German Sports Betting Association backs ruling on grey-market reimbursement
Federal Court of Justice refers case to the European Court of Justice over whether a player should be refunded losses incurred before the German market regulated
The German Sports Betting Association (DSWV) has backed the Federal Court of Justice’s (BGH) decision to refer legal questions concerning a customer’s refund request for gambling losses incurred prior to regulation in Germany to the European Court of Justice (ECJ).
The dispute centres around a customer seeking reparations in relation to losses sustained with a grey-market operator before the German market was regulated in 2021, with the plaintiff involved citing losses totalling €3,719.26 (£3136).
The case involves the Malta-based defendant offering online sports betting through a German language website with a German top-level domain. The plaintiff took part in online sports betting with the unnamed defendant between 2013 and October 2020.
During that seven-year period, the defendant did not hold the relevant licence to offer online sports betting in Germany, though it had applied for one under the State Treaty on Gambling 2012, but never received it, as outlined in the update from the BGH.
The defendant was only granted a licence on 9 October 2020, under a new licensing procedure based on the version of the State Treaty on Gambling 2012 applicable from 1 January 2020.
The plaintiff argued that because the defendant offered online sports betting without the required licence, he is entitled to repayment of the €3,719.26 losses incurred during the timeframe.
The BGH release also reveals that the defendant did not comply with the rules surrounding a maximum monthly stake limit per player, which typically is limited to €1,000.
The case was dismissed by the district court and the regional court rejected the plaintiff’s argument, before the defendant then requested the Court of Appeal to dismiss the case, but the plaintiff pushed the case one step further in the direction of the BGH, who have since called in the help of the ECJ.
An update issued on 25 July by the BGH details that the ECJ will now be tasked with trying to determine whether a different assessment of the case is required on the grounds that the defendant had already applied for a licence previously, under the previously mentioned treaty, in what was a licence granting procedure that has since been deemed in breach of EU law.
The update also explains how section 134 of the German civil code means that due to the defendant’s offering of online sports betting without a licence, that action results in the invalidity of the sports betting contracts between the plaintiff and the defendant.
In response to this development, the DSWV has claimed the “referral to the ECJ is an important step towards legal certainty in the interests of all parties involved” before noting “the decision of the Federal Court of Justice to refer the case to the ECJ shows that a clarification of European law is necessary”.
DSWV president Mathias Dahms added: “We are confident that the ECJ will rule in favour of the providers and the European freedom to provide services, as it has already done in the past.”
This is not the only case involving reparations related to grey-market activity in Germany, with the BGH already suspending two parallel proceedings concerning the same issue until the ECJ has made a decision on this case in question.