After Dutch players, German gamblers are also demanding casino refunds
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25 May 2024 •
Reading time: 2 minutes A landmark case in Germany challenging the duty of unregulated gambling operators to compensate players for losses has been referred to the European Court of Justice (ECJ).
Legal implications
A national judgment was initially planned, but the German Federal High Court (BGH) was forced to change course when an accused party withdrew its appeal. This led to the case being referred to the ECJ, in line with a regional court directive to pause or refer related cases. The situation is attracting a lot of media attention and legal experts foresee a potential wave of similar lawsuits across Germany.
The proceedings, led by law firm Hambach & Hambach, could trigger a flood of claims and attract financial backers interested in financing cases not only against casino losses, but also against sports betting. The extensive media attention contributes to the momentum and increases public and legal scrutiny.
Possible Support to the Black Market
Legal experts Claus Hambach and Phillip Beumer fear that a ruling in favor of compensation could inadvertently strengthen the black market. They argue that such a precedent could encourage players to use unlicensed platforms without fear of financial loss. This could undermine regulatory efforts and consumer protection in the German gambling industry.
Addressing challenges offshore gambling
Research from the University of Leipzig in 2023 highlights a key challenge: almost half of German online gambling activity takes place via offshore providers. This not only leads to significant losses in tax revenues, but also strengthens the black market that generates three-quarters of online gambling revenues.
In response, industry associations such as the German Online Casino Association (DOCV) and the German Sports Betting Association (DSWV) are urging regulators to increase the attractiveness of licensed offerings.
Future impact for the industry
Now that the case is before the European Court of Justice, broad implications are expected for the regulatory landscape across Europe. This crucial decision will impact how member states deal with unregulated gambling operators and protect players. It may set a precedent for the responsibilities of gambling providers and the rights of consumers within the European Union.