New movement in online gambling mass proceedings: BGH suspends appeal proceedings
Companies and courts in Germany have been increasingly confronted with so-called “mass proceedings” in recent years. In addition to claims for damages from consumers in the so-called “diesel emissions scandal”, in the context of flight delays or “data leaks”, which have also attracted a great deal of attention beyond the legal community, the recovery of losses from supposedly “illegal” online gambling has also become a major field of activity for self-appointed “consumer protection lawyers”.
A recent ruling by the German Federal Court (BGH) could have a major impact on the progress of the latter proceedings.
Background
In these proceedings, the plaintiffs, who are (former) gamblers, are claiming back stakes lost in online gambling from gaming providers that did not have a German gambling licence at the time. Until July 2021, it was not possible to apply for a licence for online gambling (such as virtual slot machines) in Germany due to the lack of regulations in the State Treaty on Gambling (“Glücksspielstaatsvertrag”) in force until then. There was a so-called “total online ban” on gambling. However, many providers had a “licence” to offer online gambling in other European member states with more liberal gambling laws, such as Malta. The main question brought before the courts is the compatibility of the German “online ban” set out in Section 4 GlüStV (2012) with the freedom to provide services under European law (Art. 56 TFEU). Specifically: Can a gambling provider operating under a licence/concession from another EU member state be prohibited by national regulations from offering the same online games of chance in Germany?
We have already reported on the “wave of litigation” starting in 2021 and, in particular, the European law dimension of these proceedings.
Nevertheless, German courts have so far not considered it necessary to refer the questions in dispute to the ECJ for a ruling and to initiate a preliminary ruling procedure in accordance with Art. 267 TFEU. Instead, such a referral was only made in July last year by the Maltese court Prim’Awla tal-Qorti Ċivili. This court specifically referred the matter to the ECJ regarding, among other things, the compatibility of the German provisions in the GlüStV with the freedom to provide services under EU law (Case C-440/23).
Suspension of proceedings
As the questions referred by the Maltese court are also decisive for the similar cases to be decided before German courts, it is generally possible to order a stay of these proceedings in accordance with Section 148 (1) German Code of Civil Procedure (ZPO) (by analogy) until the ECJ has rendered its decision. However, the decision to suspend proceedings is at the discretion of the deciding court. So far, however, the German courts of lower instances have been very cautious in their use of this option. Only one decision of the Magdeburg Regional Court is publicly known, which has at least considered such a stay of proceedings (Magdeburg Regional Court (10th Civil Chamber), decision of 2 October 2023 – 10 O 597/23).
Decision of the BGH
The BGH has now taken a clearer stance: An appeal against a decision by the Higher Regional Court of Hamm is currently pending before the BGH under case no. I ZR 53/23. By order of 10 January 2024, the BGH suspended the appeal proceedings in accordance with Section 148 (1) ZPO until the ECJ has ruled in the pending preliminary ruling proceedings in Case C-440/23 (see BGH press release from 17 January 2024).
Our assessment
In our opinion, the significance of this decision by the BGH should not be underestimated for currently pending and future similar proceedings. It is still basically up to the deciding (instance) court whether to suspend proceedings in accordance with Section 148 (1) ZPO. However, as a clarifying decision by the BGH was expected and the BGH has suspended the pending appeal proceedings with reference to the European preliminary ruling procedure, many courts of lower instances are likely to follow the same path. For plaintiff players and defendant gambling companies, this would mean a sometimes considerable delay in the proceedings. Nevertheless, this would also have the positive effect that the German courts would in future be able to decide on the basis of supreme court case law, particularly in matters relating to European law.