BGH: Upcoming landmark decision regarding the repayment of lost online sports betting stakes
In recent years, providers of online gambling and online sports betting have been increasingly exposed to a flood of lawsuits from (former) players seeking the repayment of lost gambling or betting stakes. This is due to the fact that under the old German Gambling Treaty (Glücksspielstaatsvertrag, GlüstV), which was in force until 2021, it was not possible for providers of online gambling such as virtual slot machines to obtain a German license. Providers of online sports betting were only able to do so under certain conditions. Nevertheless, many providers operating under EU member state licenses were present on the German market. The German supervisory authorities did not raise any significant objections in this regard.
The controversial and decisive question of whether the gambling or betting contracts concluded are null and void due to the lack of a German license and whether this entitles players to a refund of lost stakes, or whether this is contrary to the freedom to provide services under European law, has now reached the highest German and European courts. While the German Federal Court (BGH) suspended proceedings on online gambling in January of this year because a Maltese court had referred crucial questions to the ECJ for clarification in Case C-440/23 (decision of January 10, 2024, ref. I ZR 53/23, we reported ), an oral hearing on online sports betting was held before the BGH for the first time on June 27, 2024 (ref. I ZR 90/23).
In an initial assessment, the Senate indicated that it was inclined to consider the betting contracts null and void. This gambler-friendly legal opinion was previously stated by the BGH in the area of sports betting in a reference decision in March of this year (decision of 22.03.2024, ref. I-ZR 88/23).
It is questionable whether a decision that creates legal certainty for players and betting providers will actually be issued on the announcement date scheduled for July 25, 2024. A referral to the ECJ would actually be appropriate here in order to clarify the decisive questions regarding the compatibility of German gambling law regulations with EU law.
Should the BGH decide against such a referral, however, the last word may not yet have been spoken: In a ruling dated May 8, 2024 (Ref. 8 O 391/23), the Regional Court of Erfurt has already announced its intention to suspend similar proceedings and to refer the relevant questions on the interpretation and application of EU law in the area of sports betting to the ECJ itself for clarification.
This is reminiscent of the so-called “Diesel emissions scandal”. In this mass proceedings complex, which also attracted a great deal of publicity, almost all instance courts and the German Federal Court refused to refer questions relevant to the decision to the ECJ. Only after the Ravensburg Regional Court initiated a referral and a decision was made by the ECJ (of 21.03.2023, ref. C-100/21) did the BGH and the courts of lower instances change their previous legal opinion.
It remains to be seen, whether this type of “legal history” will also be repeated in the area of online sports betting.
In pending proceedings with regard to online gambling, we recommend that the gambling providers work towards a stay of proceedings until a decision in the ECJ case C-440/23. A decision in favor of the providers should render all lawsuits invalid. The risk here lies solely in the ongoing interest on the amounts claimed. Alternatively, reasonable settlement negotiations can of course be conducted. In any case, the players and their representatives now also face an increased risk.
Should an ECJ referral be made in the sports betting cases, the same procedure is recommended there.
Our specialists, Thomas Hertl and Dr. Florian Eckert, are pleased to advise you, also with regard to the involvement of legal tech in the economic handling of such mass proceedings.