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Esports & Betting in Austria

Austria as an esport location

1. Sector overview in Austria

This is not only due to the coronavirus-related absence of "traditional" sporting events, as reflected in the 44 million people who already viewed the finals of the League of Legends World Championships in Paris in November 2019.
According to a study carried out by the Austrian Association for Entertainment Software, 4.9 million Austrians consume video games, and every seventh Austria regularly follows esport tournaments via streaming services or conventional media. Traditional sports clubs such as the soccer teams FC Schalke 04, Paris St. Germain and also FC Red Bull Salzburg have opened their own esport divisions in recent years. Such facts and figures effectively illustrate how enormous the potential of the esport sector in Austria actually is.
Many companies have also identified this trend and are investing in Austria, particularly in tourna-ments, esport leagues and esportspeople (athletes, gamers, developers, coaches).In this connection, one should mention the "A1 eSports League of A1 Telekom Austria, the Red Bull pLANet one, the eBundesliga, (enational league) hosted by the Austrian Football League, the Game City held in Vienna's City Hall and the Viennality, a fighting games tournament which attracts players from all over the world to come to Vienna. Prize money as well as the number of participants and spectators are stead-ily increasing. For example, Season 3 and Season 4 of the A1 eSports League promises total prize mon-ey of about € 70,000. Red Bull, which is known for its sponsoring activities in the field of action sports, is prominently investing in Austrian esport events and athletes. In the meantime, the event Red Bull pLANet one has emerged as an integral part of esport events in Austria. Furthermore, interna-tionally successful eathletes from Austria, for example the Fortnite Wold Champion David "Aqua" Wang or the "Rocket League" professional Maurice "Yueko" Weihs are contributing to the growing popularity of their respective sports.

The educational sector is also responding to the increasing popularity of esports. For example, the University of Applied Sciences for Management is offering a course of studies in "eSports Manage-ment" starting in the winter semester 2021/21 at Campus Wien in Vienna. The topic of esports is also becoming increasingly relevant on a university level, on the basis of the specialisation in sports, gam-ing and entertainment in cooperation with leading experts and fans of esports in Austria, the Austrian eSport Association.

Traditional betting providers have been confronted with existential problems as a consequence of the coronavirus pandemic and the lockdown imposed in the spring of 2020. Esport tournaments have emerged as a crisis-proof addition to their portfolios which can generate revenue even in times of so-cial distancing. The lawyer Dr. Arthur Stadtler, Vienna-based expert for betting and esports and partner at the law firm STADLER VÖLKEL Rechtsanwälte, states: "Electronic sports fulfil all the prerequisites to be interesting for video game aficionados and betters. Similar to traditional sports, there are favourites and underdogs. Ultimately, the frame and mind and condition on that particular day and that little bit of luck are frequently the decisive factors."

Austria's largest betting providers such as Cashpoint, Interwetten, bet-at-home, Tipico, bwin etc. have already been offering the opportunity to bet on esport tournaments for several years. In the weeks of the lockdown alone, in which the English Premier League soccer matches were cancelled, the providers registered 50 percent more registrations . If one compares revenue of the NFL amounting to ten bil-lion in relation to revenue of the betting providers in connection with this league totalling fifty billion , a similar developed can be expected for the esports betting market. These favourable future perspec-tives were recently underlined by statements made by various betting providers, in which the betting volumes in esports already surpassed volumes for traditional sports such as golf and tennis in 2010.

The triumphal progress of the esports sector and the related professionalisation result in legal issues which lawyers will have to increasingly deal with. "In contrast to what the name esports suggests, this activity is not or not yet recognised as a sport. If providers offer people the opportunity to place bets on the results of a sporting event which is not a sport from a legal perspective, this does not comprise sports betting, which would be principally eligible for licensing without any quantitative restrictions. However, lacking the capacity to be licensed as sports betting, bets on esport events are increasingly be-ing qualified on the basis of so-called society betting. Applicants can submit an application in selected federal provinces to be granted a license. There is no quantitative limitation applying to this admittedly attractive regulatory option", says the attorney Dr. Arthur Stadtler. The existing legal framework in Austria creates enormous potential for this sector.

2. Esports in the light of Austrian law

For those looking to become involved in the field of esports, the selection of a legal form is of essen-tial importance. The legal qualification plays a major role in this case. For example, associations in ac-cordance with the Austrian Law on Associations from the year 2002 enjoy tax advantages when they pursue non-profit or charitable purposes. Promoting body sports comprises a charitable purpose. An association first loses its right to such tax advantages when it is to be considered as a professional club in the respective sporting discipline and can show a certain income from the activity.
Esports in Austria is still not (yet) officially recognised as a sport. For this reason, there are, of course, many efforts being made to achieve recognition or at least equal treatment. There are many good ar-guments in favour of qualifying esports as sports, according to Mag. Urim Bajrami, lawyer and former esportsperson. "In addition to their mental skills, esports also require motor skills such as reaction speed, good hand-eye coordination and extensive perseverance. Players carry out up to 400 actions per minute during a match. However, we are still in a grey zone in Austria with respect to the legal qualifica-tion of esports. The working group for esports planned by the turquoise-green coalition government could provide a remedy. Its purpose is to clarify the legal framework for esports with respect to their non-profit status and classification as sports. As an official of the Austrian eSports Association, I am en-gaged in a lively exchange of views with political parties and responsible persons, whereby we are con-tinuously working on improvements and legal equality for esports."

3. Outlook

The signs of the times seem to point to a paradigm shift in the way sports are perceived and con-sumed. Austria has adopted an extremely positive attitude towards this form of progress in the field of esports, and is continually working with representatives of the respective sports to improve actual conditions and the legal framework in order to position the country as an esports hub in the heart of Europe. Even if it is questionable whether the coronavirus-related increase in the number of users will turn out to be sustainable in the long term, the trend towards digital events cannot be stopped.

Find out more about digitalisation in Austria here.

Dr. Arthur Stadler & Mag. Urim Bajrami, Stadler & Völkel Rechtsanwälte - Attorneys at Law

+43 (1) 997 10 25

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