As oral hearings continue in the European Court of Justice (ECJ) over a Maltese courts’ challenge to German gambling enforcements and penalties, the stakes couldn’t be higher as a vital precedent could be set for the future of engagement with Malta-licensed gambling operators in Germany.
At the heart of the proceedings is a question with major financial and regulatory consequences: should German players be entitled to reclaim losses from gambling on foreign websites that were not licensed in Germany?
According to German attorney Dr. Joerg Hofmann, that is the issue the ECJ must now resolve.
“The crucial question that is ultimately at stake in the proceedings currently pending before the ECJ is whether German players get their money back if they gamble on a foreign website that isn’t licensed in Germany?”
From Lottoland to Luxembourg
The case originated in 2021, when a German player brought an action against Malta-based operator Lottoland for offering services without a German licence. After the lawsuit was withdrawn domestically, it was refiled in Malta and expanded to represent German consumers against other operators licensed there. Maltese businesses subsequently petitioned for legal clarity on how such infringements should be assessed in the years before Germany adopted its Fourth Interstate Gambling Treaty (GlüNeuRStV) in 2021.
Hofmann explained: “In recent years, German civil courts have issued numerous judgements in favour of the players and awarded them the right to reclaim losses incurred in online gambling. As a rule, this relates to periods before licences could be applied for in Germany, i.e. the offers for German players were supplied on the basis of another EU member state.
“While the courts have predominantly ruled in favour of players in the case of online casino games, the approach of the judges in the case of sports betting is very different. This is due to the fact that the attempt to licence sports betting in Germany in the years 2012 to 2015 failed and the relevant regulation was already criticised by the ECJ in its Ince decision as not transparent, not coherent and ultimately not in line with higher-ranking EU law.”
For many years, Hofmann noted, German courts avoided making a referral to the ECJ.
“This is now different.In the not-too-distant future, the ECJ is expected to clarify in a binding manner whether or not German gambling regulation was compatible with EU law at the time when the gambling losses of the plaintiff players were incurred. The chances of success of the players’ lawsuits depend on the answer to this question. Then the ‘maybe’ becomes a ‘yes’ or a ‘no’.”
Advocate General’s view
The process advanced with the Opinion of Advocate General Nicholas Emiliou, which Hofmann said provided key guidance.
“Firstly, he confirmed the fundamental admissibility of player actions against online gambling operators based in an EU member state outside of Germany and licensed there. In doing so, it clearly rejects the argument occasionally put forward that these would violate the principle of the prohibition of abuse of Union law.
“Secondly, it comes to the conclusion that the courts in other EU member states (here: Malta) are generally authorised and obliged to examine the compatibility of German gambling law with European Union law.”
Emiliou based this on core principles of EU law — direct effect, primacy, and private international law under Rome I and Brussels Ia — and stressed the need to guarantee individuals their rights in cross-border proceedings. Still, Hofmann cautioned:
“The national courts have to observe certain rules. However, they must exercise restraint and should only disapply foreign law in cases of obvious incompatibility with European Union law.”
German judges have generally taken a careful stance when hearing player claims. Hofmann recalled that when the first lawsuits were filed, there were fears plaintiffs could face criminal liability for participating in illegal gambling. “However, this was generally not addressed by the judges.”
He also noted how plaintiffs are often given the benefit of the doubt:
“Plaintiffs are regularly believed in their assurances that they were unaware of the alleged illegality of the offers and there is simply no avenue for a judge to refute this evidence.”
An incomplete framework
Hofmann described Germany’s licensing system as a work in progress, as he stated: “The development of a gambling licence regime in Germany has taken many years and is still not fully developed. Around twenty years ago, it was characterised by the politically desired consolidation and safeguarding of the state gambling monopoly for lotteries and sports betting.
“Gradual changes were initially trialled for sports betting after 2012. However, this did not work. The first sports betting licences could only be issued to private operators in October 2020. Further licences followed from 1 July 2021, particularly for virtual slot machines and online poker. Lotteries remain a state monopoly.”
One of the most controversial elements remains the treatment of online casino games.
“By this, the Interstate Treaty on Gambling does not mean slot machines typical in other jurisdictions, but rather bank holder games such as roulette and blackjack. The federal states may either offer these themselves or grant licences to private operators through limited tenders. So far, only Schleswig-Holstein and North Rhine-Westphalia have opted for the latter solution.”
In most states, players who want to access such games are pushed to the black market. Hofmann criticised this policy: “The reason for the removal of bank holder games from the nationwide gambling licences can hardly be traced. It seems like an ill-conceived relic from a time when land-based casinos were to be privileged with online gambling.
“Under European law, this regulation is unlikely to be justifiable. There is no room for monopolies here if the law even allows these games to be offered by private operators alternatively. There is an urgent need for readjustment. Player protection and channeling are falling completely by the wayside.”
Precedent in play
German regulation has already been tested at the ECJ, notably in the Carmen Media and Ince rulings, both of which forced amendments to the state gambling treaties. But Hofmann stressed that the pending referral could go further.
“The crucial question of whether German gambling regulation in the years prior to the new licence regime, which was slowly established from 2020, was in line with or in breach of higher-ranking European law has not yet been conclusively clarified by the ECJ. It is hoped that this will be clarified in the not-too-distant future.
“The German courts will have to take the final answer from the Court of Justice into account in their own case law.”
