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A regional court has referred questions over German player refund lawsuits on sports betting to the Court of Justice of the European Union (CJEU), and it has criticised another German court’s intention to rule without clarification from the European court.
Saying that civil repayment lawsuits regarding sports betting are likely to become “a mass phenomenon” without clarification, the regional court in Erfurt has referred three questions to the European Union court.
“It seems sensible and necessary to bring all EU law questions and problems requiring clarification — regarding online sports betting in the present case as well as the related online casino in numerous other pending cases — to the European Court of Justice, which has the final word here,” the regional court wrote in an April 29 ruling.
The regional court said it was “incomprehensible” that the Federal Court of Justice deferred an online casino refund case after an intervention from Malta, but that court was preparing to rule on a sports-betting refund case without guidance from the European court.
“Particularly in highly complex gambling law, assistance and clarification from the European Court of Justice are required,” the regional court wrote.
Online gambling companies in Germany, Austria and now the Netherlands have been hit with a flood of lawsuits seeking refunds for losses because online gambling was illegal when they occurred, and a European court ruling could be influential.
Refund suits are a huge matter for many European online gambling companies. 888 Holdings, for example, has set aside £116m to cover legal and regulatory costs in Austria and Germany, after setting aside £86m in 2022.
The regional German court was alluding to a case before the Federal Court of Justice sitting in Karlsruhe, in which it had been poised to rule on a case of a player seeking refunds for sports-betting losses of €12,000, and it had indicated that it was inclined to rule in favour of the player.
The case had been set for hearing on May 2, but the hearing was cancelled when the online gambling defendant withdrew its appeal.
The stance by the federal court was a surprise to lawyers in the industry as players who lost money in online casino games are viewed as having a better argument because there was no licensing system for online casinos until 2021 when the interstate gambling treaty took effect.
In contrast, operators who applied for a sports-betting licence under a 2012 sports-betting licensing system that never took effect were thought to have a better legal defence because they could argue they attempted to obtain such a licence.
The regional court is asking the European court about the relevance of a 2016 CJEU case, the so-called Ince ruling, which said that the 2012 German sports-betting law setting up a monopoly was incompatible with European law and could not be enforced.
Ronald Reichert, who defends online gambling companies in the civil suits, wrote that it would be a “big surprise” if the European court today had a different opinion from the 2016 ruling.
“There is much to suggest that the players' lawyers originally assumed this themselves,” said Reichert of the Bonn law firm Redeker Sellner Dahs. “It is no coincidence that their lawsuits only rarely concerned sports betting”.
Also significant to the issue is the controversial gambling law amendment in Malta that would shield Malta-based operators by declaring that only Maltese courts can enforce judgments against them.
A Maltese court has referred one case to the European court.
In the Netherlands, there are 50 to 60 player refund suits pending, with two judgments so far favouring the player, said Roelien Van Neck of Bird & Bird law firm.
It is a “wait and see” situation on which way Dutch courts are inclined, she said.
