The term ‘gambling’ is foreign to the Austrian legal system and can only serve as umbrella term that encompass the entirety of the various types of legally defined activities in this context.

The most fundamental distinction in Austrian gambling law is drawn between ‘games of chance’ and ‘betting’.

‘Games of chance’ are defined as games where the decision on the outcome exclusively or predominantly depends on chance.

The Austrian law does not include a nationwide and uniform definition of ‘betting’. In general, ‘betting’ may be understood as the placement of a bet on the outcome of a future event whereby the outcome of the bet does not predominantly depend on chance, because players can bring their knowledge regarding the event into their decision-making process and this knowledge outweighs the element of chance. The Civil Code defines that a bet is concluded, if concerning an event unknown to both parties a certain price is agreed between them for the person whose claim corresponds to the outcome of the event.

Games of chance are regulated under federal law through the Gaming Act and subject to a federal monopoly on games of chance.

The Gaming Act provides an exception for state gambling with gambling machines [Landesausspielungen]. These may be subnationally regulated through state laws and five of the nine Austrian states, namely Lower Austria, Upper Austria, Burgenland, Carinthia and Styria, have elected to do so. The remaining four states decided to not take the opportunity to regulate this type of terrestrial games of chance offering.

Betting is regulated on a state level through nine separate state betting laws.

Games of chance are a federal matter in legislation and enforcement. The regulator is the Tax Office Austria [Finanzamt Österreich].

Landesausspielungen are a state matter in legislation and enforcement. The competent regulator is the respective state government of the five states that have elected to permit this type of games of chance offering within their state.

Betting is a state matter in legislation and enforcement. The competent regulators are the state governments of the nine states.

The enforcement agencies that impose penalties for administrative offences regarding violations of the regulations for the above-mentioned gambling activities are the competent district administrative authorities.

There are two different types of B2C licenses that allow holders to offer under the federal monopoly on games of chance:

• One lottery license: The lottery license covers all stationary lottery offerings, electronic lotteries (i.e. online games of chance) and video lottery terminals (VLT). Österreichische Lotterien GmbH has been granted the only lottery license. The electronic lotteries (online games of chance) offer is available on the website www.win2day.at. The term is until 30 September 2027.
• Fifteen casino licenses: The casino licenses cover land based casinos in Austria. Twelve of a total of fifteen casino licenses have been granted to Casinos Austria AG. The three other licenses that had been granted to other business entities were revoked by the public-law courts. It is yet unknown when and whether those three remaining licenses will be retendered. The term of the casino licenses is 31.12.2027 respectively 31.12.2030.

Landesausspielungen require a license from the respective state. The Gaming Act stipulates that the number of valid licenses for the operation of Landesausspielungen is limited to a maximum of three per state. The maximum terms range between ten and fifteen years depending on the respective state Landesausspielungen law.

State betting laws do not limit licenses for offering sports betting in number, thereby creating an open market. The terms differ from state to state and are set individually in the license.

The regulatory regime does generally not require licenses for business-to-business (B2B) providers. However, for example the Gambling Machine Regulation contains specific hardware and software requirements for gambling machines and video lottery terminals. Similarly, the state betting laws also provide for technical requirements concerning betting terminals, and a detailed description of the functions of the betting terminal needs to be provided to the authority prior to operation.

Games of chance are generally subject to the federal monopoly on games of chance. According to the Gaming Act, games of chance, for which no license has been granted under the Gaming Act and which are not exempt from the federal monopoly pursuant to the Gaming Act, are prohibited.

The five state laws regarding Landesausspielungen provide that operation of these games of chance without a state license is prohibited.

The state betting laws also contain provisions of prohibited bets. These are for example bets with a stake over a certain amount, bets that violate the general moral feeling, bets on amateur competitions, bets on events where mainly children or young people participate and live bets. The exact restrictions vary from state to state.

The licensing process, the licensing authority, the eligibility requirements for applicants, the information to be provided and the period of validity of licenses vary depending on the type of gambling activities that the respective license regulates.

The Tax Office Austria may grant the single license for lotteries, electronic lotteries and VLTs after a transparent public tender process. The main application requirements especially include that applicants must be corporations located in EU or EEA member states with a minimum capital of EUR 109 million. In the event of a successful application by an interested party with its registered office outside Austria, the license shall be granted on condition that the registered office of the corporation is established in Austria, unless they already hold a comparable license in their country of incorporation and are subject to a comparable supervision by a public regulator. Managing directors must show that they have professional suitability and experience. Persons holding shares and having a controlling influence must show that they have reliability and comply with fit and proper requirements; in any case persons with a shareholding of at least 20% or shares granting special rights or groups of persons acting in concert may be fall under these obligations. Additionally, the license is to be granted under conditions, including a duration where the maximum is fifteen years, a security deposit of at least 10% of the share capital, and a limit on the number of approved video lottery terminals.

