Austrian court criticises government for casino licensing process

Austria’s Court of Audit has criticised the process to award casino concessions in the country for a lack of transparency in the decision making process, just under a year after the licences awarded to NOVOMATIC and a Swiss-German consortium were revoked.

As part of the process three new casino licences were awarded, with two secured by NOVOMATIC and one by Plaza 3 Entertainment Development AG, a consortium comprising Casino Baden AG and Gauselmann Group.

The process to award the licences was concluded in June 2014, only to be derailed following complaints by existing licence holder Casinos Austria, which currently operates 12 casinos across the country.

The Bundesverwaltungsgerichthof (Federal Administrative Court) found that significant conditions of the application process, and the terms by which these applications would be evaluated, were not disclosed.

These complaints were upheld by the Court of Audit, which noted that the tender documents “left a lot to be desired,” blaming time pressure for the process’ deficiencies.

“The time pressure in the final stage of the process led to errors in the concession process that had to be rectified in adjustment notices,” the court explained.

The tender documents gave little indication as to what a viable application should entail, or on what key points the applicants would be judged on.

The three new concessions were awarded alongside the country’s six existing licences, which were granted to the existing licence holder Casinos Austria.

The partially state-owned gaming company was named winner of the existing six concessions based on a percentage system in which it fulfilled ten per cent more of the criteria than any other bidder.

However, for the three new licences, the winning bidders were chosen on the basis of having fulfilled between 1 and 2 per cent more points than other applicants. The Court of Audit noted the small gap between the winning bidders and the losers, compared to Casinos Austria dominating the process for the existing licences.

“The design of the concession regime, tendering processes and decision-making were marked by shortcomings in the transparency and substantive accountability,” the Court said.

It also criticised the non-disclosure of sub-criteria and the lack of insight into the Advisory Board’s discussion processes.

It is unclear what steps will now be taken, though it appears likely that the process will have to be restarted.


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