Gambled, lost, sued – players of illegal sports bets are repeatedly taking legal action before German courts to recoup their losses. A ruling by the Federal Court of Justice could trigger an even greater wave of lawsuits.
Anyone who made a wrong guess on illegal sports bets years ago can hope for a refund of the bets they lost. After numerous German courts have dealt with similar cases, the Federal Court of Justice (BGH) is now examining whether an online sports betting provider without a valid German license must reimburse a player for their losses. Why could the ruling affect thousands of cases and why are things looking good for players ahead of the hearing on Thursday? The most important questions and answers:
Since when are sports betting allowed in Germany?
Until mid-2012, apart from isolated cases of old GDR licenses, only state providers were allowed to organize sports betting in Germany, says lawyer and gambling law expert Lennart Brüggemann. In order to dry up the black market, the federal states introduced a new state gambling treaty in 2012, which also allowed for private providers.
“The problem, however, was that for over eight years it was not possible to issue a single sports betting license to the interested private providers,” says Brüggemann. The reason for this was concerns raised by the administrative courts about the official procedure. Providers remained in a legal limbo for years. It was not until 2020 that the first ones received the license. The following year, the current State Treaty on Gambling came into force, which officially legalized sports betting under certain conditions.
What is the specific case about?
On Thursday, the Federal Court of Justice will hear a man’s lawsuit against the betting provider Tipico. The man had taken part in Tipico’s sports bets from 2013 to 2018 and lost more than 3,700 euros, which he is now demanding back. He argues that the sports bets were illegal and the betting contracts were invalid because the provider did not have permission from the responsible German authority at the time. Tipico had applied for such a license to organize sports betting, but did not receive it until 2020. Negotiations on a settlement failed, so the Federal Court of Justice must now decide. It is unclear whether a verdict will be made on Thursday.
What are the plaintiff’s chances of success?
So far, the player has not been successful with his lawsuit. The Ulm Regional Court argued that Tipico had violated the provisions of the State Treaty on Gambling of 2012, but that the betting contracts were valid. The fact that the Federal Court of Justice may see things differently is evident from a ruling published at the beginning of April on a similar case. The Senate assumed that another provider had violated the rules of the State Treaty on Gambling and that the contracts between the provider and the player were therefore void. The plaintiff may have a claim for repayment, the court concluded.
Even though this decision was not a judgment but merely an assessment to prepare the parties for the oral hearing, experts expected that it represented more or less the planned judgment in the case. However, this judgment never came about because the provider withdrew its appeal. Player representatives saw this as an admission of guilt and criticized the provider for wanting to prevent a landmark judgment in the interests of the players.
What impact could the BGH ruling have?
A consumer-friendly ruling by the BGH could trigger an even greater wave of lawsuits than there already is. Thousands of similar cases are already pending in German courts. This is also because law firms and some companies specialize in this type of lawsuit. The companies put players in touch with lawyers and cover the costs of legal action in return for a commission if they are successful. This is also the case with the company Gamesright, which, in addition to the proceedings on Thursday, says it is currently financing around 1,500 similar lawsuits against sports betting providers. A ruling in favor of the players could have a great impact, says co-founder Hannes Beuck. “We assume that the majority of affected players, who are currently waiting and watching, will then demand their money back. So far, only a fraction of the affected players have done this.”
How common are sports betting today?
According to the current gambling atlas, five percent of the population took part in sports betting in 2021 – a doubling within two years. Gross gaming revenue from sports betting was 1.4 billion euros in 2022. By comparison, it was 4.1 billion euros for lotteries and 4.8 billion euros for slot machines. The growth in sports betting has been strong since it was legalized in autumn 2020, it continues. According to the Joint Gambling Authority of the States (GGL), 30 sports betting providers now have a license.
Would a BGH ruling be the final word?
Possibly not, because the European Court of Justice could also still deal with the issue. For example, the Erfurt Regional Court announced in April that it would turn to the judges in Luxembourg with several questions about sports betting. “After the Federal Court of Justice comes the European Court of Justice,” said Tipico’s lawyer Ronald Reichert, who is leading the case. The legal questions would definitely be clarified by the European Court of Justice. The Federal Court of Justice has not yet considered a referral to the European Court of Justice necessary. The relevant questions have been answered, it said in April.
Source: Stern