The Tax Office Austria may grant up to 15 licenses for land-based casinos after a transparent public tender process. Key requirements especially include having a corporation located in EU or EEA member states with a minimum capital of EUR 22 million. In the event of a successful application by an interested party with its registered office outside Austria, the license shall be granted on condition that the registered office of the corporation is established in Austria, unless they already hold a comparable license in their country of incorporation and are subject to a comparable supervision by a public regulator. Managing directors must show that they have professional suitability and experience. Persons holding shares and having a controlling influence must show that they have reliability and comply with fit and proper requirements; in any case persons with a shareholding of at least 20% or shares granting special rights or groups of persons acting in concert may be fall under these obligations. Furthermore, a security of at least 10% of the share capital will be required. The maximum duration granted for a licenses cannot exceed 15 years, and various conditions regarding security, game types, visitor control, and more will be specified in the license.

Landesausspielungen and sports betting are regulated at a state level through individual state laws, so the licensing process differs from state to state, which is why only a general overview be given below.

The Gaming Act dictates minimum requirements for applicants for licenses for Landesausspielungen, which are then elaborated further in each respective state law. Applicants for licenses for Landesausspielungen must be corporations with a supervisory board that have no shareholders with controlling influence who pose a threat to reliability in terms of regulatory policy. At least one managing director who is professionally suitable on the basis of previous experience must be appointed. Furthermore, the corporation needs to show proof of a paid share capital of at least EUR 8.000,00 per authorized gambling machine and of a guarantee with a liability amount of at least 20% of the minimum share capital. The licenses are valid for between 10 and 15 years at the most, depending on the individual state law.

State betting laws do not limit their licenses in number. All state betting laws require the applicant to possess reliability, meaning applicants may be excluded if they have previously been convicted especially regarding offences to the provision of betting services, also including violations of the Criminal Code, Gaming Act, state gambling and betting laws or AML-provisions. Furthermore, most state betting laws require applicants to show proof of their professional qualifications and creditworthiness. Betting licenses in most states are limited in time.

All licenses require especially the submission and approval of suitable concepts for player protection, protection of minors and anti-money laundering. Licenses may be granted with stipulations that need to be fulfilled by the licensee.

Generally, individuals are not required to hold personal licenses. However, the Gaming Act as well as the mentioned state laws include personal prerequisites that must be fulfilled when applying for and holding a license. These fit and proper requirements for especially managing directors and shareholders with controlling shares concern qualities such as reliability and professional suitability as well as experience.

The fragmentation of the regulatory framework for gambling according to the type of gambling offered also impacts on the permissibility of advertising and marketing of gambling opportunities, as once again a distinction needs to be made between games of chance and betting.

Operators holding licenses regulated under the Gaming Act are generally entitled to advertise their offering in Austria, but have to apply a responsible standard to their advertising measures. The federal ministry of finance has published a non-binding interpretation for the practice of games of chance advertising detailing their understanding of what constitutes a responsible standard.

For operators not holding games of chance licenses under the Gaming Act and offering such products in Austria, an advertisement ban is in place. The Gaming Act prohibits advertising or facilitating of advertising of games of chance where the operator does not hold the relevant Austrian games of chance license. This administrative offence is punishable with a fine of up to EUR 22.000,00 for each individual violation and the principle of accumulation applies.

Each state law regarding Landesausspielungen provides that licensees also have to follow a responsible standard in their advertising measures. The state laws in this regard also contain requirements on the outward appearance of the brick and mortar locations.

On the other hand, the state betting laws generally do not include explicit regulations regarding sports betting advertisements or marketing. However, for example, the Viennese state betting law also requires the application of a responsible standard to the advertisement measures of licensees. Furthermore, limitations on the outward appearance of the terrestrial locations are also included.

The Austrian gambling law does not explicitly regulate affiliate marketing. Generally, if the underlying gambling offering is permitted in Austria, then also its marketing is permitted, if a responsible standard is upheld. Should however the gambling offering itself be prohibited then also the advertising of such offering is prohibited.

The main administrative offences and sanctions relating to a breach of gambling law and license terms are included in the relevant regulations for each type of gambling activity outlined above.

The Gaming Act includes administrative offences and corresponding sanctions for violations of its provisions. Section 52 of the Gaming Act incorporates the legal basis for acting against operators who do not hold an Austrian license.

The main subsection stipulates that any entrepreneur, who operates, organises or makes accessible from Austria a game of chance that has not been granted a license or participates in such games as an entrepreneur commits an administrative offence. The fine for each individual offence is up to EUR 60.000,00 and the principle of accumulation applies.

For B2B providers it should be noted that their actions may potentially be directly qualified as an action under Section 52 Gaming Act or as aiding and abetting of such an action taken by the games of chance operator, especially depending on the individual contractual and factual set up.

