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 dealt with similar cases, the Federal Court of Justice (BGH) heard the question on Thursday of whether an online sports betting provider without a valid German license must reimburse a player for their losses. Why a ruling could affect thousands of cases and why the signs are good for players – 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 expert in gambling law, 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 heard a man’s lawsuit against the betting provider Tipico. The man had participated in Tipico’s sports bets from 2013 to 2018 and lost more than 3,700 euros, which he demanded back. In his opinion, the sports bets were illegal and the betting contracts invalid because the provider did not have the necessary permission from the responsible German authority. Tipico had applied for a license, but did not receive it until 2020. It was initially unclear when the Federal Court of Justice would announce a decision.
What are the chances of success of the lawsuit?
So far, the player’s lawsuit has been unsuccessful. The Ulm Regional Court argued that although Tipico had violated the provisions of the State Treaty on Gambling of 2012, the betting contracts were valid.
That the BGH might see things differently was already apparent from an advisory ruling published at the beginning of April on a similar case, which gave the players a boost. Even though this ruling was not a ruling, but merely an assessment to prepare the parties for the oral hearing, experts expected that it more or less represented the planned ruling in the case at the time. However, the provider withdrew its appeal before a ruling could be made.
In the case now being heard by the Federal Court of Justice, the presiding judge of the first civil senate, Thomas Koch, also explained on Thursday in Karlsruhe that, according to a preliminary assessment, the senate was inclined to regard such contracts without a so-called concession as void, even if a permit to organize sports betting had already been applied for. Players could then be entitled to a refund.
What impact could the BGH ruling have?
A consumer-friendly ruling by the Federal Court of Justice could trigger an even greater wave of lawsuits than we already have. 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 the case is successful.
This is also the case with the company Gamesright, which in this case bought the player’s claims and is now acting as plaintiff against Tipico. A ruling in the players’ favor could have a great impact, says co-founder Hannes Beuck. “We assume that the majority of affected players, who are currently waiting and observing, 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. On Thursday, Tipico’s lawyers appealed to the Senate to submit the controversial issue to the judges in Luxembourg. The Federal Court of Justice has not yet considered it necessary to refer the matter to the European Court of Justice. The relevant questions have been answered, it said in the April advisory decision.
However, in the current case, a referral to the ECJ is also conceivable, explained Judge Koch at the end of the hearing. There are questions that did not arise in the other proceedings. And even if the BGH does not refer the case to the ECJ, other courts could do so. “After the BGH is before the ECJ,” said Tipico’s lawyer Ronald Reichert before the hearing. The legal questions would definitely be clarified by the ECJ.
Source: Stern
