On June 27, 2024, the time had finally come: A player had sued Tipico for repayment of his losses and had relied on the financing and support of Gamesright. In the more than two-hour negotiations, the highest German court ruled extensively in favor of the plaintiff! The decision of the Federal Court of Justice will be announced on July 25, 2024.
What happened until now:
The court date was previously postponed for settlement negotiations. However, an agreement could not be reached because Tipico did not want to make an offer and also considered large parts of the claims to be time-barred. The player had bet with the provider between 2013 and 2018. The BGH is sticking to its assessment, which was already known from the advisory decision in April. It also made it clear that it would also confirm a violation of Section 284 of the Criminal Code, which would mean a Limitation period only after ten years entry.
The BGH particularly emphasized that betting without a license is prohibited by law. The lack of a license, i.e. the licence to offer online sports betting in Germany, renders the betting contracts ineffective. The opposing side had argued that this constituted a punishment that was not permitted under European law. The BGH did not agree with this. The state may not punish a provider as long as it has not issued a license itself, which is contrary to European law. However, this does not mean that providers without a license may offer bets, contrary to the express wording of the law. Nor can it be concluded that prohibited betting contracts with the players who are supposed to be protected by the law are valid. Accordingly, the civil law reversal is not a punishment by the state, as the criminal senate has already decided. The State Treaty on Gambling, which is supposed to protect players, is indisputably effective under European law, so that the relationship between player and provider must be reversed. This does not result in a contradiction in assessment. The Senate has already ruled on a case involving unfair competition, so this assessment is not surprising.
A referral to the ECJ is unlikely:
In view of the clear position of the Federal Court of Justice, Tipico's representatives urged the BGH not to decide on its own, but to refer the matter to the European Court of Justice. This would delay the clarification of the relevant legal questions by a further two years, which the provider would probably like. This could mean that a large part of the financial claims of the affected players would become statute-barred. The chairman had already indicated in his introduction that the BGH wanted to decide on the matter itself and did not consider a referral to be necessary. In fact, all relevant questions of European law have probably already been clarified.
The successful trial marks an important point in the fight against illegal business practices in the area of online sports betting and underlines the importance of consumer protection in this difficult market. Experts believe that the outcome of the proceedings will set a trend for almost all online sports betting providers. Potentially affected are providers such as the main European Championship sponsor Betano, bwin, Bet365, as well as Interwetten, betway, Xtip and several others.
If you have also lost money gambling with this or other providers on the Internet, take your chance now: Claim your money back!
Hannes Beuck on the effects of a positive judgment:
"For Gamesright, today's hearing was a complete success! The Senate made a very detailed statement and agreed with us on all essential aspects. We assume that many affected parties who have not yet contacted us will contact us about their claims. Many will have been waiting for this positive feedback from Karlsruhe, as this will be the first ruling by the Federal Court of Justice in this matter. The legal certainty gained will also secure the financing of these thousands of new proceedings."
What impact will a positive ruling for consumers have on the betting industry?
"Providers are currently being sued in numerous individual proceedings and only pay after lengthy trials, even though the verdicts are foreseeable in advance. The BGH's landmark ruling shortens the duration of the proceedings and reduces the costs of the proceedings for the benefit of all those involved, as there are no longer any legal uncertainties. In the future, this will hopefully often avoid going to court and those affected will receive their money back immediately."
So, if the outcome of the procedure is positive, can we speak of a landslide?
"Absolutely, yes. The current proceedings between Gamesright and Tipico are about whether sports betting contracts with providers without a license are invalid until the end of 2020. After the very positive negotiations, we now assume that this principle will be confirmed by the Federal Court of Justice. It will then apply to all bets before the end of 2020. Accordingly, many affected parties are likely to contact us again.
There are other legal reasons why many bets were invalid. The BGH pointed this out in a case against Betano. As far as we know, such violations were the rule, not the exception. The majority of negotiations will therefore be conducted by consumers on two levels in the future: because of the fundamental invalidity and because of the violations of substantive law. If we were to win the fundamental issue now, this would be optimal for consumers. It would apply to all providers without a license, without any further proof."
Is there a certain number of new cases that are expected?
"It is difficult to make an exact forecast. We expect thousands of new inquiries. The ruling could trigger a significant wave of lawsuits."
Can betting losses also be reclaimed after a license has been granted?
"This must be carefully examined by a lawyer in each individual case. We are already financing a number of proceedings against various providers in which claims are asserted even after the license has been granted."
What options does Tipico have to take legal action against a negative judgment?
