Several companies offered sports betting for years before 2020 without the required license. Are players entitled to a refund? A supreme court decision is now pending on this.
Time and again, once unlucky players go to court to reclaim losses from illegal sports betting. This is because many providers lacked the required license from the responsible German authority for years before 2020. After numerous German courts have already dealt with such player lawsuits, a clarification by the highest court may now be pending. The Federal Court of Justice (BGH) wants to decide whether an online sports betting provider without the required German license has to reimburse a player’s lost bets. 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 that also allowed for private providers. But for eight years, no interested private provider was granted a sports betting license, says Brüggemann. The reason was concerns from the administrative courts about the official procedure.
Providers therefore remained in a legal limbo for years. It was not until 2020 that the first ones received a 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 rule on 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 then 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. The litigation funder Gamesright has now bought the right to sue from the original plaintiff. (Ref. I ZR 90/23)
What are the chances of success of the lawsuit?
So far, the player’s lawsuit has been unsuccessful. The Ulm Regional Court argued that Tipico had violated the provisions of the State Treaty on Gambling in force at the time, but that the betting contracts were still valid. However, the fact that the Federal Court of Justice might see things differently was already apparent from an advisory decision published in early April on a similar case, which supported the players – but was not yet a verdict.
In the case now to be clarified by the Federal Court of Justice, presiding judge Thomas Koch also said in the hearing in June that, according to a preliminary assessment, the Senate was inclined to regard such sports betting contracts without a license 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 this have?
A consumer-friendly ruling by the Federal Court of Justice could trigger an even greater wave of lawsuits than there already is. Thousands of similar cases are already pending in German courts. This is partly because, in addition to Tipico, other betting providers offered sports betting years ago in a legally unclear situation. On the other hand, law firms and some companies have specialized in this type of lawsuit – such as the company Gamesright, which is suing here. A ruling in favor of the players could encourage many of those affected to reclaim their losses, says co-founder Hannes Beuck. “We assume that after a positive ruling we can achieve faster and higher repayments.”
Would a BGH ruling be the final word?
Possibly not, because the European Court of Justice could also still deal with the issue. Tipico is of the opinion that allowing the action would be “in blatant contradiction” to the case law of the ECJ. In the BGH hearing, Tipico’s lawyers appealed to the Senate to submit questions to the Luxembourg judges on the controversial issue. That is also conceivable, explained Judge Koch at the end of the hearing. But even if the BGH does not submit the case to the ECJ itself, other courts could do so. “After the BGH is before the ECJ,” Tipico lawyer Ronald Reichert said before the hearing. The legal questions would definitely be clarified by the ECJ.
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.
Source: Stern
