Austrian gambling sector confronts surprise move: Fresh administration preserves contentious gaming monopoly policy
Let's Chatter: The new Austrian coalition, consisting of ÖVP, SPÖ, and NEOS, has nixed the buzz about loosening the gambling monopoly and jacking up taxes on gambling. Quite the contrary, they're aiming to tighten the reins instead.
Distance from Reform
Long-time gambling market pundits have been yammering for a shake-up of the Austrian gambling scene. Many European countries have succeeded in letting private providers step in, but Austria's retained exclusive licenses for brick-and-mortar casinos and online gambling. These licenses belong to the partially state-owned Casinos Austria AG until 2027 at least.
Now that the coalition agreement for the new Austrian three-party government is out, the gambling monopoly looks like it's here to stay, according to Der Standard.
The government is thinking of classifying sports betting as a game of chance, instead of the current game of skill classification. A possible reclassification wouldn't stop the betting tax hike from two to five percent. The overall gambling tax on revenues from land-based games will also take a bump, leading to public protests from licensed gambling providers.
Concerns among Casinos Austria and others
Industry bigwigs are feeling uneasy about the proposed tax increase in the brick-and-mortar sector. Casinos Austria AG and the Austrian Lotteries Group are sounding the alarm on potential hefty financial burdens. They could result in annual costs of over 100 million euros.
In 2023, the company managed to dish out 724 million euros in taxes and duties, scoring a consolidated profit of nearly 183 million euros. A drastic tax hike would be risky and potentially threaten hundreds of jobs.
Professionals warn that significant revenue growth is often overshot when taxes are increased in relation to gambling. As legal providers reduce their payout ratios, they risk seeing more players flock to the black market, already quite extensive in Austria.
Tougher Measures Against Black Market Operators Planned
The governing parties have promised to tackle the black market with more force. Their plan is to create a similar authority to the Joint Gambling Authority of the Federal States (GGL) in Germany. Current powers lie with the Federal Ministry of Finance (BMF) in Austria, which isn't equipped to serve as a gambling supervisory authority.
The success of these measures against black market operators might hinge on rulings by the European Court of Justice (ECJ). Recently, a court in Malta issued a landmark decision, rejecting Austrian judgments against Maltese gambling providers.
The ECJ must now decide whether Malta's provider-friendly protective laws comply with EU law. They will also rule on whether Austria's gambling monopoly hinders the freedom to provide services across the EU.
If the ECJ finds that Austria's monopoly violates Union law, the situation could change dramatically for providers operating on the Austrian market without a license. At this point, though, it's too early to make such assumptions.
Enrichment Data: Although the Austrian government's decision to maintain the gambling monopoly and increase taxes could keep government revenues steady, the move might stymie industry growth and foster illegal activities. Pressure from the EU could eventually lead to market reforms, but for now, the landscape remains restrictive for external operators.
The coalition in Austria, consisting of ÖVP, SPÖ, and NEOS, has announced that they will not loosen the gambling monopoly and instead aim to tighten the reins, causing concerns among Casinos Austria AG and other gambling providers as they discuss potential financial burdens and job losses due to the proposed tax increase in the brick-and-mortar sector. The government is also planning to reclassify sports betting as a game of chance, but this wouldn't prevent a betting tax hike from two to five percent, leading to public protests from licensed gambling providers. In an attempt to tackle the black market, the governing parties intend to create an authority similar to Germany's Joint Gambling Authority of the Federal States (GGL), with the success of these measures potentially hinging on rulings by the European Court of Justice (ECJ).