"Tipico has urged the Senate of the Federal Court of Justice to leave the decision to the European Court of Justice. This is clearly another attempt to prevent the long overdue landmark ruling. The Federal Court of Justice has already anticipated this with the advisory ruling from April and has also made it clear in this hearing that it wants to decide. If it had wanted to refer the case, it could have done so months ago, as it did in lottery and casino proceedings, for example. I therefore consider a referral to be extremely unlikely and do not consider it necessary. The Federal Court of Justice has the competence and the interest to provide the lower courts with clear guidelines.
A constitutional complaint could also be considered. Even if the chances of success are likely to be extremely slim, this could also be an attempt to further delay a final decision and thus the wave of lawsuits. Statistically speaking, the Federal Constitutional Court does not accept most complaints for decision. In 2021, only about one in 100 constitutional complaints was successful. These proceedings usually concern political issues or fundamental ethical principles."
Is there a chance that Tipico will try to shift the blame onto the state?
"It is possible that they will try to deny responsibility. Ultimately, however, every provider knew that they did not have the necessary licenses. The offers were expressly prohibited by law without a license. In this respect, we are surprised that Tipico recently announced the dispute to the Frankfurt tax office. They probably want to imply that any taxes paid on the prohibited bets should be refunded. I do not find this convincing and the Federal Court of Justice has made it clear that this question is not relevant to the fundamental ruling."
What could a positive ruling by the Federal Court of Justice mean for UEFA with regard to the European Championship sponsor Betano?
"For UEFA, the issue of sports betting represents a moral challenge. The selection of sponsors seems to be strongly influenced by financial aspects. In my opinion, UEFA should use its opportunities to promote international understanding and sport and should not select sponsors solely on the basis of the amount of sponsorship. Especially at a major event such as the European Championship, which is followed by many young people and children, it is important to pay careful attention to which products and services are being advertised.
If the BGH ruling confirms that sports betting providers have engaged in extensive illegal business in the past, UEFA should consider even more carefully whether Betano is suitable as an advertising partner.
Betano claims that they are now 100% legal as they have an official license. As I said at the beginning, this does not mean that UEFA should choose this sponsor."
Do you expect a statement from UEFA on this issue?
"I think it's very unlikely. As far as I know, UEFA does not comment on how it selects its advertising partners."
Sports betting providers are and have been part of the sponsorship landscape in German football. What can the DFB expect in the case of the BGH ruling?
"The DFB recently had dealings with Tipico's parent company, CVC, and planned to sell shares to them. However, this plan failed, although I do not know the exact reason. I think that a positive BGH ruling in our case will at least consolidate this decision and such a plan will no longer be an option in the future. In my opinion, further intertwining between sports betting providers, clubs and associations should be avoided at all costs. It is interesting that the new CEO of Tipico, who will start work on July 1, 2024, was previously chairman of the supervisory board of FC Schalke 04. You can see that the ties here are still very closely interwoven."
What are UEFA and DFB doing wrong with BETANO as a European Championship sponsor?
"It sends out completely the wrong message. There is agreement that sports betting has gotten out of hand due to its high addictive potential. The Federal Government's gambling atlas confirms this and points to 1.3 million gambling addicts and a further 3 million at risk. This corresponds to a significant proportion of the adult population that displays conspicuous behavior.
Even though sports betting may be part of sport in some ways, I think it is wrong to advertise it at a major event, especially as this is where many young people are made aware of sports betting. Many years ago, advertising for cigarettes and alcohol was severely restricted or banned due to their similar addictive potential. The same should apply to sports betting."
What was Gamesright’s motive for filing suit against Tipico before the Federal Court of Justice?
"Gamesright is providing legal clarity with the BGH proceedings. Our aim is to help consumers get their rights. So far, many providers have refused to provide any insight in the thousands of court cases we have financed and some of which we have conducted ourselves. In doing so, they are delaying fair and quick results. This should soon change following the positive ruling. Our aim is to address the illegal practices of betting providers in the past. Long-term players are the betting providers' most important customers. They want to be treated fairly and deserve it. Our service naturally helps these affected players first and foremost, but the betting industry should also see it as an opportunity to regain the trust of its own customers. Lip service to working "100% legally" is clearly not enough. The faster the providers agree to do this, the more damage to their reputation can be avoided. We are convinced that the law-abiding providers will ultimately prevail. This also applies to providers like bet365, which - as is currently the case with several of our customers - do not react to legally binding judgments. Players naturally distance themselves from such providers. Mutual trust is very important, especially in the betting industry, and providers can and must now earn back this trust. We see ourselves as a building block in this process."
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