Licensing and regulation: Can we get a licence?

Licence TriggersGambling: Any game of chance in which the outcome is solely or predominantly reliant on chance (games of chance within the Austrian Gambling Act are, in particular, roulette, observation roulette, poker, blackjack, two aces, bingo, keno, baccarat and baccarat-chemin-de-fer and variations thereof) is considered gambling. However, basically only gambling which is arranged in the form of a draw needs to be licenced. Draws are games of chance (i) which an entrepreneur arranges, organises, offers or makes accessible; (ii) in which players or others render monetary benefit or benefit in kind as a stake for participation; and (iii) in which the prospect of monetary benefit or benefit in kind is offered by the entrepreneur, players, or others (prize). In principle, the law does not mention specific licence triggers, but in connection with gambling licences, it refers only to the "transfer of the right to operate". Consequently, the sanction provision of § 52 para 1 item 1 of the Austrian Gambling Act provides a better point of reference: Punishable conduct occurs if (i) a prohibited draw pursuant to § 2 para 4 of the Gambling Act is carried out (ii) by an operator pursuant to § 2 para 2 of the Gambling Act and (iii) participation takes place from within Austria. Therefore, it is generally not important that an offer is directed towards Austria, but that players participate from within Austria. Betting: Betting (including online betting) is subject to the respective betting law of the nine Austrian provinces. Typically, this includes the commercial contracting and brokering of bets and the commercial brokering of betting customers by betting companies in betting premises as well as online, in case the server is located in the respective province. Hence, in the field of betting, the licence trigger is usually a physical presence (in the form of betting premises or a server) established in the respective province. Some provinces also regulate social betting. ## Type of licence needed There are basically three types of licences: The lottery single licence, which includes offline lotteries and all online gambling services Casino licences, of which 15 were in principle put out to tender, but only 12 were granted (all of them to the de facto monopolist Casinos Austria AG) The betting licence of the respective province, some of which regulate only offline betting, others also online betting. Moreover, a couple provinces explicitly include social betting while others refer solely to betting on sporting events. ## Period of licence & renewal process Gambling: For the single lottery licence (which includes the products lotteries, video lottery terminals [VLT] and so-called electronic lotteries, i.e. online gambling, see above), the total award period is limited to a maximum of 15 years, after which the licence may be renewed. The same applies to casino licences. Currently, the Austrian Ministry of Finance is preparing for the regranting of the single lottery licence, as the current licence expires by 30 September 2027. Betting: The nine Austrian provinces each have different regulations regarding the duration of approval. This depends on the respective province in question, but usually the initial approval period is about 3 years or as long as the duration of the credit line confirmation. Extensions of the approval are also subject to different time frames, typically up to ten years (or for the duration of the credit line confirmation). ## Application timeframe and phrases Gambling: In accordance with EU law, EU operators are admitted to the public tender proceedings. These take place approximately 18 months before the start of the validity period and last about four months (for the lottery/online gambling single licence, the next public tender thus is scheduled for 2026, while the public tender for the casino licences is set to also take place in 2026 [so-called "city package" in respect of the cities of Bregenz, Graz, Innsbruck, Linz, Salzburg, Vienna] and in 2029, respectively [so-called "rural package" regarding the municipal territories of Baden, Kitzbühel, Riezlern, Seefeld, Velden, Zell am See]). Betting: For betting licences, the application timeframe depends on the respective province. Realistically, however, the applicant (depending on how soon the applicant himself provides the required documents) must expect a procedure timeframe of about 3–4 months. List of documents & type of information needed to support application Gambling: For gambling licences, the required documentation will be more precisely defined in the tender. In principle, however, it comprises the following: Documents concerning the registered office and legal form of the company Presentation of the ownership structure of the company Presentation of the company's statutes Proof of the existence of a sufficient financial framework (cf. "Capitalisation / Bank guarantees" below) Proof of reliability of persons exercising a significant influence on the company Evidence of the suitability of the managing directors Evidence that the licence applicant can be expected to exercise the licence in the best possible manner, in particular on the basis of its experience infrastructure development measures and own resources, as well as its systems and facilities for the prevention/assurance of gambling addiction player protection prevention of money laundering and crime operational security quality assurance internal supervision Betting: In the case of betting, requirements again depend on the legislation of the respective province. Basically, however, the following documents are usually needed (here using the example of a betting company licence in the province of Tyrol – other provinces may demand additional documents!): Extract from the commercial register (for legal entities/partnerships) Betting regulations (betting rules) Proof of financial capacity: Bank confirmation, i.e. the confirmation of a bank that one can irrevocably dispose of a credit line of