Key Moments:
- The Court of Justice of the European Union confirmed that national bans on online gambling can stand even if services are licensed elsewhere in the EU.
- German consumers may pursue restitution for losses incurred with services prohibited under German law from June 2019 to July 2021.
- The decision asserts that possessing a license in one EU country does not grant gambling operators access to all member markets.
CJEU Supports National Authority Over Online Gambling Restrictions
The Court of Justice of the European Union (CJEU) has determined that members of the European Union can enforce bans on certain online gambling offerings regardless of whether these services are authorized elsewhere within the EU. The ruling was centered around European Lotto and Betting and Deutsche Lotto- und Sportwetten, underscoring that individuals are entitled to seek restitution for losses linked to gambling on prohibited services.
Background of the Case
The dispute involved two companies based in Malta, both licensed by the Malta Gaming Authority (MGA), which provided virtual slot and lottery betting to German residents. From June 2019 to July 2021, one German player utilized these platforms and sustained losses, even though German law at the time largely forbade such online activities.
The court’s decision stated, “EU law does not preclude national legislation prohibiting the organisation of online casino games, slot machine games and certain forms of betting.” The decision emphasized that member states may justify these restrictions to direct gambling behavior toward regulated channels and counter unregulated or illicit markets.
Player Restitution for Illegal Gambling Participation
A significant point in the court’s judgment was whether individuals could recover money lost when participating in gambling services considered illegal in their country of residence. The CJEU’s position affirms that players can seek restitution for these losses.
Quoting directly from the ruling: “a consumer may bring a claim for restitution of lost stakes against operators established in another Member State where the games of chance at issue were prohibited in the consumer’s Member State of residence.” It continued, noting that EU law does not preclude “a civil action for restitution of the stakes lost.”
Further, the judges confirmed that EU law does not prevent “the nullity of contracts concluded in breach of that prohibition,” leaving it to national courts to decide the outcome under domestic law. This could significantly affect cases in Germany, particularly for those who gambled prior to the regulatory changes implemented in mid-2021.
Judicial Perspective on Member States’ Discretion
Despite the EU’s principle supporting the free provision of services, the CJEU reaffirmed that this right can be restricted in service of the public interest, like consumer protection and maintaining social order. The ruling stated that, due to variations in moral, cultural, and social standards, member states maintain autonomy in setting their level of protection against gambling-related harms.
The court cited increased risks from online gambling compared to in-person venues, highlighting “the permanence of access, the isolation and anonymity of the player, the absence of social control, the potentially unlimited frequency, and its attractiveness to young and vulnerable persons.” These factors justify the imposition of national restrictions, including outright prohibitions on certain online gaming types, even as other forms remain permitted within alternative frameworks.
Impact of Germany’s Policy Shift
Although Germany replaced its wide-ranging ban on online gambling with a licensing system on 1 July 2021, the CJEU clarified that this move does not retroactively affect the legality of earlier rules or restitution claims from that timeframe.
The court stated: “The subsequent replacement of a general prohibition by a system of prior approval does not, in itself, affect the consistency or validity of the earlier regime.” Transitional arrangements or new rules do not override the legal consequences of the previous prohibition, according to the ruling.
Consequences for Operators and the EU Gambling Market
This judgment confirms that an authorization in one EU jurisdiction does not guarantee an operator’s entry to every member state’s market. The court outright rejected the view that a cross-border license automatically grants access, emphasizing, “the fact that the operator is lawfully established and supervised in another Member State is not sufficient to demonstrate that such a prohibition is inconsistent or inappropriate.”
Timeline of Key Developments
| Date or Period | Event |
|---|---|
| June 2019 – July 2021 | German consumer participates in Malta-based online gambling services and incurs losses |
| 1 July 2021 | Germany transitions from a general online gambling prohibition to a regulated licensing system |
| April 16, 2026 | CJEU issues judgment clarifying member states’ authority over online gambling restrictions |
- Author
Daniel Williams
