ECJ to decide on German gambling loss lawsuits

Cases from customers seeking refunds for gambling losses will go to the European Court of Justice.

Germany.- The question of whether gambling operators must refund customers’ losses from before Germany regulated online gambling has been referred to the European Court of Justice (ECJ). Several class action suits claim losses should be invalidated because gambling was illegal at the time.

A regional court has ruled that all German civil courts must submit such cases to the ECJ for the final decision. This includes cases arriving at the Federal Court of Justice, which was due to hear a case this month until the operator involved withdrew its appeal.

Hambach & Hambach, a law firm defending operators, has argued that granting reimbursements to players could lead to a deluge of cases, with law firms taking on class actions for both online casino and sports betting losses. It also claims that a ruling in favour of customers could lead more people to gamble with unlicensed operators today under the belief that they may be able to recoup losses.

Last year, a study commissioned by two industry groups found that almost half of gambling activity in Germany is through unlicensed operators. The online casino association DOCV and the sports betting association DSWV had commissioned the economist Gunther Schnabl of the University of Leipzig to conduct the research.

According to the findings, the channelisation of players to regulated online gambling was 50.7 per cent in March 2023. Among black market sites, defined as those that offered content in German accessible with a German IP address without using a VPN, 28.9 per cent of traffic was to unlicensed providers based in the EU and 19.9 per cent to operators based elsewhere. The report estimates that three quarters of online gambling revenue is taken by the black market.