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The first in a trio of pivotal player refund cases at the European Court of Justice (ECJ) has been heard, with its outcome a crucial turning point in that ongoing saga and one that could potentially shake the foundations of European gambling policy.
April 9 saw a key case in the ongoing battle over player refunds heard at the European Court of Justice in Luxembourg.
Case C-440/23 sees Lottoland questioning whether Germany’s former online gambling regime, before the current interstate treaty which took effect in 2021, was against EU free trade laws.
If it is found to be in breach, the industry hopes the ruling will serve to block German player refund cases entirely, because they can argue that the regulations which outlawed their presence in the German grey market were not compliant with EU standards.
Specifically, the case considers the question of whether a Maltese licence was sufficient to do business in the German market at a time when it was not possible for operators to apply for online slots licences.
German lawyers who witnessed the hearing say that the outcome is still highly uncertain, but that some details of what was presented hint at oncoming developments.
In particular, the case could provide much-awaited clarity on Malta’s so-called Bill 55, which has blocked player refund suits decided in other EU nations from being enforced against gambling companies in Malta.
The European Commission representative told the ECJ that Bill 55 could potentially be incompatible with EU law and that it may need to be formally examined before judges make a final ruling. Lawyers from Malta argue that Bill 55 is not relevant to the case and should be ignored.
The commission has been investigating Bill 55 for almost two years, but has yet to issue any kind of findings.
“At the moment, the situation remains very much open,” said Jan Feuerhake, a partner at the Hamburg office of law firm Taylor Wessing. “In the oral hearing, the Court did not give a hint in which direction it would decide.”
Alicia Pointner, a lawyer with law firm Melchers, agreed the case was hard to call, both in terms of its final result and its eventual scope.
“It is difficult to assess how the court will rule. The questions—including those posed by the Advocate General—made it clear that the decision may be limited to the specific circumstances of the individual case. Whether this will actually be the case remains to be seen,” she said.
However, Pointner noted that some of the possible outcomes could be earth-shattering for European policy at large, even beyond gambling, if Germany’s former regime is found to have been illegal.
“The ruling could have far-reaching implications for how EU member states balance national regulatory sovereignty with compliance with EU law. It could set a precedent for other sectors where national rules conflict with EU principles and require a reassessment of regulatory approaches in various industries,” she said.
A ruling in favour of Lottoland would also open the door to similar litigation Europe-wide, Pointner predicted, as various gambling interests look to test the strength of legislation against the new case law.
As for player refund cases themselves, those involved in bringing these lawsuits against the gambling industry appear unconcerned by the outcome.
Litigation financiers say that they are continuing to push ahead with claims in Austria, Germany and the Netherlands. And while they could consider expanding their business model to other European countries, including France, for now, they are seeking to limit their exposure with so many cases pending.
If April’s hearing does not ultimately serve to unblock the thousands of currently paused cases across Germany, that exposure may remain in place until the second and third of the pending ECJ cases are heard.
These were referred by courts from within Germany and are likely to much more precisely tackle legal quandaries on which the refund cases in that country currently rest.
“The questions in these cases will be even more relevant for the current situation because it is likely that they will trigger a wave of cases that are currently suspended to go forward again,” advised Feuerhake.
The ECJ Advocate General is due to issue an opinion on C-440/23 on July 10, which Feuerhake said is usually followed by a statement from the ECJ, “signalling potential outcomes for the judgement”.
Although a final ruling may not be issued until closer to the end of this year.
