Germany allowed to ban online casino games by Malta-licensed companies
Gambling subject to EU cross-border freedom of services, but restrictions can apply, court rules
European Union law does not prevent a member state from banning certain online gambling services offered from another EU country, a top EU court has ruled.
The judgment, delivered Thursday by the Court of Justice of the European Union (CJEU), involved two Malta-licensed companies which offered online virtual slot machine games and betting on lottery results to players in Germany.
Between June 2019 and July 2021, a player residing in Germany made use of those services and lost a number of bets.
Under German law at the time, online games of that nature were prohibited.
A case to recover the money lost was eventually opened in Malta.
The Maltese court referred the matter to the CJEU for interpretation of EU law.
The CJEU found that online gambling services are subject to the freedom to provide services under EU treaties, but that this freedom may be restricted for overriding reasons in the public interest.
Those reasons include consumer protection and the protection of social order.
In the absence of harmonisation, and given the moral, cultural and social differences between EU countries, the latter enjoy discretion in determining the level of protection sought, the court said.
The Court noted that online gambling presents specific risks greater than those associated with physical establishments, including permanent access, player anonymity, the absence of social control and its particular appeal to young and vulnerable persons.
It found that EU law does not prevent a national court from finding contracts concluded in breach of such a prohibition to be void, nor from ordering repayment of the stakes lost.
In January, the CJEU ruled that EU gamblers can seek redress in their country of residence, in a separate case involving a Maltese gaming provider.
The case was brought before the CJEU by Austria's highest court, after an Austrian resident initiated proceedings against two directors of Maltese online games provider Titanium Brace Marketing to recover losses he incurred because of online gambling.
Titanium, currently in liquidation, held a gambling licence in Malta, but did not hold any licence in Austria.
The customer therefore argued that the gambling contract was null and void, as the two Austrian directors are personally as well as jointly and severally liable for the fact that Titanium offered illegal games of chance in Austria.
Malta has sought to shield local gaming companies from foreign court judgments with a controversial law referred to as Bill 55.
The government justified the law as part of a longstanding policy to encourage the establishment of gaming operators in Malta and to shield the sector from potentially costly legal claims abroad.