IBIA notifies EC of Lower Austria’s irrational betting restrictions

The International Betting Integrity Association (IBIA) has submitted its response to the European Commission (EC), in relation to the state of Lower Austria drafting its ‘Sports Betting Act’ which seeks an assessment on compatibility with European Union laws.

Last August the executive of Lower Austria, published its draft legislative mandate seeking to comprehensively revamp its state wagering laws, that have been governed since 1978 by the limited frameworks of the ‘Law on Totalizators & Bookmakers’.

At present, Austria’s nine states have been granted autonomy on governing wagering services, that have been classified federally as ‘an activity of skill’, with the nation’s casino, bingo and lottery services governed by Austria’s Ministry of Finance (BMF).

Austria’s unique gambling regulatory make-up has seen sports betting in the states of Lower Austria and Burgenland (East Austria) become ungoverned for modern consumer engagements related to online betting and retail betting terminals.

Submitting its draft act, Lower Austria seeks to establish a two-fold licensing system distinguishing online operators and retail incumbents, in which online licences are granted over a revolving ‘two-year maximum period’. A sharp contrast when compared to retail licensing,  where incumbents can secure a ten-year licence once their initial two-year certification has been concluded.

At a consumer level, the executive has chosen to prohibit live betting as a vertical and will further enforce operators to limit all betting wagers to €350 maximum stake-per-bet.

Publishing its EC response, the IBIA (formerly ESSA) details its concerns on the effectiveness of Lower Austria’s proposed licensing framework and consumer restrictions of the above-mentioned provisions.

In relation to Lower Austria’s licensing regime, IBIA states that the executive has created unattractive conditions for ‘long-term business investment’, not taking into account a betting incumbent’s operational costs, activities, planning and development of infrastructures.

“IBIA believes that the differentiation between the licensing durations for retail and online betting is unwarranted and discriminatory. There is no reason why a licensing system for online betting cannot be flexible and amendable.” – The IBIA details on licensing conditions.

With regards to the €350 maximum bet restriction, the IBIA states that Lower Austria has failed to present ‘a clear rationale for the limitation’, detailing no evidence as to what a purpose a betting cap serves.

The IBIA states that Lower Austria would better serve its consumers by following the established policies and practices of jurisdictions such as the UK and Denmark, where regulators work with incumbents to improve betting parameters, market controls and self-exclusion programmes tailored to each customer’s needs.

“It is not in the interests of responsible regulated operators to encourage or facilitate social problems from gambling, in fact, quite the contrary. Such adverse behaviour is to the detriment of responsible operators and the reputation of the industry; regulatory authorities would also impose new regulatory measures and increased cost burdens on operators.”

Contesting live betting restrictions, IBIA underlines that Lower Austria’s concerns on the vertical ‘fostering addiction’ and ‘facilitating the manipulation of sports’ as wholly inaccurate.

The IBIA states that there is ‘no validity to assertions that potential addiction associated with live (in-play) betting is greater than other forms of betting permissible under the legislation’.

The integrity body underlines that the executive could have implemented a number of less restrictive provisions catering for gambling addiction concerns within its draft mandate.

In relation to sports corruption and manipulation, the IBIA states that Lower Austria’s live betting restrictions run contrary to available data compiled by INTERPOL and Europol law enforcement bodies.

Presenting further evidence, the IBIA details that criminal actors have primarily targeted unregulated betting operators based in Asia, and prefer to wager on traditional pre-match markets which offer higher levels of liquidity allowing for greater opportunity to mask illicit activities.

“The Lower Austrian authorities have not provided any evidence that would justify such measures which will have a detrimental impact on the market and the level of consumer channelling. The association, therefore, requests that the Commission explore the appropriateness and compatibility of these unjustified product limitations and the related restriction of trade imposed on licensed betting operators and Austrian consumers in accordance with EU law” – The IBIA states concluding its EC response.

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