Very few markets in Europe have been as resistant to change as Austria – but hopes of a major overhaul are growing within the industry. After months of political delay, proposals for gambling reforms are set to be imminently released by the Ministry of Finance – and stakeholders believe the signs are pointing to the end of the current iGaming monopoly in Austria.
At present, a single licence is available in Austria for lotteries and online gaming products. This 15-year permit is held by Austrian Lotteries’ brand win2day – a subsidiary of Casinos Austria, which also holds all 12 land-based casino licences. Austria’s state holding company, ÖBAG, in turn owns a 33% stake in Casinos Austria.
Rumours of reform have been swirling since Austria’s three-party coalition entered government back in March. In their February coalition pact, the centre-right People’s Party (ÖVP), liberals (NEOS) and centre-left Social Democrats (SPÖ) had cryptically promised a “further development” of the gambling monopoly, leaving the question of liberalisation on the table.
More recently, senior government officials have spoken out in favour of an open licensing scheme for online gambling. With the sole licence due to expire in 2027, the urgent question is whether the next tender process will be a fully open one.
According to Simon Priglinger-Simader, President of the Austrian Betting and Gaming Association (OVWG), clarity on this question could come “any day now”.
“It should only be a question of days until the draft is released, and then it will be all about the political negotiations,” he told iGaming Business. “But the signals we’ve received from all three parties have been positive when it comes to a licensing reform for online gambling.”
Political negotiations over iGaming reform in Austria
Though the industry is eagerly awaiting the Finance Ministry’s plans, they will only be the start of the process, kicking off talks between the SPÖ (who control the ministry), the ÖVP and the NEOS.
These talks should lay the groundwork for a new gambling bill to be drafted in February or March next year, with new regulations potentially in place by summer.
If the anticipated reform is announced, it will spell the end of a long and arduous fight against the single-licence system in Austria, which has regularly been placed under a microscope by the European Court of Justice (ECJ).
“I would say [we’re] much closer to online gambling reform than we’ve ever been in Austria – or at least in the past five or 10 years,” said Priglinger-Simader, “And for us as an industry, that’s a hugely positive sign.”
It is far from the first time that the question of ending the online monopoly has been on the agenda: a previous attempt by the former ÖVP and Green Party-led coalition was scuppered by the parties’ political differences. This time, however, the stars seem to be aligning in favour of an open online market.
Licensing deadlines and tender process
“By 2027, six of 12 of the existing 15-year national offline casino licences will expire, along with the single online gambling licence. The remaining six out of 12 licences for offline casinos will expire in 2030,” explained Arthur Stadler, an Austrian attorney who specialises in betting and gaming law.
With the tender process taking around two years, there is a race against time to draft a new framework for handing out the next set of licences – and potentially tap into a new income source for the government.
“Austria’s fiscal situation is deeply concerning,” Stadler added. “It is an open secret that new licensing fees and taxation models in the gambling sector, as so often in history, will be leveraged to help plug gaps in the national budget. Whether this creates an attractive consumer offering and channelisation is an entirely different story.”
Since entering government in March, the coalition has already introduced two significant tax hikes. Online gambling taxes soared from 40% to 45%, while betting duties were more than doubled from 2% to 5%.
If the market is opened, the OWVG will argue that these dizzyingly high tax rates could stand in the way of channelisation. Research carried out in Germany suggests that every percent of tax above 30% could equate to a 1% loss to black-market operators.
Unanswered questions in Austria
According to Stadler, Austria’s current dire channelisation rates may have also prompted the political rethink.
“Despite the fact that Austrian Lotteries is the sole legal provider of online gambling services, it has failed in its task of steering Austrian players towards legal gambling channels,” he said.
This places the monopoly on legally shaky ground, as the ECJ has ruled that monopolies in Europe must genuinely serve the public interest.
Still, it’s unclear what shape any future online gambling framework – if there is one – could take, and how many potential licences could be available for operators.
Speaking to the Austrian Press Agency (APA) this November, a ministry spokesperson explained that the number of licences available in the next tender would be part of the ongoing political discussions.
If the monopoly is lifted, it’s possible that licences could still remain capped at an arbitrary number. Here, however, Germany’s unsuccessful sports betting licence cap – which was scrapped in 2021 – could serve as a cautionary tale.
Another option is a cap through the back door, which would involve setting the standards and costs so high that only a few operators could realistically meet them. The third, much less complicated option, would be to offer unlimited licences.
Enhancing player protections
Whatever the next licensing scheme looks like, one thing is clear: the government will have to develop its player protection regulations almost from the ground up.
“All three parties will need to make sure that player protections are increased and improved in Austria because at the moment, we don’t have that much within the Gambling Act and very little oversight from the Ministry,” said OWVG President Priglinger-Simader.
In their February coalition pact, the three parties pledged to ramp up enforcement measures against the black market, introducing measures such as IP-blocking and payment blocking.
However, Stadler points out that these would require precise implementation to avoid falling afoul of EU rules.
Nevertheless, the gaming law expert believes Austria is in a unique position due to the long delay in regulating the online market.
“As one of the last countries to maintain an online gambling monopoly, Austria is very late to the show,” said Stadler. “However, this could potentially turn out to be an advantage, as the Austrian legislator has been able to observe developments in similar countries and draw conclusions on the most successful measures.
“There is no need – and no justification – for a trial-and-error-period in Austria.”
An independent gambling commission?
Alongside an expansion of the online licensing scheme, industry stakeholders will be scouring the draft plans for mentions of an independent gambling authority, ending the Ministry of Finance’s jurisdiction.
Though moves have been made to address any conflicts of interest – moving the stake in Casinos Austria from the Finance to Economics Ministry – operators are still yearning for neutral and independent oversight. However, as Stadler explains, “establishing such an authority would take a substantial amount of time”.
With time running out to issue tenders, the OWVG believes the new gambling authority will be put on the backburner until after new licences are issued – or even set up in parallel.
Even without a new gambling commission to worry about, however, time is still tight. If the tender process kicks off next summer as expected, it is unlikely to be completed by the autumn of 2027 – not least due to the likely barrage of legal challenges.
According to a recent report in Der Standard, the Finance Ministry is considering buying extra time by extending the current tenders by one year – pushing back reforms to 2028. This would take advantage of a provision laid out in the current Gambling Act, though it’s unlikely to be received well by operators or the European courts.
Though the wait could be longer than expected, however, there is one major consolation for the industry: after years of campaigning and legal scrutiny, one of Europe’s most intransigent online gaming markets could finally be on the brink of reform.
Austria’s gambling market has resisted change for years, but industry insiders say reform could be imminent.