Interview with Dr. Raffaela Zillner: The Austrian Online Betting and Gambling Market
The Austrian Betting and Gambling Association (OVWG) is the domestic lobby for online gambling and sports betting providers. The association sees itself as an interface between politics, authorities and companies and strives to improve the dialogue between the parties and to create awareness for the industry. From a regulatory point of view, the OVWG strives for a modern regulation of the online gaming and betting sector in Austria that is in line with EU law and the market.
What is the importance of online betting and gaming providers for sports in Austria?
Austrian sports and the online gambling and betting industry have always been important economic partners. Every year, 100 million euros are invested in sponsorship and marketing in the Austrian sports and media landscape. These investments could be increased even further: Last year, we made a proposal for the introduction of a contemporary online gambling licensing system, in which additional revenues, such as any license fees, would be earmarked for mass and top-level sports. The existing sports funding would not be affected by this, and the state budget, which is already severely strained by COVID-19, would not be further burdened. We estimate that such a model could generate up to 50 million euros in additional revenue for domestic top-level and mass sports.
What is the current legal situation regarding online betting and gambling in Austria?
Briefly summarized: Outdated. In terms of (online) gambling, Austria is one of the last countries in Europe that still has a monopoly in the gambling sector. At this point, however, it is also important to explain that when we talk about the Austrian gambling monopoly, we have long since stopped talking about a state monopoly, but rather a monopoly of a majority private company. The Austrian gambling monopoly is now 60% majority-owned by the Czech Sazka Group. We are convinced that monopolies are out of date and Austria should therefore follow the European trend and replace the monopoly with a modern licensing system. Betting in Austria has the peculiarity of being regulated at the provincial level; this applies to both the stationary and online sectors. We also consider this to be outdated in a small country like Austria and call for a uniform nationwide solution for the regulation of sports betting.
It is now being considered to set up a separate gambling authority. In addition, network blocks are also being considered in the currently planned changes. What would this mean for your members?
At the end of February, a gambling reform was announced in the Council of Ministers. In addition to welcome changes such as the creation of an independent gambling authority and the improvement of player protection, the reform also includes the announcement of network blocks against online gambling providers. The planned network blocks are intended to exclude reputable companies licensed in the EU from the Austrian market. First of all, it has to be said that netblocks are in fact ineffective, because they can be circumvented even by technical laymen with just a few clicks. Apart from that, it is also unrealistic to assume that all players would switch to win2day – the only remaining provider. Rather, the demand for a differentiated offer will continue to exist, and thus providers from Asia and the Caribbean will push into the market. These operate outside of the authorities’ visibility and accordingly cannot be blocked. In addition, these providers meet neither player protection nor anti-money laundering or data protection standards and pay no taxes in Austria. The planned network blocks would therefore only have the effect of pushing reputable providers that already have licenses from other EU member states, such as bet-at-home, Interwetten, bwin, Unibet, MrGreen and many more, out of the market and driving players into the black market. It is therefore urgently necessary that the government reconsiders its plans and uses the announced gambling reform as an opportunity to introduce a licensing system instead of sticking to an outdated monopoly characterized by legal uncertainty, which is also majority-owned by the Czech Republic and no longer serves the original purpose.
What demands does the OVWG have of Austrian politics?
Gambling means responsibility. We are aware of this and therefore we are also fully aware that a strict regulatory framework is needed. However, this framework must be transparent and fair and treat all providers on the market equally. Specifically, we are calling for a licensing model in which licenses are not limited in terms of quantity, but are linked to compliance with qualitative standards. Every provider who can jump the high content hurdles should get a license. Anything else would always have an arbitrary and non-transparent aftertaste: after all, what justifies having exactly 5, 10, 15 or 20 licenses? In Denmark, this system has made it possible for over 90% of players to play with providers licensed in Denmark. We would like to see the same in Austria. In Austria, just 30% use the online services of the monopolist.
What best practice examples can serve as a model for Austria?
Numerous EU countries have already succeeded in creating an up-to-date legal framework for the online sector, thus taking account of market developments and ongoing digitization. Denmark has taken a pioneering role in Europe in this respect by introducing a licensing system with no limit on the number of licenses and with strict requirements in terms of consumer, data and youth protection. The authority publishes compliance guidelines, works closely with the licensed gaming providers on the one hand, but also strictly controls them. Just one year after the market was opened in 2012, the authority estimated that the proportion of unlicensed providers was only below 5 percent. The situation is similar in the UK, which has got its black market under control with a forward-looking market opening without any network blocks at all. Besides Denmark, most other EU countries have also abolished their online monopolies in recent years. The map above clearly shows that most EU member states have already switched to licensing models.
How do the sport and the state benefit here?
From our point of view, the introduction of a licensing model in Austria would lead to a WIN-WIN situation for everyone: Guaranteed tax revenues and comprehensive supervision for the state, high player protection standards for customers and legal certainty for responsible providers.
What role do sports clubs and associations have to play in the current discussion from your point of view?
In our discussions with decision-makers, we often have the impression that many are not aware of how important the financial contributions of the gaming and betting industry are for top-level and mass sports in Austria. If we succeed in pointing this out and explaining that it will be difficult without these funds, we would already have achieved a lot.