multiple sides and end up back at the Constitutional Court.”
Finance Ministry’s role as a shareholder questioned
Looking at the history of Austrian gaming, this prediction is not unfounded.
In the years following the revision of Austria’s gambling law in 2010, the Finance Ministry conducted a series of tenders. Although the legislation did not prescribe a package system, the ministry grouped the 12 existing casino licences into two sets of six: the Stadtpaket and Landpaket. Three newly created concessions were offered individually.
Casinos Austria retained both packages, while the three additional licences were awarded to Plaza 3 and Novomatic subsidiary Admiral. Those individual awards were subsequently annulled by the Federal Administrative Court, a decision upheld by Austria’s Supreme Administrative Court in 2016.
The court found that the assessment criteria and their weighting had not been disclosed to applicants before they prepared their bids, breaching requirements of transparency and equal treatment. It ruled that a new procedure was required, but the ministry never launched one, leaving the three additional concessions unawarded.
At the time, a state holding company owned a 33.2% stake in CASAG. Critics have since raised questions about the Finance Ministry’s dual role as concession-granting authority and shareholder.
Competition pushed back
This time around, the structure of the eventual tender is not the only potential obstacle facing new entrants. The draft also states that the six concessions for urban casinos, currently due to expire at the end of 2027, will be extended until 31 December 2028.
Following this year-long extension, the draft leaves room to push the deadline back even further. A new clause stipulates that an additional extension of “up to 24 months” is possible. This could apply due to pending legal proceedings or if no replacement has been found ahead of the licence expiry.
Casinos Austria argues that provisions allowing temporary continuation are not “fundamentally new”. Minar notes that the existing framework already contained a clause that allowed for extensions if a tender took longer than planned.
For legal expert Daniel, however, the one-year extension “appears to be more easily defensible” than the second, potentially longer delay. “In practice, that can extend incumbent operations until the end of 2030 without a fresh tender procedure,” she says. “I expect future legal challenges will focus primarily on the continuation mechanism rather than the one-year statutory extension.”
Giving back to the community
A third-generation casino professional, Sattler is hardly an industry outsider. Nevertheless, he believes that the regeneration of land-based gaming in Austria is long overdue. With the country becoming more diverse, he says casinos should reflect the values of the society around them.
“Our vision is much more about giving something back to players and to the community,” he says. “We take revenues, yes, obviously, but we have to do something for the regional community – investments or sponsorships – and work in the proper balance.”
The central question is whether more or less competition creates a more socially responsible structure. Casinos Austria says less competitive pressure encourages higher standards, while Sattler says more operators are better at keeping each other in check.
Ultimately, however, he also wants to see a new generation of operators being given a chance. “They are preparing a tender for operators that are not really competitive, and it will stay like this for the next 15 years,” he says. “Why shouldn’t young people have a chance as well?”
Uncertainty over the Austrian tender
Meanwhile, Austria’s gambling reform bill is quietly moving through the political process. The consultation period finished on 15 July and the mandatory three-month EU notification period lies ahead. Stadler believes comments from Malta could extend the process from three months to four, but believes the government’s timeline can still be met.
That means the legislation could be passed by the end of the year, with the concession process beginning in early 2027. Even at this late stage, however, potential bidders are still largely left in the dark about how it will work.
“The draft introduces detailed procedural rules, but it does not regulate the substantive evaluation methodology,” says Daniel. “The scoring method and weighting of the criteria are expected to be set out in tender documents that we haven’t seen yet.”
With this crucial puzzle piece still missing, Daniel believes the design of the methodology could become the “central legal issue” in this process. This will include the weighting of the points for the concessions, which caused significant controversy in the previous tender.
For Sattler, this question will also determine the fate of his Alea Trust project. “We’re only going to enter the tender if the criteria are fair and safe and abide by European Union standards,” he says. “If it’s fair then we go inside, if not, not.”
However, abandoning hopes built over half a decade won’t be easy. “It’s a chance missed for the next 15 years,” he laments. “And my dream of the last five years would be smashed entirely.”