The European Court of Justice (CJEU) has issued a further determination on the application of member state laws with regards to the recovery and compensation of online gambling losses.
A determination by Advocate General (AG) Nicholas Emiliou of Cyprus details that: “A sports betting operator which offers services on a national market without possessing the required licence may be obliged to refund the stakes collected from players.”
The AG’s opinion belongs to a German land-standing dispute challenging Tipico Malta online gambling licence on the recovery of losses for the period of 2013-to-2020.
The German customer sought to recover losses from Tipico, which operated in Germany under a licence granted by the Malta Gambling Authority (MGA). At the time, German gambling was in period of regulatory flux, as the Bundestag had failed to settle terms to launch the fourth interstate market (GlüNeuRStv).
The AG views the matter as “from the perspective of German law, the claims brought by the consumer in question against Tipico appear, in principle, to be well founded. However, in its defence, Tipico contends that it was unable to obtain a German licence owing to certain deficiencies in the licensing procedure.”
According AG Emiliou Tipico holding no licence in Germany renders the contract between the operator and the consumer ‘null and void’.
Yet, regardless of Tipico’s licensing circumstance, the AG believes that ‘tort laws’ viewed as a cause of physical harm or personal loss can be applied by the member state.
The case increases pressure on Malta over its use of Bill 55 as a defence when it comes to the gambling sector and licenses being utilised across Europe.
However, previously speaking to Frankfurter Allgemeine Zeitung (FAZ), Tipico Chief Executive Officer Axel Hefer declared that the operator would not hide behind the bill and doesn’t need to.
He stated: “We are a Maltese-German company with 1,500 employees at several major locations in Germany. It’s clear to us that we don’t hide behind Maltese law. We have never invoked ‘Bill 55.”
Germany has been a significant critic of the potential shielding operators, with the country’s regulator, the GGL stating: “We are of the opinion that this law should not be compatible with European requirements for the recognition of decisions (Regulation (EU) 1215/2002).
“However, the final assessment of this question is not the responsibility of the GGL. We have informed the federal states of our assessment and are otherwise in contact with the relevant authorities.”
Continued pressure
The Tipico case follows a recent CJEU AG determination on the Wunner case (Austria v Malta), which reaffirmed that Member States’ entitlement to enforce their respective tort laws on gambling disputes, irrespective of licences granted in other EU jurisdictions
A distinction in the Wunner Case saw the CJEU reject Malta’s claim of “EU passporting” in gambling. The determination noted that, unlike financial services, a gambling licence issued in one Member State does not grant automatic access to another.
Each state may set its own conditions, provided they are proportionate, non-discriminatory, and transparent.
This continues pressure, as the unsettled legal dispute between Austria and Malta also reaches boiling point, with the country triggering Article 56A, more commonly known as Bill 55.
The Article was triggered by Malta Courts in a move to disregard previous opinions made by the CJEU on long-running disputes between the two jurisdictions.
Article 56 of the Treaty on the Functioning of the European Union (TFEU) is being utilised by the operator as the foundation for its case – the right to freely provide services across EU member states – as what is being protected in Maltese law through Article 56A.
Rather than disregarding rulings of the European Court of Justice, Maltese courts are applying public policy exceptions under the Brussels I Recast Regulation (EU) 1215/2012, reinforced domestically by Article 56A, to block the enforcement of foreign civil decisions that they argue undermine Malta’s gaming regulatory framework.
