Austria: Sports betting is a game of skill and therefore largely unregulated

Throughout Europe, sports betting is considered gambling. Really all over Europe? No, Austria is actually taking a special path: similar to the Gallic village around Asterix, which did not want to be conquered by the Romans, the Alpine republic insists on categorising sports betting as a ‘game of skill’ despite much criticism. This is accompanied by a few special features.

The definition of sports betting varies within the European Union, as regulation is primarily the responsibility of the member states. All in all, however, most members agree that such offers are a form of gambling. Of course, this also applies to the German State Treaty on Gambling (GlüStV) of 2021. According to Section 3 (1) GlüStV, a game of chance is a game of chance ‘if a fee is charged for the acquisition of a chance to win and the decision on the prize depends entirely or predominantly on chance’. This definition assumes that the outcome of the bets is ‘predominantly determined by chance’, which justifies comprehensive regulation under the Gambling Act.

Switzerland also takes a restrictive approach and defines sports betting as a form of gambling in the 2019 Gambling Act (BGS). According to Article 3 of the Gambling Act, gambling exists ‘if a win or loss is determined primarily by chance in return for a stake of monetary value.’ This means that sports betting in Switzerland, as in Germany, is subject to strict state control. In fact, Switzerland pays much closer attention to this and ensures that unregulated, i.e. illegal, sports betting portals on the Internet are not used in the country by means of network blocks.

Austria takes a comparatively liberal stance in the multitude of different classifications within Europe. In the Alpine republic, sports betting is regarded as a game of skill and is therefore subject to less stringent regulation. This categorisation is based on the assumption that the player's knowledge and experience play a decisive role when betting on sporting events. The market there is therefore largely unregulated. For example, taxes are levied on the relevant providers, but no explicit gambling licence is required to provide sports betting services.

The sports betting legislation in Austria is the result of historical decisions

• Betting has always been regarded as a game of skill in Austria. After the monarchy collapsed in the country, responsibilities had to be reorganised in the newly founded republic. The betting business was comparatively straightforward at the time. There was not much more to bet on than horse racing. It was therefore sufficient to leave the relevant regulations to the federal states. The first provisions can be found in the General Civil Code (ABGB) of 1811.
• The regulation of gambling, which classically includes options such as roulette or baccarat, has always been the responsibility of the federal government. It issues a licence for casinos and similar offers. In Austria, there is a monopoly in which only Austrian Lotteries and Casinos Austria currently have the right to publish the games in question. This takes the form of lotteries, stationary casinos throughout the country and the online platform Win2Day.

According to legal experts, it was a precedent from 1932 in particular that set the direction for the definition of sports betting as a game of skill. This ensured that betting on sporting events does not fall under the gambling monopoly to this day. Chess, billiards and bridge also fall into the same category. In these games, you can clearly improve your own skills through training and directly influence their outcome with sufficient skill. In the discussion about the correctness of this view, the Constitutional Court has since referred to this historical case law several times, meaning that betting has remained - and will probably remain - a matter for the federal states.

As a result, there are nine different laws for sports betting in Austria - one for each federal state. It is almost impossible to determine exactly how many bookies are authorised.

The categorisation as a game of skill significantly supports the flourishing market

There are an incredible number of legal, semi-legal and illegal providers that characterise the Austrian betting market. Just as confusing as the actual number of bookmakers is the turnover they generate. However, the tax statistics provide an indication: as in Germany, betting providers that are active in Austria have to pay a fee to the state for each stake. The tax here is 2 per cent.

According to experts, the fact that betting providers in Austria have hardly any legal restrictions is particularly responsible for the strong market growth. For example, the laws of the individual countries provide for different standards of player protection and do not impose any advertising restrictions. There is a real fragmentation, which not least means that players who are banned in one of the federal states can simply continue betting in another. Another problem lies in the fact that many providers are not based in Austria, which means that the relevant regulations often do not fully apply to them.

Criticism is of course inevitable, but not much is likely to change in the foreseeable future

For years, gambling protectionists have been calling for stricter categorisation and general handling of sports betting in Austria. Only recently, an open letter signed by around 200 medical, psychological and legal experts was published. According to the letter, betting in a world in which computers can calculate odds or change them every second has nothing to do with skill and is purely a matter of luck. The signatories are calling for gambling to be categorised as gambling as well as fixed loss and time limits, advertising restrictions and more budget for the prevention of addiction. According to the local press, all parliamentary parties are open to changes. Only the ÖVP has apparently not responded.

Nevertheless, it is unlikely that anything will change soon, as the industry is well established and has a strong lobby, making it a significant economic factor. Sponsorship money is awarded to sports associations or clubs right down to the lower levels and there is correspondingly little fear of contact. The coach of the Austrian national football team Ralf Rangnick is a brand ambassador for the provider Tipp3 and the football player Carina Wenninger is teaming up with Admiral for an equal opportunities campaign. There are many other examples of such collaborations.

Conclusion

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