The European Court of Justice (ECJ) will rule on whether sports betting operators should refund players for losses incurred before the German State Treaty on Gambling came into effect.
As more players seek to recover sports betting losses, these cases have reached the German Federal Court (BGH). Previously, in May, the regional court ruled to suspend all civil litigation in Germany to allow the European Court to hear the case.
The Federal Court stated that the 2012 version of the State Treaty on Gambling continues to prohibit unlicensed sports betting. Therefore, offering sports betting could be considered illegal, which means that contracts between players and operators are essentially void.
However, the court mentioned that whether this can actually be applied remains to be seen. Firstly, whether the provider had applied for a German sports betting license is a question, especially considering a previous court ruling that found the licensing process violated EU law.
If the violated law or regulation itself contravenes EU law, member states cannot impose criminal sanctions on what is considered illegal activity. Therefore, according to German civil law, whether sports betting contracts can be considered void still remains uncertain.
Local media claims Tipico is the operator involved in German sports betting
The case was initially filed in Karlsruhe, involving a claim for losses amounting to 3,719.26 euros from 2013 to October 2020, with German media reporting that Tipico was the operator involved. The case and appeal were dismissed by the local court, after which the plaintiff took the matter to the appellate court.
BGH court documents show that the defendant is located in Malta and offers sports betting through a German-language website with a "top-level domain".
The documents state that during the period involved, the operator had applied for a license under the then applicable State Treaty on Gambling in 2012 but had not yet received it. The company obtained a full gambling license in October 2020.
This raises another issue: whether the operator complied with the maximum monthly betting limit of 1,000 euros. According to the national treaty, players' monthly betting limits must not exceed 1,000 euros. The appellate court did not rule on this.
This is one of the increasingly numerous claim cases involving operators like Evoke (888 and Mr Green). These cases are a mixed bag for operators, some being dismissed and others going through court proceedings. Since the European Court has taken up the case, two parallel lawsuits have been suspended.
The German gambling industry believes the European Court will end the dispute over player reimbursements
Dr. Ronald Reinhart of the Redeker Sellner Dahs law firm, representing the defendant in the Federal Court litigation, told iGB that he believes the European Court is likely to confirm that the reimbursement cases should be dismissed.
"The court's reasoning is primarily based on the fact that the 2012 German licensing process ('Konzessionsverfahren') does not comply with EU law. This in itself leads to the licensing requirements not being applicable, according to the case law of the European Court.
He said: "The severity of depriving operators and consumers of a contractual basis is likely the most significant impact. It deprives the basis of service freedom, and therefore is much more severe than many of the fines or penalties imposed on operators."
For the German Sports Betting Operators Association (DSWV), submitting this case to the European Court marks a positive development.
DSWV President Mathias Dahms said: "The decision by the Federal Court (BGH) to refer this case to the European Court indicates the need for clarification under European law."
"We believe that the European Court will, as in the past, make decisions in favor of the interests of service providers and the freedom to provide services in Europe."
