Top EU court says German online gambler can sue for refund

Users of online gambling services within the EU can sue the betting operator for reimbursement of their losses if such gambling was prohibited in their home country when they placed the bets, the Court of Justice of the European Union (better known by the acronym ECJ) ruled on Thursday. 

Its rulings on this and another question — that member states are within their rights to outlaw or restrict such gambling individually, even though EU law permits it — paves the way for a German citizen seeking reimbursement for losses incurred when such gambling was illegal in their home country. 

The fact Germany's laws have since changed, meaning such gambling is now permitted, has no bearing on the case, the ECJ ruled. 

What was the case about? 

A German resident is seeking compensation in domestic courts for losses incurred on online slot machines and lottery prediction betting between June 2019 and July 2021, when such gambling was not legal in Germany.

A challenge to the German case was launched in fellow EU member Malta, where the betting company was licensed, and the Maltese courts referred three questions on EU law to the ECJ: 

• Can member states outlaw online gambling when EU law does not?
• Do EU laws preclude gamblers from seeking compensation for their losses on the basis that they should not have been allowed to make the bets? 
• Does a subsequent change in the laws to allow such betting, as in Germany, influence this? 

What did the court rule? 

Online gambling is fundamentally classified as a service, which generally should be freely available across borders within the EU and its wider free trade area the European Free Trade Association (EFTA).

But the ECJ said that the freedom to provide services can be restricted for "consumer protection and the protection of the social order."

It said that online gambling qualified for such an exemption —  more so than physical betting locations like bookmakers or casinos —  because it poses a particular risk 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 that Germany subsequently relaxing its online gambling laws in July 2021 to permit such betting did not affect the issue. 

Furthermore, the court ruled that "EU law does not preclude ... a civil action for restitution of the stakes lost," meaning the gamblers can seek refunds and could be eligible to them if domestic courts rule in their favor. 

Thursday's rulings could pave the way for other Germans, or EU residents in similar situations, who lost money gambling illegally online to try to reclaim their losses. 

Edited by: Wesley Dockery