Framework
To ensure its long-term success, a company has to know its environment and be able to recognize risks and opportunities at an early stage.
At the Casinos Austria and Austrian Lotteries Group, we monitor and analyze global economic, environmental and social parameters and trends as a matter of course. We conduct periodic analyses of our environment and focus at length on our opportunities and risks.
Our updated ESTEMPLE analysis for 2017 reveals the following picture:
Our risk and opportunities management system helps us to recognize and assess our key risks and opportunities and link them to effective control measures.
We carry out a quantitative risk and opportunities analysis and a qualitative assessment of long-term strategic influences twice a year. The results of these analyses and assessments are reported to the relevant audit committee and corresponding control measures are defined.
Legal Developments at National Level
Financial Markets Anti-Money Laundering Act
In conjunction with the implementation of the new Austrian Financial Markets Anti-Money Laundering Act (Finanzmarkt-Geldwäschegesetz), which was published on 30 December 2016 in Federal Law Gazette I No. 118/2016, the Austrian Gaming Act was also amended. Along with the incorporation of relevant EU Directives into its provisions to prevent money laundering and the financing of terrorism, certain provisions regarding gaming license holders were also amended.
The Austrian Gaming Act now stipulates that in the case of a direct or indirect acquisition of shareholdings that exceed the threshold levels of 20 percent, 30 percent or 50 percent, the acquirer must obtain authorization from the Ministry of Finance. The acquisition cannot be carried out prior to the receipt of this authorization. For the first time, the Gaming Act now also stipulates a duty of disclosure for the sale of such holdings.
The Gaming Act now also sets out detailed qualification requirements and fit-and-proper stipulations both for directors/executives and for members of the supervisory board of companies that hold a gaming license. The amendments further stipulate that the statutes and articles of association of companies that hold a gaming license must prohibit sole directors and/or sole managing directors and sole powers of attorney. All these amendments came into force with effect from 1 January 2017.
OGH 4Ob124/17i
In its decision of 27 August 2017 (4Ob124/17i), the Austrian Supreme Court of Justice (Oberster Gerichtshof; OGH) rejected the appeal against a ruling by the Regional Court Korneuburg (Landesgericht). This ruling, which was made in a case brought by a player against an online gaming operator without a license to operate in Austria and which ordered said online gaming operator to repay gambling losses, thus enters into legal force. The OGH ruled that the online gaming products offered were in violation of the Austrian Gaming Act. Under the provisions of the Gaming Act, the selling of games of chance for money on the internet is a constituent part of the lottery license held by Austrian Lotteries. The holding of a gaming license from another country does not entitle the holder to offer such games of chance for money in Austria, even if this license was issued by a Member State of the European Union or the European Economic Area.
This decision could have far-reaching consequences for the Austrian online gaming market, since it means that those operators who offer online gaming for money in Austria without an Austrian license are not only in violation of the Gaming Act, they must also be aware that players will demand repayment of any losses.
Legal Developments at European Level
On 7 December 2017, the European Commission decided to close all contract infringement procedures relating to gambling in its Member States and no longer handle any complaints regarding the gambling sector.
The background to this far-reaching decision is as follows: the regulation of gambling is deemed to be a matter of national law. The Commission considers that complaints against the specific configuration of national gaming laws can be handled more efficiently by the national courts in their respective countries. While the Commission will “continue to support Member States in their efforts to modernize their national online gambling legal frameworks and to facilitate cooperation between national gambling regulators,” it is expressly not one of its goals to promote an EU single market in the gambling sector. In the past, online gambling operators in particular have repeatedly sought to bring about a Europe-wide liberalization of the gambling sector by submitting complaints to the Commission. The Commission has now – as it had already done in the past – clearly rejected this approach.
European Casino Association (ECA) and European Lotteries (EL)
The Casinos Austria and Austrian Lotteries Group is represented on the two most important European associations for licensed gaming operators, namely the European Casino Association (ECA) for the casino industry and the European Lotteries (EL) for lottery companies in Europe.
The European Lotteries association was established in 1983 in Switzerland and has its headquarters in Lausanne. The association has also maintained an office in Brussels since 2007. EL members include lottery companies from 44 countries, including the 28 EU Member States.
More than 900 casino operations in 28 countries across Europe are represented in the European Casino Association. In 2017, the ECA’s reach was further extended when Monaco – a very important player in the casino industry – applied to join and was accepted as a new member.
The ECA and the EL thus represent Europe’s licensed and responsible gaming operators. In 2015 – and on the initiative of Casinos Austria – the ECA became the only casino association worldwide to also become a member of the UN Global Compact.
The uncontrolled rise in unlicensed gaming operations, both in the form of illegal slot parlors and cross-border online gaming sites that are either illegal or do not hold a license to operate in a given country, are widely viewed by the EL and the ECA to be one of the biggest challenges and threats facing licensed gaming operators.
Both associations therefore strongly support and advocate the stringent enforcement of all applicable national gaming laws. They also call for online gaming to be subject to the same strict rules and regulations that apply to licensed terrestrial gaming.
Online gaming must be subject without restriction to the applicable national gaming laws and regulations in the country in which an online gaming site is accessible. In this context, it is important to note that several rulings issued by the European Court of Justice in 2016 underscore the validity and applicability of the principle of subsidiarity.
As a logical consequence, the European Commission announced in 2017 that it had closed all corresponding contract infringement procedures and would no longer handle any complaints regarding the gaming sector. This decision underscores the importance of strong and committed lobbies in Brussels.
Casinos Austria AG plays a key role in the ECA. Casinos Austria Director Prof. Dietmar Hoscher has been a Vice Chairman of the ECA since 2017, where he is responsible for two crucial areas: Legal & Regulatory Affairs and CSR & Responsible Gaming.