Facts
A consumer with a habitual residence in Germany brought a suit to a Maltese court against 2 companies based in Malta. The plaintiff demanded a refund of the rates that this consumer had set (and lost), participating in random games offered by these companies. To this end, he claimed that since these games were offered in the West Germany, in violation of German regulations (hereinafter: GlüStV), the underlying contract was illegal and so invalid. Therefore, these companies should reimburse these rates. The contested companies claimed that, first, the contested agreement is legal and so valid and that GlüStV should not be applied due to the fact that it is contrary to the freedom to supply services (Article 56 TFEU). Secondly, specified a claim constitutes an abuse of EU law in any case.
The referring court raised doubts as to whether the EU freedom to supply services precludes specified national rules as GlüStV, where a company offering online games is licensed in another associate State, and whether it is possible to recognise an agreement between that company and a player from another associate State as invalid and order the refund of lost betting amounts.
TS Position
Prohibition of online gambling
According to settled case law, the activity of enabling users to participate in gambling for a fee is provision of services within the meaning of Article 56 TFEU. According to the caselaw of the TS, each associate State should be evaluatedwhether, in the context of its legitimate objectives, a complete or partial prohibition of specified activities is necessary, or only to restrict it and establish more or little stringent control rules, the necessity and proportionality of the measures thus adopted must be assessed only in the light of the objectives pursued and the level of protection that the national authorities afraid want to supply ( TS of 8.9.2010), Carmen Media Group, C-46/08, Legalis, paragraph 46).
The Court has so indicated that it is for the national courts to verify that a regulation adopted by a associate State is appropriate to accomplish the nonsubjective or objectives identified by the associate State concerned, in accordance with the level of protection it intends to achieve, and that it does not go beyond what is essential to accomplish it ( TS judgement of 8.9.2010), Stoß and in., C-316/07, from C-358/07 to C-360/07, C-409/07 and C-410/07, paragraph 78). In this assessment, national courts should take into account that the provisions of the GlüStV on gambling are among the areas where between associate States There are crucial discrepancies on moral, spiritual and cultural aspects, and that, in the absence of harmonisation at European Union level in this respect, it is for each associate State to measure separately in these areas, according to its own value scale, the requirements relating to the protection of data of interest ( TS judgement of 24.1.2013), Stanleybet and in., C-186/11 and C-209/11, Legalis, paragraph 24).
The Court held that Article 56 TFEU must be interpreted as meaning that it does not preclude national rules which prohibit online casino games, in peculiar games on slot machines, as well as establishments specified as secondary lotteries, where they aim to control the natural tendency of the public to gamble in an orderly and controlled manner and to prevent the improvement and spread of illegal gambling in parallel markets, even if:
- There is considerable request among players for online gaming machines;
- the associate State afraid allows akin games at the same time, including lotteries, on a fixed basis;
- the State allows online sports and horse racing betting to be offered by licensed operators, as well as to broker private operators in the sale of public lottery products and another licensed lotteries, and
- the regulation of the associate State whose operator intends to offer secondary lottery services in peculiar is licensed shall prosecute the same objectives as those set out in the associate State's regulations imposing a general prohibition on the provision of specified services.
In addition, the opinionThe TS Article 56 TFEU must be interpreted as meaning that it does not preclude designation of the legal effects of the prohibition of online casino games in a given dispute if, following the existence of factual circumstances which may consequence in specified effects, it has been decided to replace that prohibition with a prior authorisation strategy and a transitional period has been introduced during which the offers of games which may comply with future regulations would be accepted subject to certain requirements.
Invalidity of the contract with the consumer
In the assessment of the TS, Article 56 TFEU must be interpreted as meaning that it does not preclude establish the annulment of an agreement concluded between a consumer resident in a associate State and an operator offering online secondary lottery services from another associate State, where, in accordance with the regulations of the first associate State, it is not possible for private operators to issue licences to organise specified establishments.
The Court has stressed that the question of whether an agreement is invalid if its object is illegal and whether the nullity entails for each organization the right to refund the benefits it has received under that agreement is simply a substance of the law applicable to the contract concerned pursuant to Articles 10(1) and 12(1)(e) of Regulation (EC) No 593/2008 of the European Parliament and of the Council of 17.6.2008 on the law applicable to contractual obligations (Rome I) (OJ L 177, p. 6). In the present case, the Court held that German law was the law applicable to the contract concluded between the first player and the defendants.
According to the TS, it cannot be excluded, of course, that the player could usage services offered by a company specified as the defendant, while being full aware of the prohibition applicable to this dispute and its possible consequences, but this the issue can be resolved only on the basis of applicable national law.
The Court held that Article 56 TFEU and the rule of prohibiting abuse of the law must be interpreted as meaning that they do not preclude a consumer who has participated in online games offered by an operator who does not have a licence issued by that State but who has a licence issued by another associate State from bringing a civilian action against that operator for the reimbursement of the amounts of betting paid by that operator, on the basis of the annulment of the gambling agreement concerned, in accordance with the applicable contract law.
It follows, inter alia, from the extended justification of this judgement that:
- Member States may introduce, without prejudice to the Union's freedom to supply services (Article 56 TFEU), a ban on online casino games and virtual slot machines;
- players (consumers) may require the refund of lost betting amounts from operators established in another associate State if the games afraid were banned in their associate State of residence; players are entitled to compensation for unjust enrichment; the possible subsequent liberalisation of specified a prohibition does not alter the anticipation of players (consumers) recovering lost betting amounts from the period preceding that date;
- the nullity of the contract between the player and the operator and the legal effects of that agreement are subject to the applicable provisions of the national law of the player's country of residence;
- the participation of a player (consumer) in these games, despite the existence of a licence in another associate State (as in the Maltese case), is not adequate to establish an abuse of the law within the meaning of EU law, and the question of determining the possible bad religion of that player is governed by national law.
By the way, it is worth noting in the context of Polish questions for a preliminary ruling (which is the subject of questions in the course of training) that in the present case the referring court refers in the mention for a preliminary ruling to the law of another associate State.
Judgment of the TS of 16.4.2026, European Lotto and Betting and Deutsche Lotto-und Sportwetten, C-440/23
