Increased Tax on Sports Betting in Austria, Effective from April 2025: Will the Government Revenue Still Decrease?
In a move that has raised eyebrows in the betting industry, Austria has increased its betting tax from 2% to 5% as of 1st April 2025. This tax hike is part of a broader package of tax increases and subsidy cuts in the country, as outlined in the coalition agreement of the new three-party coalition consisting of ÖVP, SPÖ, and NEOS.
The increase has been met with criticism from various industry associations, including the German Sports Betting Association (DSWV) and the European Gaming and Betting Association (EGBA), who have been vocal about the 5.3% turnover tax on online gambling in Germany. The concerns centre around the potential negative impact on the betting industry's growth and profitability, as the current Austrian online betting tax rate of 54% is notably high compared to countries like the UK where it is lower.
Sharif Shoukry, Managing Director of the Austrian Sports Betting Association, has warned of the consequences of the 150% tax increase. He fears that the absolute tax revenue might decrease in the future as market participants are forced to shut down. This could lead to a boom in the black market, as a tax that is based on the amount of stakes rather than the actual economic result could drive operators and bettors to untaxed or offshore betting options.
Legal providers must factor in these taxes directly in their payout ratios, which significantly reduces their attractiveness compared to illegal casino and sports betting sites. This could potentially result in reduced industry revenues, leading to decreased investments or layoffs.
The increase in betting tax could also impact sports sponsorship, as sports in Austria are expected to face cuts due to the tax burden. The Austrian sports betting providers currently contribute a "three-digit million amount" annually to the state coffers, but there is skepticism that overly high rates might backfire by limiting tax revenue growth.
Interestingly, sports betting in Austria continues to enjoy a special status and is not classified as gambling, but rather as a game of skill. However, the reclassification of sports betting as gambling could lead to further taxes, as the definition is reportedly under review by the new government.
The news of the betting tax increase was reported by oe24.at, and the new tax rate of 5% for sports betting in Austria is already being communicated on the relevant authority's business portal. As the debate over gambling taxation continues, striking a balance between effective tax collection and maintaining a competitive industry remains a challenge.
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Investors in online casinos within Germany might consider diversifying their portfolios to Austrian sports-betting markets, given the lower turnover tax in Germany compared to the potential high profits from Austrian sports-betting after the reduction of the betting tax from 54% to 5%. However, concerns persist about the potential rise of the black market due to the high tax rates, which could lead to decreased revenues and increased costs for legal providers.
