Austrian courts cannot force Malta-based gaming operators to compensate Austrian gamblers for their losses, according to two landmark decisions handed down by Maltese courts.
The decisions refer to two separate cases in which Austrian individuals had gambled on Maltese gaming platforms before filing proceedings in Austrian courts to recoup their losses.
Courts in Austria initially found in their favour, effectively ordering the platforms to return the funds lost.
But Maltese courts ruled otherwise on Thursday, finding that Austrian decisions could not be enforced in Malta because they contradicted EU law principles on the free movement of services and Malta’s public policy.
Austria’s controversial gambling laws impose a monopoly on the industry, effectively giving a single company a licence to operate gambling within the country and prohibiting gaming operators with a foreign licence from operating within Austria.
In practice, Austrian courts argued that since Austrian law considers foreign operators illegal, contracts with these operators are void, automatically making any losses refundable.
€38,000 loss in 11-day gambling spree
In the first case, Gerhard Posch sued TSG Interactive Gaming Europe, a Malta-based gaming operator, after he lost some €40,500 to the platform between 2017 and 2019.
In 2021, a court in the Austrian city of Klagenfurt agreed with Posch, prompting him to file a requisition order against the company to get his money back, plus interest.
But TSG hit back, arguing that the Austrian court’s decision violates EU law on free trade of goods and services and, as a licensed operator, it was free to operate across the continent.
In a similar case, Philipp Wahl took legal action against Malta-based operator European Lotto and Betting in the hope of recouping €38,000 in gambling losses he incurred during an 11-day spell in April 2020.
A court in Linz took Wahl’s side, saying he was entitled to his money back.
However, using similar arguments to those made by TSG, European Lotto and Betting successfully argued in a Maltese court that Austrian gambling laws did not abide by EU legislation and imposed unjustified restrictions on foreign operators.
The two judgements, both handed down by judge Francesco Depasquale, turned down the initial decisions by the Austrian courts, finding that they go against Maltese public policy.
Austria and Malta squabble over Bill 55
The cases strike at the heart of a long-standing dispute between Austrian and Maltese gambling circles.
In 2023, an Austrian firm and German lawyer had written to the European Commission accusing the Maltese government of trying to fast-track a legal change, known as Bill 55, which would allow Maltese gaming companies not to enforce sentences against them handed down in foreign jurisdictions.
In return, the Malta Gaming Authority warned of “very aggressive advertising” in Austria and Germany, encouraging customers of Maltese platforms to seek legal aid to recoup their losses.
This was “particularly damaging to problem gamblers by telling them there’s no risk,” MGA said at the time.
The matter also spilled over into diplomatic circles, with Robert Abela drawn to defend Bill 55 following a meeting with Austrian Chancellor Karl Nehammer.
Lawyers Joseph Mizzi, Jonathan Muscat and Davinia Cutajar represented TSG Interactive Gaming Europe. Luke Mifsud represented the Malta Gaming Authority while Daniel Inguanez appeared for the Economy Minister.