at least EUR 150,000 for a period of at least one year (a bank guarantee will alternatively be accepted) Certificate confirming that the tax office has no objections Proof of citizenship (citizens of the Union and nationals or dependents of citizens of the Union or nationals of other contracting states to the EEA Agreement and Switzerland) Birth certificate Residence registration certificate Original criminal extract record (not older than 3 months) of the persons authorised to represent the entity as well as the beneficiaries Certificate of qualification of the persons authorised to represent the entity as well as the beneficiaries Policies, controls, and procedures to effectively mitigate and manage the risks of money laundering and terrorist financing with appropriate employee training programs Signed statement regarding the reliability of each authorised representative and beneficial owner ## Geographical cover In general, the licence(s) are not exclusively limited to Austria or its provinces, unless specifically described in certain licensing awarding documents. Practically, licensees may offer their (online) services into other Austrian provinces or even into other EU Member States on the basis of the freedom of establishment and the freedom to provide services (Art 49 and 56 TFEU) ## Mechanics of the licence process The licence must be applied for at the competent authority; modalities can be found in the respective law. In case of gambling licences, modalities can be found in particular in the public tender procedures. ## Bad Actor / Cooling off periods In principle, an applicant is considered unreliable if he or she has been convicted of certain criminal offenses (in particular under § 168 of the Austrian Criminal Code, i.e., illegal gambling), financial offenses, or violations of the Austrian Gambling Act, and the penalty has not yet been redeemed. Ongoing insolvency or reorganisation proceedings may also preclude reliability. Foreign citizens are considered unreliable if they have been convicted abroad of similar criminal offenses (or violation of similar provisions). It should be noted that reliability must not only be present at the time of approval, but the authority has the option of revoking approvals already granted at any time, if the holder of the licence is no longer deemed to be reliable. Previous unlicensed activities may, in individual cases, also disqualify an applicant, with the assessment of reliability lying largely at the discretion of the authority. ## Applicant considerations Gambling: Any corporation with its registered office in the EU/EEA may apply for a single licence for lotteries/online gambling; however, if a corporation with its registered office outside of Austria is awarded the licence, the licence must stipulate that the company's registered office must be relocated to Austria within a certain period of time. In the case of casinos, the licence can also be exercised by establishing only a branch in Austria, provided that the foreign corporation holds a comparable casino licence in its country of domicile and is subject to comparable state supervision of gambling, which, if necessary, provides monitoring information and carries out on-site inspections on the Austrian authorities' behalf (official chain of supervision). Betting: Regarding online offerings, there are currently only four Austrian provinces, namely Burgenland, Carinthia, Styria and Vienna, whose betting laws do not explicitly regulate the online sector. For the remaining five provinces, it should however be noted that several betting laws provide for a seat requirement (i.e. the server being situated in the province), which means that mere online operators are not eligible for licensing. This does not necessarily mean, however, that the provision of online betting in these provinces is illegal. In 2023, the Supreme Court clarified in a decision that the Styrian Betting Act 2018 regulates only the offering, conclusion, and brokering of bets, as well as the brokering of betting customers, insofar as these activities are carried out by the betting operator within the territory of the province. Sports betting offered by a betting operator from a location outside the provincial territory via the Internet is not covered by this. Consequently, the Supreme Court confirmed that a betting customer from Styria is not entitled to reclaim losses from online sports betting from a betting company domiciled in the EU. This ruling thus primarily affects the four provinces which have not (yet) regulated the online sector (Burgenland, Carinthia, Styria and Vienna). It has the effect that bookmakers who do not have a physical presence in the respective province can generally rely on an EU licence. How the Supreme Court would decide a similar case in another province that has implemented a regulation for online betting is to be seen. In the majority of Austrian legal literature—and as confirmed by provincial authorities—the 2023 Supreme Court ruling is interpreted as supporting the view that the mere offering of online betting does not fall within the scope of any provincial betting act if there is no physical connection (such as a server or registered office) to the province In other words: Without any physical ties to a certain Austrian province, such (online) services are not licensable in the respective Austrian province. A licence is still required in every province for any land-based establishment of an operator. ## Localisation In principle, there is no legal requirement to offer gambling products in German language or to use an Austrian top-level domain ".at" for online offerings. However, especially if a site is directed towards Austria, it is advisable to keep the site in German for consumer protection considerations in order to maintain transparency towards customers. Courts tend to rule that (gambling) contracts are (at least partially) void if the customer was not in a position to sufficiently understand what he was agreeing to (transparency requirement for entrepreneurs)