Austria: Court rules lottery tender to be constitutional

In October 2011 the Austrian Ministry of Finance awarded a subsidiary of Casinos Austria AG, Österreichische Lotterien GmbH, the sole licence for the operation of lotteries in the territory of Austria.

Three companies which also applied for the Austrian lottery licence – among them the online betting and gaming company bet-at-home.com – objected to the Finance Ministry’s decision and appealed to the Austrian Constitutional Court by contesting the applicable provisions of the Austrian Gaming Act (Glückspielgesetz) and the tender itself.

In its ruling of 6 December 2012 (published on 8 January 2013) the Austrian Constitutional Court declared that the tender was not unconstitutional. Therefore, the award to Österreichische Lotterien GmbH is de facto sealed and valid for 15 years, starting on 1 October 2012.

The contenders’ main argument was that the underlying provision of the Austrian Gaming Act was tailored for the current and past de-facto monopolist, Österreichische Lotterien GmbH. The reasoning behind this argument was that the Gaming Act requires a minimum registered capital of 109 million Euros from an applicant for the lottery licence. The contenders argued that it is a rather obvious coincidence that Österreichische Lotterien GmbH has a registered capital of exactly 110 million Euros and also argued that this requirement is unconstitutional.

The Constitutional Court ruled that this complaint was unfounded. According to the Constitutional Court the legal requirements for the tender and the restrictions associated with the award of such licences are “appropriate and justified”.

The current lottery licence also includes several forms of online gaming (including online casino games, poker and slot machines). Österreichische Lotterien GmbH is therefore also the sole licenced operator for online gaming in Austria – competitors and legal experts had previously called for a division of the licence in a conventional licence and an online gaming licence. It has now been made clear that the Constitutional Court ruling rejects such a division.

It will be interesting to see whether, backed by this new ruling, the Austrian Ministry of Finance and Österreichische Lotterien GmbH, as the sole licensed operator for online gaming (operating under the url www.win2day.at), will increase their enforcement activities against other operators offering online gaming service in Austria or for Austrian customers.