Questions & Answers - Hope for sports betting losers
Since around mid-2012, it had only been allowed for state providers to organize sports bettings in Germany, according to lawyer and expert in gambling law, Lennart Bruggemann. In order to dry up the black market, the German states introduced a new gambling treaty in 2012 that also included private providers.
"The problem was that it took over eight years to issue a single sports betting license to interested private providers," Bruggemann said. Administrative courts had concerns about the bureaucratic procedure. Providers remained in a legal limbo for years. The first licenses were only issued in 2020. The currently valid gambling treaty, which officially legalized sports bettings under certain conditions, came into effect in 2021.
What is the issue in this specific case?
On Thursday, the Federal Court of Justice (BGH) dealt with a claim by a man against the betting provider Tipico. The man had participated in sports bettings with Tipico from 2013 to 2018 and lost over 3700 Euro, which he demanded back. In his view, the sports bettings were unlawful and the betting contracts invalid because the provider did not have the necessary authorization from the competent German authorities. Tipico had applied for a license but only received it in 2020. It was initially unclear when the BGH would announce its decision.
What are the chances of success for the claim?
So far, the player's claim had not been successful. The Landgericht Ulm argued that Tipico had violated provisions of the 2012 gambling treaty, but the betting contracts were still valid.
However, a hint given by the court in an early April published ruling in a similar case suggested that the BGH might see things differently. Although this ruling was not a judgment but only a preliminary assessment to help the parties prepare for the oral hearing, experts believed it roughly represented the planned judgment in that case. The provider withdrew its appeal before a judgment could be issued.
In the current case at the BGH, the presiding judge of the first civil senate, Thomas Koch, stated on Thursday in Karlsruhe that, based on a preliminary assessment, the senate leaned towards considering such contracts without a so-called license as invalid, even if a license to conduct sports bettings had been applied for. Players could then have a claim for reimbursement.
What impact could the BGH judgment have?
The BGH judgment could have significant implications for thousands of similar cases. Players who have participated in sports bettings with unlicensed providers since the new gambling treaty came into effect in 2021 could potentially be entitled to reimbursement. The exact scope and consequences of the judgment are still unclear and will depend on the specifics of each individual case.
A consumer-friendly judgment of the Federal Court of Justice (BGH) could potentially unleash an even greater wave of lawsuits than there already are. Thousands of similar proceedings are already running at German courts. This is also due to the fact that law firms and some companies have specialized in such lawsuits. The companies act as intermediaries, connecting players with lawyers and assuming the costs of legal pursuit in exchange for a success fee.
So is the case with the company Gamesright, which in the present case bought the player's claims from him and now represents him against Tipico. A ruling in favor of the player could have significant impact, according to Co-Founder Hannes Beuck. "We assume that the majority of affected players, who are still waiting and observing, will then demand their money back. So far, only a small fraction of the affected players have done so."
How common are sports betting today?
According to the latest Glücksspielatlas, five percent of the population participated in sports betting in 2021 - a doubling within two years. The gross player revenues from sports betting would have amounted to 1.4 billion Euros in 2022. In comparison: At lotteries, it was 4.1 billion Euros and at gaming machines, 4.8 billion Euros. The growth in sports betting has been strong since their legalization in the fall of 2020. According to the Joint Gambling Authority of the States (GGL), there are now 30 licensed providers of sports betting.
Would a BGH judgment be the last word on this?
Perhaps not, as the European Court of Justice (EuGH) could still take up the issue. The lawyers representing Tipico applied to the Grand Chamber, the judges and judges of the European Court of Justice in Luxembourg, to present the contested issue. The BGH has not considered an EuGH reference on this matter so far. The relevant questions have been answered, it was stated in the reference order from April.
In the current case, however, an EuGH reference is also conceivable, explained Judge Koch at the end of the hearing. There are questions that were not present in the other proceedings. And even if the BGH does not refer the case to the EuGH, other courts could still do so. "After the BGH, there is the EuGH," said the leading Tipico lawyer Ronald Reichert before the hearing. The legal issues would definitely be clarified by the EuGH.
- Despite not having a license until 2020, Tipico was still operating in the field of sports betting, which was a point of contention for a man who participated in sports bettings with them from 2013 to 2018 and lost over 3700 Euro.
- The case was brought to the Federal Court of Justice (BGH) in Karlsruhe, where the presiding judge, Thomas Koch, stated that, based on a preliminary assessment, the court might consider such contracts without a license as invalid, potentially entitling players to reimbursement.
- The BGH judgment could have significant implications for thousands of similar cases, as players who participated in sports bettings with unlicensed providers since 2021 could potentially be entitled to reimbursement.
- Karlsruhe-based company Gamesright, which bought the player's claims from him and now represents him against Tipico, co-founder Hannes Beuck stated that a ruling in favor of the player could have a significant impact, potentially leading many other affected players to demand reimbursement.
- lawyer Lennart Bruggemann highlighted that the issue of sports betting in Germany has been a complex one, with providers facing significant delays in obtaining licenses due to bureaucratic procedures, leading to providers operating in a legal limbo for years.