The Gaming Act also prohibits advertising or facilitating of advertising of games of chance where the operator does not hold the relevant Austrian games of chance license and foresees a fine of up to EUR 22.000,00 for each individual violation and the principle of accumulation applies.

Should operators holding a license for lotteries or land-based casinos no longer fulfil the requirements of the license or should they be in violation of the Gaming Act, the licensee has to be ordered to restore the rightful condition under threat of an administrative fine. In case of a repeat offence, the managing directors are prohibited from running the business. As ultima ratio, the Tax Office Austria may withdraw the license.

Section 52 Gaming Act further states that participation in electronic lotteries for which no license has been granted is punishable, if the required stakes are placed from within Austria. This administrative offence targets the players for participating in unlawful online games of chance and the offence is punishable by a fine of up to EUR 7.500,00 and the principle of accumulation applies.

The Gaming Act provides that where one particular act constitutes both an administrative offence as defined in Section 52 Gaming Act as well as a criminal offence defined in Section 168 Criminal Code, only the administrative offence law provision of Section 52 Gaming Act shall apply. Criminal liability based on the criminal law provision regarding games of chance is therefore very limited. For example, individual players may fall under the applicability of this criminal offence, if they are taking part in the game of chance on a commercial basis (professional player). Moreover, violations of other criminal offences, such as fraud or money laundering, remain applicable to all stakeholders.

The five state laws regulating Landesausspielungen each contain administrative offences for violations of the state laws. The fines imposed vary significantly from state to state and range between a maximum of EUR 22.000,00 and EUR 40.000,00 for individual offences and the principle of accumulation applies.

Similarly, the nine state betting laws each contain their own administrative offences for violations of their provisions, with fines of up to EUR 25.000,00 in some states.

Operators holding licenses for Landesausspielungen or sports betting who break the rules of the relevant state laws may have their license withdrawn by the regulator because of such violations.

For administrative offences as well as criminal law it should be stated that the direct violation as well as aiding and abetting of violations are punished equally in Austria.

In addition to these penalties from the authorities, it needs to be mentioned that a significant consequence in Austria comes from civil claims filed by players reclaiming their gambling losses. These player claims have increased considerably over the past years due to the emergence of process cost financiers.

In typical player claims against games of chance operators not holding an Austrian license, the reclaiming of net losses is based on the understanding that the games of chance contract is illegal and therefore null and void. The legal basis for the reclaiming of net loss is the reversal under the law of unlawful enrichment. The legal basis for player claims against directors, UBOs, group companies or B2B providers directly is tort law due to a violation of a protective law (especially Gaming Act).

Lottery license: applicants must be a corporation from EU or EEA member states with a minimum capital of EUR 109 million and certain individuals must demonstrate reliability and professional suitability. A security deposit must be submitted.

Land-based casino license: applicants must be a corporation from EU or EEA member states with a minimum capital of EUR 22 million and certain individuals must demonstrate reliability and professional suitability. A security deposit must be submitted.

Landesausspielungen licenses: applicants must be a corporation with a supervisory board, professionally suitable managing directors, minimum capital per approved gambling machine and financial guarantees.

Betting licenses: professional qualifications and creditworthiness are typically required.

All licenses require especially the submission and approval of suitable concepts for player protection, protection of minors and anti-money laundering.

In the application process for the awarding of a license especially the systems and facilities for gambling addiction prevention, player protection, anti-money laundering and crime prevention of the applicant are to be reviewed and considered.

Regarding specific obligations, the Gaming Act as well as the state laws regarding Landesausspielungen and sports betting base their anti-money laundering requirements mainly on the federal Financial Market Money Laundering Act and require license holders to adhere to certain regulations contained therein. This act consolidates provisions on the prevention of money laundering and terrorist financing in one law, thereby implementing the EU directives and regulations into Austrian law.

For gambling licensees AML-requirements especially concern more detailed fit and proper provisions for managing directors, shareholders and supervisory board members. Regarding the gambling activity itself, there are requirements to verify the identity of the visitors. Furthermore, basic due diligence requirements apply and, in cases of increased risk or in the case of politically exposed persons enhanced due diligence requirements apply. Licensees have an obligation to report suspicious circumstances and take related accompanying measures. Each licensee has to conduct a risk analysis in regular intervals.

The Gaming Act provides requirements for (lottery, casino and Landesausspielungen) licensees concerning measures to prevent gambling addiction and player protection as well as protection of minors. The main obligations concern the establishment of an access and identification system, training of staff and cooperation with specialized player protection institutions. Warning systems with graduated player protection measures ranging from player information, consultation meetings, independent credit checks to player bans need to be devised, submitted to the authority and implemented.

