Vienna (APA): German professors criticise numerous provisions – criticism of excessive advertising by Casinos Austria – restriction to an online licence is not possible – private operators are pleased

The Austrian gambling rules are incoherent and contrary to EU law, says an expert opinion prepared by the University of Osnabrück on behalf of private gambling and sports betting operators (OVWG). The authors, two university professors, cite not just one but several examples: for example, it is not acceptable that poker may only be offered in the partly state-run Casinos Austria and that the three additional casino licences were not put out to tender again.

The design of the gambling and betting regulation was “incompatible with the coherence requirement under EU law and therefore to a large extent contrary to European law and inapplicable”, according to the legal opinion of 7 September 2020 submitted to the APA. In the opinion of the German lawyers, several regulations must not be implemented at all until the Austrian legislator has created a new regulation that is in conformity with EU law.

The experts find the advertising behaviour of the Casinos Austria group (including lotteries) particularly problematic; this should be avoided for the time being.

The fact that the domestic supreme courts (Constitutional Court/VfGH, Administrative Court/VwGH and Supreme Court/OGH) have affirmed coherence and conformity with EU law since 2016 is not left unmentioned in the expert opinion. However, in legal literature, Austrian gambling law is “almost unanimously considered incoherent and contrary to European law”.

The authors are concerned that sports betting is not regarded as a form of gambling in Austria and is largely liberalised under national law. Quite in contrast to slot machines. The legislator had not sufficiently justified this, for this reason alone the differentiation between gambling and sports betting violates the Union’s coherence requirement.

It was also incoherent that poker could now only be offered in the 12 casinos operated by Casinos Austria. “This is particularly true against the background that the Constitutional Court explicitly classifies poker as a ‘mixed game’ and thus puts it on a par with sports betting”, say Professors Tristan Barczak of the University of Passau and Bernd J. Hartmann of the University of Osnabrück.

The inclusion of poker in the Gaming Act (GSpG) has cost “poker king” Peter Zanoni his economic existence. As his licence expired at the end of 2019, he had to close his “Concord Card Casinos” (CCC) this year and file for insolvency. But Zanoni is thinking about a new start.

The fact that the three additional casino licences introduced with the 2010 amendment to the Austrian Gaming Act were not put out to tender again after the licence notices were revoked in 2016 also violates the coherence requirement according to the expert opinion. The failure to issue a new tender cements the legal situation – contrary to EU law – which existed prior to the so-called Engelmann ruling of the European Court of Justice (ECJ) in 2010. At that time, the ECJ overturned the gambling monopoly by deciding that the gambling licences, which until then had always been awarded by private treaty to the Casinos Austria group, must be put out to tender throughout the EU. Since then, only Casinos Austria, which is partly owned by the State, has been given the opportunity to tender.

The experts also lack a coherent justification for the fact that there is only one online gambling licence (which is linked to the lottery licence of the Casinos Austria group) but an unlimited number of sports betting licences. “The difference cannot be justified in particular on the basis of arguments relating to player protection”. There was a lack of empirical studies commissioned by the state on the addiction risk of the respective types of gambling.

Which is also not possible: The fact that the Casinos Austria group is allowed to install video lottery terminals (VLT) in those federal states which have banned games of chance with slot machines, and that these VLT machines (“WINWIN” outlets) are even predominantly located in “prohibited countries”. “In terms of the range of games on offer, the course of play, player protection, taxes and technical processing, slot machines and VLTs are almost identical forms of gaming. VLTs therefore invite players to avoid the ban on slot machines”, the legal experts state.

The different regulation of gaming machines in slot machine salons – largely operated by the Novomatic Group – and in individual installations is also incoherent for the lawyers. “The more restrictive requirements for individual installation of machines in view of player protection are undermined by less rigid regulations in the area of slot machines”, the experts believe. They also comment on the slot machines in full casinos: the inconsistency of these machines results from the fact that they are not subject to any limits on bets and winnings. This is exactly what has been upsetting small operators for years.

The professors have “considerable concerns” about the advertising of casinos and lotteries. The gambling law does not guarantee that the advertising is limited to the “certain”, i.e. “narrowly limited, level required by the EU side with the aim of guiding potential players to legal gaming offers”. The legislator had to adopt coherent rules for both stationary and online gambling, which on the one hand were restrictive enough to protect gambling addicts and on the other hand allowed gambling offers which were “attractive enough to attract the average player”. Furthermore, there is a lack of adequate legal protection for casinos’ competitors and consumer protection bodies to enforce the monopolist’s (Casinos Austria) advertising rules before an independent court. If a state already restricts the EU freedom to provide services and introduces a gambling monopoly, the monopolist’s advertising must not be oriented “towards its own sales interests”.

Rivals of Casinos Austria have been complaining about the role of the State in the field of gambling for a long time: on the one hand, the Republic has to ensure the protection of players and is responsible for issuing licences, on the other hand, it has a stake in the casinos and therefore profits financially (via taxes and dividends) if there is a lot of gambling in them.

According to the German professors, Austria is obliged to ensure legal certainty and to establish a legal situation in line with EU law. Otherwise, the Republic would be threatened with claims under state liability law for breach of EU law.

In particular, according to the report, the restriction to only one online gambling licence is inadmissible. This is water on the mills of the private gambling and betting operators, who are currently operating in a legal grey area. Although Internet gambling is only allowed in Austria on the win2day site (belongs to the lotteries), there are numerous other operators, such as bet-at-home. They all invoke the EU’s freedom to provide services. With a licence from one EU country – usually Malta, where it is tax advantageous – you can offer your services throughout the Union.

“The expert opinion clearly proves the illegality of the Austrian gambling monopoly under EU law and thus confirms a fact that we have been pointing out for many years: Online operators licensed in another EU Member State may also offer their services in Austria”, said Claus Retschitzegger, President of the OVWG and spokesman of bet-at-home, about the APA. “We expressly welcome this, because the providers bring a lot of added value and countless IT jobs to Austria“.