Return of Money from Online Sports Betting: EU Court to Make a Decision

The issue of “getting money back from online sports betting” is now in front of the European Court of Justice (ECJ). The case (Az.: I ZR 90/23), where a player is demanding a refund for all his losses from online sports betting, has been brought to the ECJ. The reason? Tipico, the betting provider, did not have a valid license during the betting period. Initially, the Federal Court of Justice (BGH) was supposed to rule on this in July, but now they are seeking further clarification from the ECJ. Here’s what it means for everyone trying to recover losses from online sports betting.

First, the good news: If the ECJ rules against Tipico, it will bring legal clarity and boost the wave of lawsuits against providers of illegal online sports betting. The bad news? A decision could take several months. This delay plays in Tipico’s favor, giving them significant time.

Our Tip: Don’t wait to file a lawsuit! You can recover losses from as far back as 10 years. The date of filing the lawsuit is what matters.

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Online Sports Betting: BGH Favors the Players

The submission from the BGH to the ECJ was published at the end of July and gives players great hope. The Federal Court of Justice expressed a consistently player-friendly stance over 32 pages, which likely dampens the mood at Tipico.

What Does This Mean for Players?

For all those who lost money on online sports betting before October 2020, the situation is as follows: If the European Court of Justice rules against Tipico, the situation in Germany is pretty clear. The highest German court is already on the side of the players, and lower courts will follow suit, speeding up the processing of these cases. The chances of recovering betting losses are very good.

Tipico Had No Valid License for Online Sports Betting in Germany

Currently, Tipico is relying on the freedom to provide services as its last defense. The BGH clearly pointed out that Tipico didn’t have a valid license and failed to follow many player protection rules during the relevant period. Whether this freedom of services in Europe overrides German player protection laws remains to be seen and will be clarified by the ECJ.

What Does This Mean for Players?

If the ECJ decides that contracts with Tipico are void, not only will the player in the current case get his losses back, but many other similar cases will also have a high chance of success.

License Confusion from 2012

In 2012, there was already a licensing process for online sports betting in Germany, which failed due to the European Union. Tipico and 19 other competitors applied for a license but could not get one because the process collapsed. Even though Tipico initially won its case in court, the decision was eventually overturned, and they never received a license. Despite this, Tipico went ahead and operated in the market until October 2020, when licenses were finally available.

Sports Betting Providers Couldn’t Be Prosecuted

Many other sports betting providers also operated without valid licenses in Germany. The bad news for players: key player protection rules were not followed.

• A €1,000 limit per player was supposed to apply monthly.
• Offering sports betting and casino games at the same time was forbidden.
• Incentives for addiction through fast-paced betting options had to be avoided.

Tipico, along with many others, ignored these rules. Nonetheless, the ECJ ruled that due to legal uncertainties, online sports betting providers could not be criminally prosecuted in Germany. However, the issue of recovering player losses is not about criminal law but civil law.

Does European Freedom of Services Override Everything?

The BGH presented two key questions to the ECJ:

1. Does the freedom of services of a European gambling provider override German player protection laws, making contracts with Tipico valid even though the provider lacked a license?
2. Can a player not claim compensation if the provider applied for a license but didn’t get one due to the EU deeming the licensing process unlawful, even if online gambling was banned in their country?

What Does This Mean for Players?

The ECJ will decide whether German regulations are invalid because the 2012 licensing process failed. However, we don’t expect the ECJ to legalize unlimited gambling and believe that player protection will play a significant role in their decision.

BGH Places Protection Above Freedom of Services

The freedom to provide services should end where the protection of the population begins—this theme runs throughout the BGH’s submission to the ECJ. The 2012 gambling regulations were protection laws designed to prevent gambling addiction and its associated criminal activities. The BGH emphasizes how important it is for players to recover their money if no valid license exists to enforce these protections.

The BGH highlights that many players’ claims involve substantial losses, with some exceeding €100,000 per player. For the BGH, it’s clear: those who don’t comply with gambling regulations won’t get a license or will have it revoked.

Important Rules for Nigeria

This case offers useful insights for online casino in Nigeria, where the gambling sector is growing rapidly. Here are some rules that Nigerian authorities could consider adopting to protect players and ensure fair practices:

1. Mandatory Licensing for All Providers: Any operator offering online sports betting in Nigeria must have a valid license. If they operate without one, contracts with players should be considered void, and players should have the right to recover their losses.
2. Strict Player Protection Measures: Introduce a monthly betting limit for players, such as the €1,000 limit used in Germany. This will help curb excessive gambling and prevent addiction.
3. Separation of Betting and Casino Games: Online platforms should not offer both sports betting and casino games simultaneously. This will help prevent players from rapidly switching between different forms of gambling, which can increase addiction risks.
4. Prohibition of Fast-Paced Betting Options: Betting options that offer fast repetition, which can encourage impulsive gambling, should be banned or heavily regulated.
5. Enforcement of Player Compensation: If a provider violates any of these rules, Nigerian authorities should allow players to file for compensation and recover their losses, even if the provider applied for a license but didn’t obtain one due to legal issues.

Adopting these rules will create a safer environment for Nigerian players and ensure the integrity of the growing betting market. By following international standards, Nigeria can protect its players while allowing the betting industry to thrive responsibly.