Supreme Court Upholds Online Sports Betting Losses Not Recoverable

An article by attorney Arthur Stadler and attorney Reinhard Schweng

VIENNA, Austria (February 28, 2023) — In the not yet published decision on 1 Ob 176/22x, the Supreme Court (“OGH”) did not follow the extraordinary revision of the plaintiff. The Supreme Court has fully confirmed the decisions of the lower courts that there is no claim for reimbursement of losses in online sports betting by a betting customer from Styria (“plaintiff”) against a betting company based in the EU (“defendant”) that does not have a national license has. The defendant thus – as in the first and second instances – completely prevailed in the third instance. SV.LAW represented the defendant from the beginning until the end of the proceedings in the third instance.

The following legal principle, which the OGH itself formulated in its decision, is trend-setting and significant:

“The Styrian Betting Act 2018 only regulates the offering, conclusion and brokerage of bets and the brokerage of betting customers through behavior on the part of the betting operator within the state. Sports bets that a betting operator offers via the Internet from a location outside of the state are not included recorded.”

The Supreme Court arrived at this legal statement after the following discussion: The Supreme Court decided – with remarkably careful consideration – in favour of a narrow interpretation of the Styrian Betting Act (” StWttG “) in the sense of the constitutional principle of territoriality. In our opinion, this interpretation will in principle also have an effect on other comparable constellations and with regard to the betting laws of the Austrian federal states. After a detailed examination of the doctrine and comparative law, the Supreme Court came to the conclusion that the StWttG is only applicable to Styria and exclusively to activities as a betting company with a physical presence. In the StWttG – according to the OGH – online bets are not explicitly regulated; other content should not be subject to the law. Beyond the wording of the law, according to the Supreme Court, there is ” not the slightest indication ” that the legislature intended otherwise. Such an assumption would have required an express provision in the subject matter. According to the Supreme Court, the StWttG only regulates the offering, conclusion and brokerage of bets through behaviour that is set in the state. Sports bets offered by a betting operator from a location outside the country via the Internet are not included; this does not involve exercising a betting activity “within the meaning of the law”.

These considerations result in the non-applicability of the StWttG to this form of activity as a betting operator. The OGH correctly came to the following conclusion:

“The offering and acceptance of online sports betting by the defendant without authorization under these provisions does not justify the nullity of the betting contract within the meaning of § 879 Para. 1 ABGB.”

Finally, the OGH also saw no suitable basis for any other analogy of the StWttG or for the application of any protection and due diligence regulations that were alleged in the course of the proceedings.

In contrast to gambling (gambling monopoly according to § 3 GSpG) there is – in summary – no nationwide regulation of betting. Rather, the respective state law must be observed. If there are online bets and the betting company does not have a physical presence in the federal state, then – as in the present case – this fact does not fall within the scope of the state law (here: StWttG). Neither the StWttG itself nor the materials refer to online betting or specify the geographical scope of this law. We absolutely agree with the legal opinion of the Supreme Court and the lower courts in this regard.

Please contact us about this decision. We and our team that handled the case are at your disposal!

CONTACT: Attorney Arthur Stadler / Attorney Reinhard Schweng at (Stadler Völkel Rechtsanwälte GmbH).

SOURCE: Stadler Völkel Rechtsanwälte GmbH.