Austria's Difficult Fight Against the Slot Machine Mafia

Austria's difficult fight against the slot machine mafia

By Barbara Ziegler Published on: February 1st, 2018 Updated on: December 16th, 2022

A professionally organized gang has the gambling market in Upper Austria under control. Illegally set up machines bring her millions in winnings. The authorities watched for a long time and are now failing because of the criminals' sophisticated logistics.

In Vienna you can hardly keep up with the destruction of the machines. The mafia replaces her within hours. ( Image source )

Strict requirements for setting up slot machines have been in effect in Austria since 2012. In the state of Upper Austria, the coveted licenses only went to large players like Novomatic with their Admiral Casinos. Nevertheless, there are countless illegal gaming devices in bars, gas stations and restaurants. In a good location, the slots generate income of up to NZ$ 10,000 per month. The operators of the locations receive a commission for the parking space - an apparently lucrative business for the small business owners. However, investigators suspect that the lion's share of the income comes from a criminal organization that takes care of the procurement and distribution of the devices.

The financial police are now taking tougher action. Thousands of machines were confiscated and destroyed. But the Daddel boxes are quickly replaced. Often within a few hours. For the investigators, this only leads to the conclusion that it is excellent organized gang which stores new devices in large quantities and can deliver them quickly if required. This professionalism is said to have been made possible primarily by the authorities turning a blind eye:

Illegal gambling has emerged under the eyes of the authorities. The municipalities said to the operators: ‘It’s fine as long as you pay entertainment tax.’ Gerald Sakoparnig, State Criminal Police Office of Upper Austria

So the criminals had time to establish themselves, make contacts and establish logistics. They essentially operate at a similar level to the large gaming companies and minimize downtime in their operations. Except that in the case of the gang, these are not caused by defects, but by confiscated equipment. The financial police are supposed to know the location of the central warehouse, but they can only intervene if the devices have been put into operation - possession alone is not a criminal offense.

Cat and mouse game

In some cases, officials even have to return the machines to the operators. The reason is the legal opinion of an administrative judge. In contrast to the rest of the Austrian judiciary, the lawyer is of the opinion that the gambling law contradicts EU guidelines. As a result, several confiscations have already been declared invalid.

The financial police find it particularly difficult to identify those behind the scheme. The gang probably also runs their own arcades. But the network of companies behind it is difficult to untangle; the traces lead to Slovenia, Hungary, the Czech Republic and Serbia and ultimately run into the sand. In addition, the criminals are proving to be surprisingly persistent. They are not even deterred by company closures. In Vöcklabruck, the authorities then took more drastic measures: They blocked the door of a business with a 300kg concrete pillar, but even that wasn't enough. They have now upgraded to 500kg – an absurd arms race. In Wels, an operator had his machines encased in concrete, the fire department had to come in and break the devices out of the ground.

The illegal scene cashes in uninhibitedly; desperate women whose husbands are gambling everything away contact us every week. This scene is not squeamish, if you watch it you will be second.Johannes Beer, Vöcklabruck District Authority

The state is not giving up

But the police are by no means giving up the fight. A special unit against gambling gangs is being set up at the Federal Criminal Police Office. Attempts will be made to uncover mafia-like structures and gain insight into higher levels of the hierarchy. This would be a great way to get to the people behind it. The operation is certainly fraught with risk for the officers. The gang has already equipped machines with gas traps in order to injure investigators when they open the devices, says Robert Klug from the BKA:

“We are dealing with organized, criminal structures that function similarly to a company: with several hierarchical levels, a high profit factor and presumably also influences in politics and the economy.”

The question remains whether such entrenched structures can be dismantled through police work alone. The problem is also social. There is a lack of awareness of injustice on the part of the operators, quite a few of them doubt the legality of the gambling law to. They do not accept the quasi-monopoly Novomatics, which was founded on player protection. They are prepared to risk high fines because their businesses would hardly be able to survive without the daddel boxes. And obviously there is a need for gambling that is far from being met by legal offerings. Possibly a revision of the legal situation with liberal licensing would be a more sustainable way to combat crime. In this way, the illegal sector could be pushed back and the machines would have an influence on how they function. Player protection could be improved by limiting stakes and playing time - a concept that the illegal operators are currently unlikely to implement.

Austria's difficult fight against the slot machine mafia