Did Austrian Lotteries make money from illegal providers?

Gambling in Austria, which is actually so strictly regulated, is currently being shaken by reports of possible involvement of state-owned companies in illegal online casinos. The gaming manufacturer Rabcat and its parent company, Österreichische Lotterien GmbH, are accused of having played a double game for years. On the one hand, it was explained how harmful unregulated providers are, but on the other hand, it was allegedly making a lot of money from them.

The matter is somewhat complicated, so it must first be clarified how Österreichische Lotterien GmbH and Rabcat are connected. In Austria, gambling is regulated and monitored by various government agencies and companies. The most important players are the Federal Ministry of Finance (BMF), Österreichische Lotterien GmbH and Casinos Austria AG.

• Federal Ministry of Finance (BMF): This ministry is the central authority for the regulation and supervision of gambling in Austria. It issues licences and ensures that the statutory provisions are complied with.
• Österreichische Lotterien GmbH (hereinafter referred to as ‘Lotteries’): This company has the monopoly for lotteries and various other games of chance in Austria. Among other things, it operates lottery products such as Lotto, Toto, EuroMillions and scratch cards.
• Casinos Austria AG: Casinos Austria AG is the parent company of the lotteries and operates the land-based casinos in Austria. The company operates several casinos throughout Austria under licences from the Ministry of Finance.<l/i>

Together with Casinos Austria AG, Österreichische Lotterien GmbH is in charge of Win2Day, the only legal online gambling service in the country authorised by the Federal Ministry of Finance. Both companies belong to the same group and work together to manage the online platform.

Rabcat Computer Graphics GmbH is a company that specialises in the development of online gaming content and software. The brand is known for producing high-quality casino games, including video slots and table games. Although Rabcat itself is not an operator of online casinos, the company is a well-known name in the industry and among players both in Austria and internationally. It is a subsidiary of Österreichische Lotterien GmbH. This connection has existed since 2015, when the lotteries acquired a majority stake in Rabcat. Interested parties can find corresponding games at Win2Day, but also elsewhere internationally.

Rabcat is now 100 per cent owned by Lotteries, but is still active globally. The main problem now lies in the fact that the gaming professionals have apparently been supplying their creations to casinos that were or are operating illegally in Austria for years. Certain big players continue to offer the brand's titles in Austria without a local licence. This would allow the affiliated Austrian casino companies to benefit indirectly from the unregulated market. They admit to an earlier involvement by Rabcat, but this is said to date back several years. The matter is rather convoluted, but the facts largely speak against the lotteries and Rabcat. This was brought to light by the non-profit magazine Dossier in an in-depth investigation.

Dossier is certain: Österreichische Lotterien GmbH, Casinos Austria AG and Rabcat played a double game

As can be read in Dossier, the head of Casinos Austria AG, Erwin van Lambaart, complained in the Salzburger Nachrichten newspaper as recently as summer 2023 that illegal gambling offers promote gambling addiction and that over 90 per cent of problem gamblers gamble on corresponding internet platforms. However, he omitted the fact that the Group subsidiary Rabcat had been making money from unregulated online casinos for years.

Dossier writes:

‘Rabcat has been supplying the international video games industry for years. It develops characters for the popular shooting games Fortnite and Valorant or 3D graphics for a Disney Mickey Mouse game. Rabcat also produces online gambling games in up to 32 languages, mostly based on classic one-armed bandits, also known as slots.’

These slot machine games could still be found until the beginning of 2024 at well-known casino giants that are accessible in Austria but do not have a licence there - such as bwin, William Hill, bet365, Tipico or Pokerstars. According to the dossier, Rabcat titles at Mr Green, for example, are still available to Austrians. Until recently, the games manufacturer still had the logos of some of the casinos mentioned on its website. They were removed after the Upper Austrian association Spielerhilfe became aware of the obvious cooperation with the illegal portals at the beginning of 2024 and informed the BMF.

A spokesperson for the lotteries told Dossier that if Rabcat games were offered by third parties, these would be illegal copies or plagiarisms, and that legal action would of course be taken against them. The company assures that Rabcat provides ‘complete games’ ‘exclusively’ for the lotteries. It is only possible that other companies are sourcing graphic designs from the brand.

The lotteries, other affiliated companies and the state have apparently long benefited from Rabcat's links to illegal providers

It is certain that Rabcat supplies games to international casinos and earns money from them. According to the dossier, internal documents from gaming platforms and gaming wholesalers show that the share of gross gaming revenue from Rabcat titles is or was between 11.5 and 13.5 per cent.

The lotteries state that, upon the 100 per cent takeover of Rabcat, they would have immediately ensured that the business relationships between their subsidiary Rabcat and the illegal providers, which until then had been indirect or partial due to the pro rata affiliation, were terminated. This should have happened from 2022.

Dossier writes about this:

‘According to the Rabcat company agreements, all decisions from the ‘inclusion and discontinuation of business branches’ to the ‘dissolution of the company’ could be made with a voting majority of 94 per cent - which means that Lotteries must have had ‘full control’ over Rabcat since 2019 and not just since 2022.’

The report also states:

‘As a wholly-owned subsidiary of the lotteries, Rabcat is, incidentally, partly state-owned. In addition to the main owner Allwyn of the Czech Sazka Group, Novomatic AG, the ORF and the Republic of Austria indirectly own shares in the casino and video games company. This puts the Republic in a tricky dual role.’

But even if Rabcat, according to the official voices, only went completely to the lotteries in 2022, the latter had previously received certain sums from the international and illegal business in Austria via the company shares, which have been in existence since 2015.

Conclusion

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