Payments to the operator of an illegal online gambling game can be reclaimed — is a wave of lawsuits now threatening operators? – LG Köln, Urt. v. 19.10.2021 (16 O 614/20):
In principle, the operation of online gambling in Germany requires the permission of a German authority. In the absence of such a permit, operators are not only threatened with official trouble. As now emerges from a ruling by the Regional Court of Cologne, payments for online games of chance that are unauthorised in Germany can even be reclaimed. Thus, at least according to the first-instance decision of the Cologne Regional Court, a breach of the obligation to obtain a permit constitutes illegal conduct, which can lead to the invalidity of the contract between the gambling operator and the consumer and ultimately to a complete reversal of the contract.
Between 2015 and 2017, the plaintiff used the online offer of a Maltese gambling operator and made a loss of approximately €7,000. The website was operated under a German domain and in German. The operator only had a licence under Maltese law, but not under German law. In the terms of the contract, users were informed that the games of chance offered might be illegal in some countries.
The plaintiff only became aware of the ban on the games of chance offered in 2020. In the same year, the user sued for payment of the losses suffered plus interest.
The Regional Court of Cologne ruled in favour of the plaintiff user.
The defendant offered its services in German on the local market and thus targeted German consumers. When offering games of chance on the Internet, it was not the operator’s domicile that mattered, but the user’s domicile. The defendant thus organised games of chance in Germany, for which a German licence would have been necessary. A licence granted in another EU country was not sufficient. Particularly against the background of the European internal market and the freedom to provide services applicable there, the court felt an increased need for justification. Although it addressed the relevant problems in this context, it ruled in favour of the defendant in each case.
In principle, a claim for repayment would be excluded if the consumer was aware of the prohibition. However, the mere reference to possible illegality in the context of the general terms and conditions is not sufficient for this.
Although it is only a first-instance ruling, the decision of the Regional Court of Cologne reveals some risks for operators of online gambling. It is clear that the ruling will put water on the mills of user-protection lawyers, who have long been busy preparing a wave of lawsuits.
Moreover, such cases should be critically assessed with regard to the freedom to provide services within the framework of the European Single Market. In the context of the recent reform of the State Treaty on Gambling, the course has been set in Germany towards an increasing liberalisation of online gambling.
Operators should in any case be prepared for an increase in litigation. The author Thomas Hertl will be happy to assist you in this regard.