GER: Must Sports Betting Operators Refund Lost Stakes?

Aug 16, 2024 Benn-Ibler Rechtsanwälte

Illegal sports betting: The German Federal Court of Justice (Bundesgerichtshof, hereinafter BGH) considered whether the presumption of invalidity of betting contracts due to lack of a licence could infringe the freedom to provide services under EU law.

In the case at hand, a sports betting player had demanded reimbursement of his online gambling losses from the operator. In his opinion, the contract that had been concluded between him and the sports betting provider was null and void. This was because the sports betting provider did not have a licence to do business in Germany, even though it had already been the subject of an application for such a licence.

The lower courts had dismissed the case. The BGH has now stayed the proceedings and referred the matter to the Court of Justice of the European Union (CJEU) for a preliminary ruling.

The BGH first set out the national civil law situation as follows:

The prohibition subject to authorisation for the organisation of public sports betting in the GlüStV 2021 (Glücksspielstaatsvertrag 2021, 2021 State Treaty on Gambling) constitutes a statutory prohibition. The defendant sports betting provider infringed this prohibition by offering sports betting on the internet in Germany during the period relevant to the dispute without having the necessary licence.

This breach of the law means that the sports betting contracts between the claimant and the defendant are null and void and that the claimant is therefore entitled to recover his losses under the law of unjust enrichment.

The BGH also raised the question whether EU law required a different assessment and whether the freedom of the sports betting provider to provide services prevented the nullity of a sports betting contract because the defendant had already applied for a licence to operate sports betting during the relevant period, and the licensing procedure applicable to this application had been conducted in breach of EU law.

The BGH also emphasised that the civil law consequence of nullity is not a penalty, but a restriction of private autonomy for the protection of general legal transactions.

Press Release No. 155/2023 on BGH I ZR 90/23 (25 July 2024)