Similar to many other countries around the world, the gambling ecosystem in Austria has existed for a long time under a state-held monopoly. This system is facing increasing pressure from both within Austria and across the EU. Early this year, the Austrian government announced that it would reform its gambling system, but will those reforms satisfy both stakeholders and EU law?
People who enjoy gambling activities in Austria have long had to contend with the limitations of the country’s regulatory environment. This environment only allows online gambling through a limited state-controlled monopoly system, which leaves some players unsatisfied with the limited options and protections this system provides. This dissatisfaction often leads to players seeking out the top Austrian casino sites beyond the limitations of the state-controlled monopoly. However, this state of affairs looks set to change, with the Austrian government having confirmed that changes would be coming to its gambling monopoly system.
How exactly the system is due to change remains largely unknown, with different stakeholders and interested parties advocating for different strategies. Austria has also come under some scrutiny in the wider context of the European Union (EU) for its gambling approach, as it might contravene rules around the free movement of services and free competition between member states.
Let’s take a closer look at the current and soon-to-be-updated monopoly model that Austria uses for online gambling, why there is a growing pressure to reform this model, and some likely avenues for reform, and why there has been conflict with the EU and what that might mean.
The State-Controlled Monopoly Model
The current gambling system in Austria is designed around the Glücksspielgesetz (GSpG), which sets out a federal monopoly control over all games of chance. This regulatory framework allows the state to authorize a small number of operators and includes a single online casino gaming license.
This system allows for:
- A small number of land-based casino operations which are tightly controlled.
- A single regulated online casino operator.
- Government influence is built into the gambling operations, including part ownership in some cases.
Austria’s Ministry of Finance is the main government body that oversees these gambling activities. It acts as licensor, policymaker and regulator. The historic precedent that Austria argues for the upholding of this status quo is that it allows the country to control any gambling-related harm that might occur, while critics state that it stymies competition, which leads to a lack of attractive bonuses like free spins offers for players, and might create a conflict of interest with broader EU policy.
Pressure to Reform Continues to Rise
While it is relatively common for some interested groups to seek reform to regulations and laws, the pressure on the Austrian government to reform its gambling regulations is growing at a prodigious rate, thanks to a number of factors.
In an interesting confluence, the country’s current online gambling license, as well as some of the land-based licenses, will be expiring in 2027, which provides the perfect opportunity to invest some time and energy into modernizing the regulatory environment that these licenses will require.
A rising number of industry stakeholders and policymakers across Austria have been calling for changes to its gambling regulations for some time. While there are many different opinions and ideas, many are advocating for systems similar to those in Germany or the UK, which would allow for multiple licenses to be allocated to operators who are prepared to accept strict regulatory oversight as they enter the market.
While the eventual outcome is still uncertain, the current Austrian government has accepted that reform is the best way forward, and drafts of the reform legislation are expected to help industry stakeholders have a say and align their expectations with what might come.
How Should the Reform be Focused?
As we mentioned above, there is a lack of consensus among stakeholders for the casino industry in Austria as to how exactly the reform should be enacted. There are three main schools of thought that stakeholders are falling into, and which are in competition.
Same Monopoly, More Control
Some are arguing for continuing with the same type of monopoly structure that is currently extant, but with stricter and harsher enforcement protocols for dealing with unlicensed operators. This approach includes talks of domain restrictions, tightening the rules for advertising and payment blocking, which are all areas of discussion in the broader EU fight against offshore operators.
Advocates of this approach state that it would:
- Enhance player protections through better oversight.
- Reduce illegal offshore activity.
- Leave gambling in the control of the state.
Detractors of this approach claim that ignoring the realities of the market could lead to this sort of doubling down on the monopoly having the opposite effects from those intended.
A Multi-License System
One of the other popular options being discussed is to open the market and provide multiple licenses for operators. This approach can be seen as successfully implemented in a range of other EU jurisdictions, such as Germany and the UK, and one of the big attractions for this type of system is the high levels of channelisation it provides.
Supporters of this approach state that it would:
- Increase the tax generated from gambling activities.
- Give the government better oversight by improving channelisation and bringing more numbers to regulated platforms.
- Provide players with better choices.
Split the Difference?
Some are advocating for a middle road, where elements of both other proposed systems are enacted. The idea here is that the monopoly would be phased out in a more gradual way, or that the state-run platform could remain in play but see a limited number of other licensed platforms join it as options.
How Does Austrian Regulation Stack Up Against EU Law
As a member state of the EU, Austria has to ensure that its laws comply with the principles of the EU, which adds a degree of complexity to its current gambling regulations and the reform discussions.
Article 56 of the Treaty on the Functioning of the European Union (TFEU) states that member states must respect the freedom to provide services across borders. This rule has some friction, obviously, with the Austrian regulatory environment of a single government-owned monopoly for online gambling. But gambling is considered a special case for the TFEU rules, and restrictions can be applied if they meet certain criteria associated with consumer protection. The criteria are that the restrictions imposed must be:
- Consistent.
- Proportionate.
- Justified by objectives aligned with public interest.
The system in Austria has been challenged a number of times, and there is still some doubt as to whether the current system meets the TFEU rules.
Final Thoughts
The gambling monopoly in Austria is likely to continue to see pressure from industry stakeholders and other EU states until reform is enacted, and then that pressure could increase or decrease depending on the nature of the reform. It could be expected that Austria will follow in the footsteps of other EU states, adopting a wider and more open online gambling ecosystem, but only time will tell how exactly Austria might reform its seemingly outdated system.
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