EU Lawsuit Marks Pivotal Moment for Player Refund Claims

A ground-breaking case in the Court of Justice of the European Union (CJEU) could reshape the future of online gambling refunds in Germany and reverberate across Europe’s broader gaming landscape. A resolution could decide the fate of thousands of pending refund cases that remain on hold, waiting for clarity.

Lawsuits Remain Stuck in Legal Limbo

Case C-440/23 revolves around a dispute between Malta-based company Lottoland and one of its German players who seeks to recover losses incurred at a time when Germany banned most forms of online casino gambling. The case had a turbulent history, initially filed in Germany and later transferred to Malta. It now stands before the EU’s highest court, with potential refunds worth billions of euros hanging in the balance.

This dispute arose due to a contentious regulatory gap in German gambling legislation. Before the 2021 Interstate Treaty on Gambling, which legalized and regulated online casinos, gambling in Germany was effectively prohibited. However, several operators, including high-profile companies like Tipico, continued servicing German customers under EU licenses from countries such as Malta, arguing they were following the EU’s internal market rules.

Under German law, player losses incurred with unlicensed operators may be subject to refunds. Thousands of claimants have sought legal action, with prominent law firms heavily investing in pursuing these cases. However, industry representatives argue that Germany’s licensing vacuum breached EU free trade principles, making contracts with players during this period valid.

A Final Verdict Could Reshape the EU’s Gambling Landscape

According to a recent Vixio report, legal experts remain divided regarding this case, with many arguing that the ruling could go either way. Two additional refund-related cases pending referral to the CJEU further complicate the situation. Although separate, these lawsuits challenge overlapping principles about regulatory compliance and consumer protection and could impact C-440/23’s resolution.

A prediction of the decision, even shortly before the date, is only speculation. It remains to be seen which line of argument the CJEU will follow. There have been surprises that no one expected.

Alicia Pointner, attorney at law firm Melchers 

Operators can also fall back on Malta’s controversial Bill 55, which bars foreign judgments for player refunds from being enforced in Maltese courts. February saw Maltese judges reject Austrian court refund rulings, setting a precedent that shields companies from liability. However, that protection may not last forever, especially if the European Commission finds Bill 55 incompatible with EU law.

A ruling upholding Germany’s earlier ban could open the floodgates to retroactive player claims in other countries with similar regulatory histories. Conversely, a decision validating the legitimacy of operators during the licensing grey period could reaffirm the validity of their business decisions, protect them from further litigation, and give them the legal breathing room to focus on growth.