The state betting laws also require similar responsible gambling measures to be in place.

Any person who has decided to acquire, directly or indirectly, or to increase, directly or indirectly, an interest in a company holding a license under the Gaming Act, with the effect that his interest in the voting rights or in the capital would reach or exceed the limits of 20 per cent, 30 per cent or 50 per cent, or the license holder would become its subsidiary, shall give prior written notice thereof to the Federal Minister of Finance. The Federal Minister of Finance shall approve the intended acquisition if proof is furnished that the requirements for license application continue to be met after the acquisition of the shares by the interested acquirer; if this is not the case, the acquisition shall be prohibited. The acquisition of the shareholding may not be carried out before the approval has been granted. Furthermore, licensees shall notify the Federal Minister of Finance in writing at least once a year of the names and addresses of the beneficial owners as well as the names and addresses of the shareholders or other associates holding qualifying holdings.

For Landesausspielungen, the Gaming Act provides that the licensee must have an ownership structure or, if applicable, a group structure that does not impede effective supervision of the license holder.

Each state betting law has their own specifications. However, in general the applicants must be reliable and professionally suitable. Reliability is assessed in particular on the basis of whether the betting entrepreneur’s previous conduct indicates that they possess the necessary reliability with regard to betting. If the betting entrepreneur is a legal entity, the natural persons appointed to represent the betting entrepreneur externally as well as their beneficial owners must fulfil these personal requirements.

The Gaming Act and the state laws regarding betting and Landesausspielungen all include administrative offences and sanctions.

These provisions especially target the gambling offering of operators without the necessary license and sanction violations with monetary fines for which the principle of accumulation applies. Direct violators and aiders/abetters are punished equally.

The applicability of criminal law is limited insofar, as violations contained in the Gaming Act supersede criminal law.

Additionally, player claims against games of chance operators, directors, UBOs, group companies, or B2B providers must be mentioned in this context as they present a significant exposure for stakeholders.

The basis of calculation for taxes, as well as the tax rate imposed on operators, depends entirely on the type of gambling offered, and subsequently varies significantly. Taxation for all types of gambling is regulated on a federal level and is therefore applicable uniformly nationwide. The most relevant gambling-related taxes are as follows:

Licensees as well as operators not holding Austrian gambling licenses are required to pay the above outlined taxes.

Generally, the VAT Act exempts betting and games of chance activities from VAT of 20 %, with the exception of turnover generated through gambling machines and VLTs.

In Austria, income that does not fall under the seven types of income are not subject to personal income tax and players therefore generally do not have to pay income tax on winnings from games of chance.

In the past years, there have been continued insinuations that a reorganisation of games of chance in Austria is planned and a draft law may be expected. However, thus far the announced draft law has not been published or sent to appraisal. Any developments in this regard will need to be monitored closely by all stakeholders.

For Landesausspielungen the licenses in Carinthia will expire in 2025. Therefore, there are/will be new tenders for these licenses.

The lottery license and some casino licenses under the Gaming Act expire in 2027, which is why a tender process is to be expected shortly.

From today’s perspective a significant risk for games of chance operators not holding an Austrian license as well as for their directors, UBOs, group companies or B2B providers is the continued high volume of player claims at civil courts.

The Austrian civil courts mainly deal with player claims against online games of chance operators not holding an Austrian license. Their approach is clearly in line with well-established high court case law that is in favour of players and thus against games of chance operators.

In addition, the public perception of games of chance operators due to government scandals and active publication of civil claims by attorneys and/or process cost financiers is quite adverse.

The offering of online betting services should be considered by any operator looking to enter the Austrian market.

In the absence of a nationwide betting regulation and the resulting fragmentation into nine state betting laws, the regulation of online betting has developed differently in the individual states. At the time of writing, only five state betting laws contain explicit provisions for online betting. The remaining four state betting laws do not contain explicit provisions for online betting, although they have all been amended or rewritten in recent years.

The five states with explicit regulation of online betting in their state betting laws link the licensing requirement to the existence of a physical presence in the respective national territory. In the case of online betting, a physical presence is to be understood as the place from which the data for the medium is provided. According to the legal materials, this means in particular the server location. If such a physical presence (server) is not located in the state, there is no obligation to obtain a license under these state betting laws.

For the four states without explicit regulation of online betting the legal doctrine has long established a strong line of argumentation. This year, the Supreme Court confirmed that the exercise of activities as a betting operator via the internet does not require a license under a state betting law if the betting operator does not exercise these activities in a permanent establishment within the meaning of the respective state betting law in the respective state territory.

Furthermore, it needs to be highlighted that broad definitions included in most state betting laws allow for bets on various events, such as eSports, and are especially not limited to sports betting.

The above outlined circumstances make offering online betting services to customers in Austria in a fully compliant way possible and thus a great business case.