The ruling delivered on 27 February supported Malta-licensed operators that had conducted business in Austria’s market without a local license. The court determined that previous Austrian judgments were contrary to Maltese public policy.
Austria’s online gambling scene is dominated by monopoly operator Casinos Austria, with its Win2Day offering being the only licensed online product in the country.
The market, similar to Germany, has encountered several high-profile player loss claims. Players have tried to reclaim losses from offshore operators as they are considered illegal within these markets.
Players gambling outside this monopoly have found themselves in court, either having losses returned from illegal operators or reimbursing winnings to unlicensed operators. In several cases, the operators involved are licensed in Malta.
## Malta Judgment
The recent Maltese ruling revolves around a player who gambled in 2020 and lost €38,325 through Malta-licensed operator European Lotto and Betting Limited, operating as Lottoland.
An Austrian court had previously ruled that the player could recover their losses due to the operator’s illegality in the market. The case, however, was escalated to a local court by the Malta Gambling Authority (MGA).
Malta’s courts argued that EU Article 56 in the Treaty on the Functioning of the European Union (TFEU) allows for services such as online gambling to be provided across EU states.
It functions as a “primary source of community law” and a “fundamental rule of the legal order” for both the EU and Malta.
Malta’s court also contested that Austria’s federal law on games of chance and its online gaming monopoly conflict with the TFEU.
As a result, the Maltese court refused to enforce the Austrian judgments, stating they contravene Maltese public policy.
Representing the MGA, Davinia Cutajar, legal partner at WH Partners, mentioned that the decision has significant implications for the gambling industry as it “reinforces the autonomy of Maltese regulatory authorities and the jurisdiction of Maltese courts over gambling-related matters.”
Cutajar also noted that the compliance of Austria’s monopoly with EU law has been questioned multiple times.
She pointed out that numerous rulings from the Court of Justice of the European Union (CJEU) support the position that Austria’s monopoly model violates Article 56 of the Treaty on the Functioning of the European Union (TFEU).
In a statement, Nigel Birrell, group CEO of Lottoland, welcomed Malta’s landmark decision, saying it reinforced the operator’s previously expressed viewpoint on the issue.
## Past Austrian Decisions
In 2021, the Austrian Supreme Court declared that foreign iGaming brands were illegally operating in the country, rendering player contracts invalid. Players sought to recover their losses.
This decision impacted Betclic Everest subsidiary Bet-at-home, which was mandated to pay €2.8m in player losses almost three years following its market withdrawal.
In another case last year, an Austrian customer was ordered to return their winnings to an unnamed unlicensed operator in the market. The courts determined that both player and operator had violated Austrian gambling laws, making their contract invalid.
This decision essentially ruled that both parties knowingly operated illegally, leading to the player being ordered to cover the operator’s court fees.
## Austrian Online Gambling Facing Liberalization
These types of player disputes involving Austria and Maltese-based operators may diminish in the coming years as Austria is likely approaching the end of its online casino monopoly.
Casinos Austria was granted a 15-year license and a monopoly on online gambling. However, its license is set to expire on 30 September 2027. Austrian authorities are expected to commence the tendering process for new licenses this year.
Austrian Betting and Gaming Association VP Simon Priglinger-Simader expressed optimism earlier this month that Austrian online gambling might move away from the monopoly system.
Last December, European Gambling and Betting Association (EGBA) president secretary-general Maarten Haijer urged Austria to open up online gambling.
“The evidence from across Europe is clear and compelling: multi-licensing works,” Haijer stated. “It brings gambling activity into the regulated market, protects consumers, and generates significant tax revenue.”
The Maltese Civil Court has ruled that it will not enforce Austrian court judgments awarding refunds to players for gambling on sites not locally licensed.