Germany is dealing with a very interesting and even controversial court case at the moment. The case is now being deferred to the European Court of Justice (ECJ) and the ruling could have a significant effect on the industry.
Background on the Case
There’s a big chance you haven’t been able to follow the case or even be aware of it, which is completely understandable. So, in order for this to make more sense, let me give you the quick version.
Industry left frustrated as German law firms proceed with player reimbursement claims
Illegal Sports Betting Offers
Last month, a German casino player (the plaintiff) opened up a case against an Austria-based sports betting operator (the defendant). Back in 2018, this operator had allowed German players to bet on sports. During the period in question, the operator did not have a license to provide its sports betting services to German players.
This is now the reason for the claim and the plaintiff demands his bets should be inadmissible, resulting in any betting contracts to be voided.
In the documents given to the court, the plaintiff argues that the offer was illegal and did not meet certain German requirements regarding monthly max bets, a cash-out functionality etc.
I Want My Money Back
Confident that he has enough evidence to win the case, the plaintiff is asking the operator to return his total losses of €11,984.89 plus interest.
Initial Dismissal and Resurgence
The case has already been dismissed once by the Lower Court of Dresden in 2023. However, the case was planned to be brought up again by The 1st Civil Senate of the Federal Court of Justice of Germany (BGH) with a scheduled hearing during the first week of May.
Because of various reasons, the hearing was eventually canceled. So that’s it? Not quite.
The European Court of Justice
Final Saying Belongs to the ECJ
As a result, online sports betting and online casinos disputes relating to EU law will now be heard by the European Court of Justice (ECJ). This means that the European court will be the one making the final decision on these types of cases.
The Million Dollar Question
Are players entitled to reimbursement of their losses from gambling with unlicensed operators? Well that’s the million dollar question and we are still waiting for a decision.
Claus Hambach, Partner at Hambach & Hambach
Industry Concerns and Precedent Risks
According to legal experts like Claus Hambach (Partner) and Phillip Beumer (Senior Associate) at Hambach & Hambach, a German law firm specializing in gambling law, there’s cause for concern. Should the ruling be in the plaintiff’s favor, it will set a risky precedent for Germany.
“The Federal Court of Justice, Germany’s highest Civil Court, has recently published an extensive note, outlining its preliminary view that a player could in principle be entitled to being refunded their losses from participating in sportsbook offers.”
Because Germany has not issued a single casino license before the end of 2020, they now fear that this case could unleash a wave of similar lawsuits.
Malta Gaming Authority
Malta’s Stance and Legal Complexities
As most operators are based outside of Germany, there is a possibility to perhaps bring the case to the actual country of licensing. Malta, for example, offers one of the most prestigious and recognised licenses in Europe and could be in the line of fire in that case.
However, if you remember Malta’s passing of Bill 55 you know that this wouldn’t not be an option. The controversial law orders courts to refuse any foreign judgements against operators within the EU holding a license from Malta.
Compatible With EU Law?
There’s still a question of whether or not Bill 55 is actually compatible with EU law. Once again, it’s the European Court of Justice that’s usually the one ending up having to settle disputes when it comes to domestic vs European laws.
As you can see, this is quite a mess.
Playing with the House’s Money
Already concerned about the fact that almost 50% of German players use unlicensed sites, Hambach & Hambach does not think it’s in Germany’s best interest for the plaintiff to win this case. There are several reasons for it.
One big risk is the fact that if players believe they can expect to be reimbursed for their losses, turning to unlicensed operators will be encouraged.
Never has there been a clearer case of literally “Playing with the house’s money.” In other words the already big black market will get even bigger. Why not play there if you’re going to get your money back anyway, right?
Germany Could End Up Being the One to Pay
Another possible outcome is that Germany will be the one having to pay back all damages because of the legal mess they have allowed to be created.
Order in the court
Industry Reactions and Future Outlook
Lawyers are always on a lookout for a payday and in Germany, it is becoming very clear. Over the past couple of years, there has been an increasing number of historical player reimbursement cases.
It has gotten to the point where major law firms are promoting their compensation services online and advising players on how to claim back losses. Understandably, this has caused frustration among the gambling industry executives.
Although a slightly different case than the one leading to this article, PokerStars is one operator having felt the German heat. In 2022, they were ordered to pay back €58,500 to a player for losses on their site between 2014 and 2020.
In another 2022 ruling, Tipico casino was ordered to refund more than €43,000 to a player having played between 2014 and 2021.
Conclusion
As you can see, the German market is really going through something right now and who knows what the outcome will be. Clearly all markets do not work the same and I wouldn’t expect this to work everywhere.
As a player, you never know what can happen with an unlicensed operator, which is why we recommend playing somewhere with a license. You will find all the license information about each casino on our list of favorite crypto casinos.
There’s no doubt the industry is keeping a close eye on the ECJ’s decision, which could reshape the gambling landscape in Germany and beyond.
Stay tuned!
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