Reimbursement of Losses in Unauthorized Sports Betting
Hearing date on March 7, 2024 at 9:00 a.m. in the matter of I ZR 90/23
Year of issue 2024
Publication date January 17, 2024
No. 008/2024
The 1st Civil Senate of the Federal Court of Justice has to decide whether a sports betting organizer who did not have the necessary license from the competent authority domestically must reimburse a player’s lost betting stakes.
This matter differs significantly from the proceedings under file number I ZR 53/23, which the Senate has suspended, in that the subject matter here is not online poker games, which are subject to the total ban of Section 4 Paragraph 4 of the State Treaty on Gambling in the July 1st The version that came into force in 2012 and is valid until June 30, 2021 (GlüStV 2012), but rather online sports betting, for which the defendant organizer had applied for a license in accordance with Section 4 Paragraph 5, Sections 4a, 10a GlüStV 2012 (cf. also the press release from today on procedure I ZR 53/23).
Facts:
The defendant, based in Malta, offers sports betting on the Internet via a German-language website. The plaintiff took part in the defendant’s sports betting from 2013 to 2018. During this period, the defendant had a license from the Maltese Gaming Authority, but did not have a permit to organize sports betting from the German authority. The defendant had applied for such a concession. At the defendant’s request, the Wiesbaden Administrative Court obliged the responsible authority to grant the defendant the license (see VG Wiesbaden, judgment of October 31, 2016 – 5 K 1388/14.WI). This was done by decision dated October 9, 2020.
The plaintiff claims that the sports betting is inadmissible and the betting contracts are invalid. He claims that he did not know that the defendant’s offer was a prohibited game of chance. With his lawsuit, he demanded that the defendant repay the payments made to them in the amount of the losses suffered of €3,719.26, plus interest and exemption from pre-litigation legal fees.
Process history so far:
The district court dismissed the action. The regional court rejected the plaintiff’s appeal against this. It assumed that the plaintiff was not entitled to repayment under Section 812 Paragraph 1 Sentence 1 Case 1 BGB. The defendant did not obtain the plaintiff’s payments without legal grounds because the sports betting contracts were valid. The defendant violated Section 4 Paragraph 1 and Section 4 Paragraphs 4 and 5 GlüStV 2012. However, this does not result in the contracts being null and void in accordance with Section 134 of the German Civil Code (BGB). The unilateral violation of a prohibition law only leads to invalidity if the purpose of the law cannot be achieved otherwise and the legal regulation made cannot be accepted. This cannot be assumed because the defendant applied for a license in accordance with Section 10a (2) GlüStV 2012 and met the requirements for granting a license. The lack of permission was simply due to the fact that the implementation of the concession procedure was contrary to EU law. In this constellation, neither a criminal punishment for the violation nor an administrative ban on the organization of sports betting was possible. Under civil law, this means that a violation of the provisions of the State Treaty on Gambling does not lead to the invalidity of the betting contracts according to Section 134 of the German Civil Code (BGB).
A claim by the plaintiff does not follow from Section 823 Paragraph 2 of the German Civil Code (BGB). § 4 para. 4 and 5 GlüStV 2012 and § 284 StGB would not be considered as protective laws within the meaning of § 823 para. 2 BGB under the conditions mentioned.
With the appeal approved by the appeal court, the plaintiff is continuing to pursue his applications.
Lower courts:
AG Geislingen an der Steige – judgment of April 28, 2022 – 3 C 459/21
LG Ulm – Judgment of May 24, 2023 – 1 S 46/22
The relevant regulations are:
§ 4 GlüStV 2012
(1) Public games of chance may only be organized or arranged with the permission of the responsible authority of the respective country. Organizing and brokering without this permission (unauthorized gambling) as well as participating in payments in connection with unauthorized gambling are prohibited.
(…)
(4) Organizing and arranging public games of chance on the Internet is prohibited.
(5) In deviation from paragraph 4, in order to better achieve the objectives of § 1, the states may allow their own distribution and brokerage of lotteries as well as the organization and brokerage of sports betting on the Internet if there are no reasons for refusal in accordance with § 4 paragraph 2 and the following requirements are met are: (…)
§ 134 BGB
A legal transaction that violates a legal prohibition is void unless the law states otherwise.
§ 812 Paragraph 1 Sentence 1 BGB
Anyone who obtains something without legal justification through the services of another or in any other way at their expense is obliged to hand it over to them.
§ 823 BGB
(1) Anyone who intentionally or negligently unlawfully violates the life, body, health, freedom, property or other rights of another is obliged to compensate the other for the resulting damage.
(2) The same obligation applies to anyone who violates a law intended to protect another. If, according to the content of the law, a violation of this law is possible even without fault, the obligation to pay compensation only arises in the event of fault.
Section 284 Paragraph 1 StGB
Anyone who publicly organizes or holds a game of chance or provides the facilities for this without official permission will be punished with a prison sentence of up to two years or a fine.
Karlsruhe, January 17, 2024
Press office of the Federal Court of Justice
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