Monopoly in online gambling - a mistake?

Strict gambling laws apply in most European countries. In some countries, such as Austria, there is even a state monopoly on online gambling to this day. Private companies have no chance of applying for a licence and operating legally on the market. But how up-to-date and, above all, sensible is such an online gambling monopoly in practice?

A few weeks ago, the Austrian Association for Betting and Gaming (OVWG) spoke out in favour of abolishing the online gambling monopoly in Austria in its current form. Casinos Austria AG is currently the de facto monopolist for online gambling in Austria. The Vienna-based public limited company operates twelve casinos, among other things, and generated a turnover of around 1.13 billion euros in 2020. However, Casinos Austria AG is majority-owned by a Czech gambling group.

How sensible is a monopoly in online gambling?

Online gambling is now organised in the spirit of liberalisation in almost all European countries. This means that private companies can almost always apply for licences from the relevant authorities in order to legally offer online casinos or other games of chance. The situation in Austria is somewhat different. Here, Casinos Austria AG still holds a monopoly for online gambling. The public limited company is currently only active on the market with the provider Win2day.

This monopoly has recently come under increasing scrutiny. German business journalist Hans-Jürgen Jakobs, for example, calls the gambling monopoly in Austria a "relic from a bygone era". Jakobs is also of the opinion that monopolies destroy competition in the 21st century and lead to less innovation. Overall, there are of course significantly more competitors on the Austrian online gambling market than the state provider Win2day. However, none of them have an official licence and are therefore effectively illegal. This is despite the fact that they are even subject to taxation in Austria.

Section 3 of the Austrian Gaming Act states succinctly on the subject:

"The right to organise games of chance in Austria is reserved to the federal government".

Will Austria soon be the last monopolist in Europe?

The Austrian Managing Director of Entain plc, Florian Sauer, criticises the fact that Austria could soon find itself alone with its monopoly in the online gambling sector. Only a few other countries, such as Finland, still regulate gambling to a similar extent and hardly allow any private companies to operate as providers. As recently as June last year, we reported that unregulated gambling is also a problem in Finland. However, Finland is now planning to open up its gambling market and introduce a licence system from 2026.

The Austrian Association for Betting and Gaming (OVWG) is now calling for fair competition instead of a monopoly in Austria. An end to the gambling monopoly could make the market safer and more transparent. OVWG President Claus Retschizegger commented on the issue as follows:

"Casinos Austria are frantically trying to hold on to a monopoly, while the OVWG is showing how Austria's gambling market can be made safer and more transparent."

A liberalised gambling market therefore promotes cooperation and creates added value for all parties involved - players, gambling providers and the state. Members of the OVWG include bet-at-home, Bet365, Entain, Betway and Cashpoint.

Is there also a monopoly for gambling in Germany?

No, there is no state monopoly on gambling in Germany. After all, private companies in this country can also apply for a licence for virtual slot machines or sports betting from the Joint Gaming Authority of the federal states (GGL). The official whitelist provides a good insight into the private and state companies that hold a gambling licence in Germany.

However, there is a lottery monopoly in Germany. This means that only the state or the individual federal states are authorised to offer the lottery as a game of chance. In addition, since the new Interstate Treaty on Gambling (GlüStV) came into force, the federal states have been able to enforce a kind of small monopoly for online casino games such as roulette or blackjack.

Despite this theoretical possibility, in practice most federal states have so far decided in favour of opening up this sub-market. Thuringia is one exception to this rule. We reported back in March 2022 that Thuringia would be granted a monopoly for online casino games.

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