Users of online gambling services within the European Union can sue betting operators for reimbursement of their losses if such gambling was prohibited in their home country when they placed the bets, the Court of Justice of the European Union (known by its acronym ECJ) ruled on Thursday.
Its ruling on this and another question – whether member states have the right to individually outlaw or ban such gambling, even if EU law allows it – paves the way for a German citizen to seek reimbursement for losses he suffered when such gambling was illegal in his home country.
The fact that Germany’s laws have changed, meaning that such gambling is now permitted, has no bearing on the case, ECJ ruled.
What was the matter about?
A German resident is seeking compensation in domestic courts for losses he suffered on online slot machines and lottery prediction betting between June 2019 and July 2021, when such gambling was not legal in Germany.
The challenge to the German case was launched in fellow EU member Malta, where the betting company was licensed, and the Maltese courts referred three questions on EU law to the ECJ:
- Can member states outlaw online gambling while EU law does not?
- Do EU laws prevent gamblers from seeking compensation for their losses on the grounds that they should not have been allowed to place bets?
- Does a subsequent change in laws to allow this type of betting like in Germany affect this?
What decision did the court give?
Online gambling is basically classified as a service which must generally be available across borders within the European Union and its wider free trade area, the European Free Trade Association (EFTA).
But the ECJ said the freedom to provide services could be restricted for “consumer protection and the protection of social order”.
It states that online gambling qualifies for such exemptions – even more so than physical betting venues such as bookmakers or casinos – because it poses a particular risk to consumers “due to the permanence of access, the isolation and anonymity of the player, the absence of social control, potentially unlimited frequency and its attractiveness to young and vulnerable individuals.”
The ECJ also said that Germany later relaxed its online gambling laws in July 2021 so that such betting would not be affected by the problem.
Furthermore, the court ruled that “EU law … does not prevent a civil action for restitution of lost bets,” meaning that gamblers can demand refunds and may be eligible for them if domestic courts rule in their favor.
Thursday’s ruling could pave the way for similar situations for other Germans, or EU residents, who lost money in illegal online gambling trying to recoup their losses.
Edited by: Wesley Dockery