Users of online gambling services within the EU can sue the betting operator for reimbursement of losses if such gambling was prohibited in their home country when the bets were placed, the Court of Justice of the European Union (ECJ) ruled.
The ECJ answered three questions referred by Maltese courts in a dispute over a German resident seeking compensation for losses on online slot machines and lottery-prediction bets made between June 2019 and July 2021, when such gambling was illegal in Germany. The betting company was licensed in Malta.
The questions were whether member states may outlaw online gambling despite EU law, whether EU law prevents gamblers from seeking compensation on the basis that the bets should not have been allowed, and whether a subsequent change in domestic law (Germany relaxed its rules in July 2021) affects the matter.
The court confirmed that online gambling is generally a service, which would normally be freely provided across the EU and the European Free Trade Association area. However, it held that the freedom to provide services may be restricted for reasons of “consumer protection and the protection of the social order.” The ECJ found online gambling qualifies for such an exemption to a greater extent than physical betting locations because it poses particular risks to consumers “due to the permanence of access, the isolation and anonymity of the player, the absence of social control, the potentially unlimited frequency, and its attractiveness to young and vulnerable persons.”
The ECJ also said Germany’s later decision to permit such betting from July 2021 does not affect the legal assessment of bets placed while they were illegal. Crucially, the court ruled that “EU law does not preclude … a civil action for restitution of the stakes lost,” meaning gamblers can pursue refunds in domestic courts and may be eligible for reimbursement if those courts so decide.
The ruling paves the way for the German claimant and potentially other EU residents who lost money on online gambling that was illegal in their home country to seek to reclaim their losses.