Dr Walter Schwartz: “When it comes to liberalization, the time is now — it’s now or never”

Dr. Walter Schwartz, attorney since 2001 and co-founder of SHMP Schwartz Huber-Medek Partner Rechtsanwälte GmbH, joins Casino Guru News to discuss the urgent need for action in Austria’s iGaming market. He explains what is at stake, why the current model is no longer sustainable, and why, when it comes to reform, later may simply be too late. In this interview, he outlines the legal and political risks of postponing change and what a reformed system could deliver for the country.

Q: Walter, can we start by addressing the latest reports from the Austrian Association for Betting and Gambling suggesting that the country may be edging closer to a license-based model for its online casino sector? What do you think about that?

First, we need to clarify the terminology: In Austria, the law distinguishes between casino licenses and lottery licenses. Currently, there are 12 casino licenses but only one single lottery license. Only the holder of this lottery license is permitted to offer online gambling. This means that, at present, there is only one company legally authorized to operate online gambling in Austria. The scope of this legal offering is not restricted: in addition to traditional lottery games (such as "6 out of 45"), it also includes casino games (such as poker) and slot machines available online.

The sole lottery license will expire in September 2027. There is currently an intense debate about whether this monopoly should remain in place or whether the market should be opened. One option under consideration is to grant three online licenses; another is to fully liberalize the market and allow an unlimited number of licenses.

In my view, there are strong arguments in favor of opening the market. If this opportunity is missed now, the market will remain monopolized for another 15 years — the typical duration of a license period. Given the large scale of illegal gambling activity, maintaining the monopoly would be a severe setback for player protection and would also result in substantial, ongoing tax losses for the Austrian state. When it comes to liberalization, the time is now — it’s now or never.

Q: The OVWG mentioned in a LinkedIn post that 30 might be an ideal number of licenses, citing Germany as an example. Given how things have turned out in Germany so far with the licensing of iGaming, do you think Austria should establish a similar regulatory framework or develop its own?

Any fixed number of licenses must be objectively justifiable. In my view, only a complete liberalization requires no further justification, either under constitutional or EU law, as it fully implements the fundamental rights of the Federal Constitution and the fundamental freedoms of the European Union without restriction. Therefore, why 30 licenses should be considered ideal is, for me, difficult to understand.

Q: Many people in regulatory services say that regulators constantly try to "reinvent the wheel" and end up misfiring in the process. Do you agree with this statement, and what are the ongoing problems with regulating a market such as Austria?

Unfortunately, I do not have the impression that a new wheel is being invented. In fact, what regulatory authorities produce after much deliberation is often not round like a wheel, but rather square like a window frame – and thus it doesn’t roll, it merely bumps along.

However, the problem often does not lie with the regulators themselves, but rather with the political decision-makers. In truth, everyone knows how the gambling sector could be regulated in a way that sufficiently protects players, society, and fundamental rights — but very few political decision-makers have the courage to actually make those decisions.

Q: Among the cited reasons for regulating the online casino sector in Austria is player protection. Do you believe that a regulated market can effectively protect consumers? For example, the Netherlands published a recent report indicating that, while the vast majority of consumers play on regulated gambling sites, gambling spending is still split almost evenly between the legal market and offshore operators.

The problem in Austria is that the illegal online gambling market has not been addressed for decades. If that changes, the share of illegal gambling in Austria would certainly decrease significantly. What is needed to achieve this? One proposal would be the liberalization of online gambling, allowing licensed operators to take legal action against illegal providers. In the land-based sector, this approach has proven to be very successful in tackling illegal slot machines.

Q: What do you think a regulated online casino market would ultimately bring to Austria?

To put it in a nutshell: less illegal gambling, better player protection, and significantly higher tax revenues.

Image credit: Casino Guru News