Player losses cases in Europe will be tried based on local gambling laws, the European Court of Justice (ECJ) has ruled today in a judgement for a case brought by an Austrian player.
The judgement will likely have huge implications for Malta’s highly disputed Article 56A, which seeks to protect Malta-licensed operators from legal judgements brought by another EU market.
As per the decision, local gambling laws can be relied on by courts to determine the outcome of future player losses cases.
The landmark ruling could be bad news for operators embroiled in similar player losses cases, which have sought protection from Maltese law against such litigations.
Court insists damages were incurred in the market in question
This case in question related to a €18,547.67 loss incurred between 2019 and 2020, via a brand owned by the now-defunct operator Titanium Brace Marketing Limited (TBM)
As with the majority of player losses cases, the complainant had argued that the contract between them and the operator should be considered null because it did not hold a local licence within the market.
Both sides disputed the laws that should apply to the case and where the damages occurred. Two of TBM’s directors argued the place where the event that gave rise to the damage occurred was in Malta. And that the substantive law applicable is not Austrian law but Maltese law, which does not provide for liability on the part of the company’s officers.
But, within its judgement for Case C-77/24, the ECJ said it was clear from the court’s case law that the onus was on Austrian gambling law. It said the place where the damage materialised was the place where the alleged damage actually manifested itself.
“In view of the very nature of online gambling which does not allow to easily locate its holding in a precise physical place, it is appropriate to consider that these games took place at the place of the player’s usual residence,” the ruling added.
At the time the case arose, Austria had an online gambling monopoly system in place, and therefore only brands operated by monopoly operator Casinos Austria were licensed within the market. This system remains today, but stakeholders believe market liberalisation could be on the way.
Implications for Malta’s Article 56A?
Many operators embroiled in similar player losses cases have sought to lean on Malta’s Article 56A amendment to challenge defendants. The majority of ongoing litigations date back to a period before markets like Germany and the Netherlands had local licensing structures in place.
The article was introduced as an amendment to Malta’s gambling act in 2023, seeking to protect Malta-licensed gaming companies in the event of being sued in another European jurisdiction for providing their services.
Article 56A insisted that Malta would not uphold any European court judgment that deemed their services illegal in that market.
But in June, the European Commission wrote a formal letter to Malta’s government, saying the clause did not comply with European law.
The commission’s letter, published on 18 June, argued Article 56A unfairly shielded Malta licensees against legal challenges brought by other EU markets, and therefore “undermined the principle of mutual trust in the administration of justice”.
It threatened to proceed with a formal request for Malta to comply with EU law if the country failed to address the “shortcomings” raised in the letter.
Judgement relates to Austrian player losses case, and casts doubt over the various other cases awaiting ruling both in the ECJ and at a national level.