Germany Loss Refund Lawsuit Sent to the ECJ

Earlier in the month, the Federal Court of Justice of Germany (BGH) was supposed to hold a hearing on the matter of whether unlicensed gambling operators should be asked to reimburse players for their losses.

The hearing has since been canceled on the reason that the defendant, a sports betting operator in Austria, decided to withdraw its appeal.

All German Civil Courts Asked to Suspend or Submit

According to the decision made by a regional court on these lawsuits related to player reimbursement, all German civil courts will be forced to suspend or submit, including the BGH. 

German law firm Hambach & Hambach led the proceeding.

According to the said decision, all online casino and sports betting issues connected to European Union laws will be heard by the European Court of Justice (ECJ). 

The ECJ will be responsible for making the final decision on these cases.

In the meanwhile, the BGH received criticism for allegedly hesitating to send a referral to the ECJ, since it did not suspend nor submit during a March ruling in a case regarding sports betting. 

Reimbursement Ruling Might Set Troubling Precedent

Hambach & Hambach partner, Claus Hambach, together with senior associate Phillip Beumer, think a ruling to refund players’ losses might set a dangerous precedent in the country.  

Since mass media reports have already picked up on the FCJ’s note, and following claims from representatives of the “player claim industry,” a “deluge of complaints and court cases” could follow.

Hambach & Hambach expressed concern that, if players are reimbursed by unlicensed operators, it would only lead to an additional rise in the black market’s popularity.

This is because players would regard it as an incentive to opt for unregulated operators since the “risk of loss” would vanish.

According to a 2023 study by the University of Leipzig, close to 50% of online gambling operations in Germany take place via offshore operators.

This same data showed that around three-quarters of online revenue was scooped up by black market operators, resulting in tax losses of hundreds of millions.

This determined the German Online Casino Association and the German Sports Betting Association to ask the German gambling regulator to encourage players to use licensed operators by making them more appealing.

Last month, we announced that Betano might have to refund a player’s EUR 12,000 loss as the FCJ was getting ready to announce its final ruling on the case.

At the time of the wagers, in 2018, the operator did not hold an official license to operate in Germany, which prompted the lengthy lawsuit.