BGH to Decide on Reimbursement of Lost Sports Bets Without a German License
The First Civil Senate of the Federal Court of Justice faces a crucial decision. They must determine whether a sports betting operator, lacking the necessary German license, is obligated to reimburse a player's lost bets.
This particular case stands apart from proceedings under case number I ZR 53/23, which the Senate has suspended. The distinction lies in the subject matter: the current case does not concern online poker games, which were subject to a total ban under Section 4 para. 4 of the Interstate Treaty on Gambling (GlüStV 2012) until June 30, 2021.
Instead, this case involves online sports betting. The defendant operator had applied for a license for such betting under Section 4 para. 5, §§ 4a, 10a GlüStV 2012.
Case Details: Licensing Requirements for Sports Betting
The defendant, a Malta-based entity, operates a German-language website offering sports betting. The plaintiff engaged in sports betting with this defendant between 2013 and 2018. During this period, the defendant held a license from the Maltese gambling supervisory authority.
Crucially, the defendant did not possess a permit from the German authority to organize sports betting in Germany. Despite this, the defendant had applied for such a German license. In fact, following a request from the defendant, the Wiesbaden Administrative Court ordered the competent authority to grant the license. This decision was issued on October 9, 2020 (see Wiesbaden Administrative Court, judgment of 31 October 2016 – 5 K 1388/14.WI).
The plaintiff contends that the sports bets were inadmissible and the betting contracts invalid. He claims unawareness that the defendant's offering constituted prohibited gambling. Consequently, the plaintiff is seeking repayment from the defendant for his losses, amounting to €3,719.26, plus interest. Additionally, he demands indemnification from pre-trial legal fees. This highlights the importance of legally compliant contract drafting in such service provisions.
Legal Proceedings and Lower Court Rulings
The initial District Court dismissed the action, a decision upheld by the Regional Court on the plaintiff's appeal. The Regional Court concluded that the plaintiff was not entitled to repayment under Section 812 para. 1 sentence 1 case 1 BGB (German Civil Code).
According to the Regional Court, the defendant had not obtained the plaintiff's payments without legal grounds, as the sports betting contracts were deemed valid. The court acknowledged the defendant's violation of Section 4 para. 1 and Section 4 para. 4 and 5 GlüStV 2012. However, it argued that this did not automatically lead to the nullity of the contracts under Section 134 BGB.
The court’s reasoning was based on several points:
- A unilateral violation of a prohibition law only results in nullity if the law's purpose cannot be achieved otherwise and the transaction cannot be accepted.
- This condition was not met because the defendant had applied for a license pursuant to Section 10a para. 2 GlüStV 2012 and met the substantive requirements for its granting.
- The lack of permission was solely attributed to the EU-law-incompatible nature of the concession procedure itself.
Given this constellation, neither criminal prosecution nor administrative prohibition of sports betting was possible. From a civil law perspective, the court concluded that a breach of the provisions of the State Treaty on Gambling did not render the betting contracts null and void under Section 134 BGB. Considerations of regulation and compliance are thus central to such cases.
Furthermore, the Regional Court determined that a claim by the plaintiff could not be derived from Section 823 para. 2 BGB. Sections 4 para. 4 and 5 GlüStV 2012 and Section 284 of the German Criminal Code (StGB) were not considered protective laws in the context of Section 823 para. 2 BGB. This touches upon broader issues of liability of platform operators for illegal user content. The appeal, allowed by the Court of Appeal, indicates the plaintiff’s continued pursuit of these claims, highlighting potential legal challenges for businesses operating in complex regulatory environments.
Conclusion
The Federal Court of Justice's upcoming decision is eagerly awaited, as it will provide significant clarity on the legal implications for sports betting operators without proper German licensing. This ruling will not only affect the specific parties involved but also establish precedents for the broader gambling industry in Germany, particularly concerning the validity of contracts and the potential for reimbursement of player losses under such circumstances.