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The floodgates are poised to open in Austria as the Court of Justice of the European Union (CJEU) looks likely to force gambling companies that have retreated to Malta back to Austria to face thousands of player refund lawsuits.
A recently published advocate general opinion suggests the CJEU will likely rule that all claims by players attempting to reclaim their losses from the Austrian offshore market can be dealt with to their completion by local courts.
Until now, companies have demanded that cases be transferred to Malta, where online casino operators say they are licensed and headquartered, and where the government has put in place measures to protect them.
That strategy could be upended by the “Wunner case”, which asks the CJEU to decide whether Austrian or Maltese law applies to a player-loss claim against a now defunct Malta-based operator named Titanium, as well as two directors of that same company.
Europe’s top court is yet to issue its final ruling, but on June 12 published the opinion of advocate general Nicholas Emiliou. A so-called AG opinion is not binding, but more often than not indicates which way judges will rule.
Emiliou takes the view that the “damage” in the case took place when the gambler placed bets with Titanium. Under EU law, he said, that means the issue is firmly within Austria’s jurisdiction.
Company directors and the Maltese government are promoting a “legal fiction” by claiming that the gambling actually took place in Malta, on the grounds that Titanium’s servers and infrastructure were based there, Emiliou said.
A ruling that matches Emiliou’s view would circumvent issues created by Malta’s highly controversial Bill 55.
The bill, now an article of Malta’s gambling law, has effectively blocked rulings against online gambling operators from being transferred to Maltese courts from Austria and other EU countries.
Bill 55 is facing its own legal assault from the European Commission, which has launched infringement proceedings against Malta because the legislation violates principles of EU law.
But an adverse ruling for the gambling industry in the Wunner case would also radically reduce Bill 55’s effectiveness by forcing companies back to the courts in Austria.
In further bad news for the industry, if the CJEU judgment matches the AG opinion, it would also open up company directors to direct litigation - a fate they have so far avoided in the years-long player refund saga, but one that has long been dreamt of by litigation firms.
Lawyers with massive pools of player claims on their books say they would rather see them settled en masse, rather than moving through the courts with every single case.
For this reason, among others, at least one lawyer involved in backing player claims told Vixio he had been seeking ways to pressure executives.
Faced with legal consequences for senior leadership if cases run to their conclusion, he theorised, gambling operators will be compelled to pay out.
The AG opinion was described by a separate leading figure from the player claims sector as a development that “hurts even more for the [gambling] industry” than the announcement of European Commission infringement proceedings.
The final verdict of the court may not be known for some time, as there is typically a gap of several months between the publication of an AG opinion and the judges’ official ruling.
If, as in the majority of cases, the judges agree with the view of the advocate general, lawyers representing players will need to return to the Austrian courts to have new judgments issued.
In many cases, they may also choose to file additional claims against the directors of the gambling companies in question.
A judgment in line with the AG would also mean that lawyers can file new claims against the larger corporate entities that own a specific operator that is under fire, but may have since been wound up.
That would mean “no more hiding behind a shell company in Malta,” one legal expert told Vixio.
Meanwhile, yet another CJEU player refund case has begun its journey at the EU’s apex court, this time with potentially massive significance for Germany.
The so-called Mr Green case is named for the operator acting as defendant, which is now owned by Evoke.
The case will also consider matters of jurisdiction when it comes to grey market gambling and efforts to force companies in Malta to pay sums demanded of them by German courts.
Hearings began in that case on June 19, with no outcome expected for several months.
The Mr Green case is one of two proceedings relating to German player refund claims currently before the CJEU.
Another case involving lottery betting operator Lottoland began in April, with no AG opinion or ruling issued to date.
Between now and the next stage of these various legal cases, the industry will learn how Malta intends to respond to pressure from the European Commission.
The Maltese government has until mid-August to issue its response. The commission is likely to take Malta to court two months after that, if it has not revoked Bill 55’s effects.
