The European online gambling scene is witnessing significant legal developments in Germany and Malta, each posing potential ripple effects across the EU’s regulatory landscape. In Germany, the Federal Court of Justice is scheduled to address a pivotal case on May 2, 2024, concerning the reimbursement of losses incurred through unlicensed gambling operators. Concurrently, Malta’s contentious Bill 55, which shields its licensed operators from foreign legal actions, continues to stir debate and legal scrutiny across Europe.

The German Case: A Turning Point for Gambling Laws

Germany’s highest civil court, the 1st Civil Senate of the Federal Court of Justice, is preparing to make a crucial decision that could set a significant legal precedent. The case arose after a player challenged an Austria-based sports betting operator that offered services in Germany without appropriate licensing during 2018. The plaintiff argues that the betting contracts are void since the operator violated Germany’s State Treaty for Online Gambling by not adhering to betting limits and mixing sports betting with other gambling forms.

Legal experts suggest that a ruling in favour of the plaintiff could lead to a flood of similar claims. This situation is exacerbated by the extensive media coverage and the aggressive financing of claims by entities like AdvoFin, which has already recovered substantial sums for plaintiffs in related cases.

Malta’s Bill 55: Protection from Foreign Judgments

On the other hand, Malta has enacted Bill 55, aimed at protecting its gambling operators from legal actions initiated in other EU countries. This law mandates Maltese courts to refuse recognition or enforcement of any judgments against Malta-licensed operators involved in disputes within the European market. This has sparked a conflict with the Brussels Recast Regulation, which governs legal judgments across EU member states, prompting the European Commission to intervene and assess the law’s compatibility with EU principles.

Background and Implications

Malta’s Bill 55 was tabled as a protective measure in response to numerous legal actions taken against Malta-based operators in various European countries. Operators argue that their activities are safeguarded under the Treaty of the Functioning of the European Union, which advocates the free movement of services across Europe. However, this stance has been contested by several European governments and regulators, citing the 2017 decision by the European Commission to close infringement procedures in the gambling sector. This decision has been interpreted by some to mean that nations can restrict Malta-based businesses from accepting bets within their jurisdictions.

Implications for the European Gambling Market

These legal disputes highlight the complexities of regulating online gambling within the EU, where member states strive to balance national regulatory frameworks with overarching EU laws promoting service freedom. Germany’s potential move to reimburse players for unregulated gambling losses could incentivise gamblers to use unlicensed sites, potentially increasing the black market’s share, which already accounts for a significant portion of the country’s online gambling revenue.

Malta’s protective stance for its licensed operators via Bill 55 also raises questions about the enforcement of EU-wide regulations and the legal protections afforded to operators across different jurisdictions. The European Commission’s review and the subsequent decisions could have profound implications for how cross-border gambling operations are managed and regulated throughout the EU.

Looking Ahead

As the German Federal Court of Justice approaches its decision date, and Malta awaits the European Commission’s findings, the outcomes of these cases will likely influence future legislative and regulatory approaches in the online gambling sector across Europe. Stakeholders, including operators, legal experts, and regulators, will be watching closely, as these decisions will shape the operational and legal landscapes for online gambling within the EU for years to come.