Scandal underlines OVWG calls for end of gambling monopoly

The Austrian Association for Betting and Gambling (OVWG) is pushing for more transparency in the country’s gambling laws after a series of police raids investigating corruption between politicians and the country’s monopoly operator.

OVWG, which counts among its members bet-at-home, Interwetten, Mr Green and Kindred Group, believes that the controversy around the appointment of former Freedom Party of Austria (FPO) politician Peter Sidlo as CFO of Casinos Austria in May underlines the need for a transparent licensing system. 

The investigation surrounds the accusations that Sidlo’s appointment was linked to changes in the law around online gambling and slot machines in Vienna. Last week, the prosecutors carried out further raids as part of their investigation following on from their initial searches back in August. 

The OVWG is understandably not happy with the revelations. It has released a statement calling for change: “The developments of the past few days have shown one thing: Austria urgently needs to rethink its gambling monopoly.

“On the one hand, this concerns the multiple function of the Federal Minister of Finance as supervisory authority, licensing authority and co-owner of the monopolist. On the other hand, there is the unjustifiable fact that there is only one national online gaming licence and that there are considerable concerns about its conformity with EU law.”

OVWG believes that a modern gambling regulation in line with market conditions must serve to create a transparent and safe gaming environment. It highlights player protection for customers, legal security for companies and comprehensive control as well as guaranteed tax revenues for the state.

The association points at jurisdictions such as Denmark to demonstrate that these objectives can be achieved by introducing a licensing system in which licences are not limited in quantity but linked to high standards of player protection. 

It added: “There are already a large number of responsible online operators in Austria who pay around 100 million euros in taxes each year, create around 1000 jobs and invest around 50 million euros each year in Austrian sport. And all this in compliance with the highest player protection standards.”

OVWG is pushing back against the argument only the monopoly can provide protection and control, saying that view can no longer be defended. “The online sector in particular offers a multitude of technical possibilities that ensure comprehensive state control,” it explained. “For example, a safe server system allows the state to access the provider’s data.

“A comprehensive control and the introduction of a blocking database across all providers and game forms ensures that a blocked player cannot play with any other provider. It is also noteworthy that in Denmark the monopolist has not even lost market share through the abolition of the monopoly and the introduction of the licensing model.

“Model countries such as Denmark show that such licensing systems lead to a significant improvement in player protection. Digitalisation in particular opens up completely new possibilities in the area of player protection, and Austria should take a proactive approach to this with modern legislation and licensing.”

Claus Retschitzegger, President of OVWG, added: “We have scientific studies from the University of Munich and the University of Vienna which clearly come to the conclusion that the current monopoly is contrary to EU law.

“If Austria is really serious about player protection, it is high time to introduce a transparent, fair and EU-compliant licensing system and an independent supervisory authority. These licences must be put out to tender in a public and transparent procedure and may not be tailored to a particular company.”

Casinos Austria denies any wrongdoing and is also conducting its own internal investigations into the allegations but it is the one being held by the Office of the Public Prosecutor for Economic Affairs and Corruption (WKStA) which OVWG will be hoping highlights the need for a change in the licence system.

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