On 30 March 2016, the Austrian Supreme Court held that the Austrian gambling monopoly infringes upon the freedom to provide services according to art. 56 of the TFEU. This might also affect the taxation of gambling in Austria. 

The Austrian Gaming Act (Glucksspielgesetz) provides in sec. 3 for a state monopoly, i.e. only the Republic of Austria is, in principle, entitled to offer games of chance. The entitlement to offer these games can be passed on to private companies by awarding concessions or licenses. Moreover. the Gaming Act not only specifies the fees to be paid by the concessionaires and license holders. but also provides for the gaming tax rate applicable to gambling providers that are entitled to offer games of chance without an Austrian concession or license. In particular, this relates to foreign gambling providers that have a license from another EU Member State, invoke this license based on the EU fundamental freedoms and consequently offer games of chance in Austria. 

By reference to the case law of the European Court of Justice ("ECJ''), the Austrian Supreme Court (Oberster Gerichtshof) stated in its decision (OGH 30 March 2016, 4 Ob 31 / l 6m) that a gambling monopoly represents a restriction of the freedom to provide  services. Therefore. it is only compatible with European law if it is justified by overriding reasons in the public interest such as consumer protection, fraud prevention and the prevention of incitement to place excessive bets. According to the Austrian Supreme Court. the concessionaires oesterreichische Lotterien GmbH as well as Casinos Austria AG attribute a positive image to gambling and render it even more attractive by alluring advertising messages. This cannot be regarded as moderate advertising within the meaning of the ECJ case law, as it not only serves to lead consumers to controlled gambling networks. but also increases the overall demand for gambling. Consequently, the Austrian Supreme Court came to the conclusion that the Austrian monopoly infringes upon art. 56 of the TFEU.

That Austrian residents (in a purely domestic case) cannot directly rely on the fundamental freedoms was considered by the Austrian Supreme Court to be an instance of reverse discrimination which may contravene the principle of equal treatment laid down in art. 7 of the Austrian Federal Constitution (Bundes­ Verfassungsgesetz). Therefore, the Austrian Supreme Court presented the Austrian Constitutional Court (Verfassungsgerichtshof) with an application to repeal sec. 3 and other provisions of the Gaming Act, as well as in eventu the Gaming Act in its entirety, as unconstitutional.

The upcoming decision from the Austrian Constitutional Court is expected to be rendered before the year 20 l 7 and may have a major impact both on the regulatory requirements and the taxation of gambling in Austria.