For the last five years, Niklas Sattler, a former executive at Casinos Austria, has been strategizing to transform Austria's stagnant land-based casino landscape. Leading Alea Trust, he has recruited a skilled team of experienced casino executives and industry specialists to mount a challenge against the long-time monopoly of Casinos Austria in the next land-based casino license tender.
"This old-school image of the industry – I don’t like that,” Sattler expressed. “So I said, let’s refresh the industry and let’s jump inside the tender. Let’s do it ourselves."
Since 2021, Sattler has successfully persuaded over 40 former managers from Casinos Austria and other global casino brands to join his initiative. Together, they are laying the foundation for a bid aimed at revitalizing the land-based gaming sector.
"Casinos Austria has a track record as a company, but they’ve lost a lot of expertise over the years,” he remarked. “Our idea was to find the top experts in AML, responsible gambling, finance, and casino operations and build a team that could compete at the very highest level."
As Austria gears up for its first substantial casino tender in years, Sattler sees an opportunity to reshape the aging industry into one that reflects more modern, socially responsible values. However, he is uncertain about entering the competition unless the proposed structure and packaging of the 13 casino licenses are favorable. He posed critical questions regarding whether the market will genuinely welcome new entrants or overly favor the incumbent.
Casinos Austria (CASAG) currently monopolizes the country’s two packages of 15-year licenses, which include six in urban areas (the Stadtpaket) and six in tourist regions (the Landpaket). In a draft bill released by Austria’s coalition government in June, sweeping gambling reforms were announced, allowing for the opening of the online gaming market and altering the current monopoly.
Amid these significant changes, questions about the future of land-based gaming have barely been addressed. The Finance Ministry’s proposed legislation outlined plans for 13 casino licenses, an increase from the existing 12. These licenses could potentially be divided into "objectively justified" packages.
The Finance Ministry emphasized that location decisions would rely on an objective study, which would consider factors such as population density, tourism potential, socioeconomic conditions, and demographic characteristics of casino catchment areas. The ministry also ensured that applications would be open to all market participants.
Sattler advocates for a straightforward distribution of the licenses, suggesting, "let’s make 13 single licenses. That means you could apply for just one." However, Casinos Austria has publicly favored maintaining the existing package structure. Sattler anticipates that instead of two packages of six, a single package of six could be created alongside one of seven, which might open the market to larger players like Merkur while limiting smaller entities' competitive opportunities.
Casinos Austria contends that retaining package systems is essential to ensuring comprehensive casino coverage while considering economic and tourism factors. A representative from CASAG, Patrick Minar, stated, "Only a carefully designed package solution can guarantee all of this… Individual tenders would produce the opposite effect and encourage ‘cherry-picking.’"
The eventual path that the government will take in the tender process remains to be seen. Still, the inclusion of packaging in the legislation suggests a likely trend. Nicole Daniel, a partner at DLA Piper in Vienna, explained, "The new provision provides a stronger legal basis than the previous regime because it expressly authorizes the packaging of licenses and specifies the factors the authority must consider."
Daniel cautioned that while packages are now regulated, the potential to favor incumbents has not been removed. The criteria for geographical diversity and economic potential risks becoming unnecessarily burdensome for new entrants.
Arthur Stadler, a gaming lawyer based in Vienna, emphasized the importance of a thorough and careful tender process under the new Austrian Gambling Authority. He stated, "This won’t just be the blueprint for future tenders… it also has to avoid repeating the embarrassing mistakes of the past."
The draft law also raises the question of the Finance Ministry's dual role as both a concession-granting body and shareholder, a concern echoed by critics in light of historical experiences. After revising Austria's gambling law in 2010, the Finance Ministry had conducted multiple tenders, and although the law did not require a package system, it grouped licenses into two sets. Eventually, its decisions were legally challenged due to lack of transparency in the evaluation criteria.
Currently, the draft stipulates that the urban casino licenses, due to expire at the end of 2027, will now be extended to December 31, 2028. This extension could further be extended by up to 24 months, depending on legal challenges or if no suitable replacement has been identified ahead of the license expiry.
Sattler, with deep ties in the casino industry, believes that a renewed approach to land-based gaming in Austria is essential. He emphasizes the need for casinos to align with the changing values of society, stating, "Our vision is much more about giving something back to players and to the community… we have to do something for the regional community."
He raises a vital question: does increased competition lead to greater social responsibility? While Casinos Austria maintains that less competitive pressure results in higher standards, Sattler argues that a diversity of operators fosters accountability and higher quality standards across the industry.
The gambling reform bill is continuing its journey through the political process, with the consultation period having closed on July 15. A required three-month EU notification period is on the horizon, and though the government timeline remains ambitious, potential bidders have been kept in the dark about crucial details of the tender process.
Daniel pointed out that while procedural rules are provided in the draft, the essential evaluation methodology for tenders remains unclear. This uncertainty is critical since how points are weighted and awarded could be the key legal issue concerning the upcoming tender.
Ultimately, Sattler’s decision to proceed with his Alea Trust bid hinges on the fairness of the criteria established for the tender. He stated, "We’re only going to enter the tender if the criteria are fair and safe and abide by European Union standards."
However, he expressed concern about possibly abandoning a endeavor he has spent years developing, reflecting, "It’s a chance missed for the next 15 years… my dream of the last five years would be smashed entirely."
