On February 27, a ruling was delivered that supported Malta-licensed operators conducting business in Austria’s market without a local license. The court stated that prior Austrian judgments conflicted with Maltese public policy.
Casinos Austria, a monopoly operator, dominates Austria’s online gambling scene with its Win2Day offering being the only licensed online product in the country.
The market, along with Germany, has seen numerous high-profile claims from players seeking to recover losses from offshore operators deemed illegal in these regions.
Players gambling outside this monopoly have appeared in court with various outcomes, including having losses returned from illegal operators or, in some cases, repaying winnings to unlicensed operators. Often, these operators hold licenses in Malta.
## Malta Judgment
The recent Maltese ruling pertains to a case involving a player who gambled in 2020, losing €38,325 ($39,845/£31,653) through Malta-licensed operator European Lotto and Betting Limited, operating as Lottoland.
An Austrian court had initially ruled that the player could reclaim their losses due to the operator’s illegality in the market. However, the case 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) permits the provision of services, like online gambling, across EU states.
This article is considered a “primary source of community law,” serving as a “fundamental rule of the legal order” for both the EU and Malta.
The Maltese court further contended that Austria’s federal law on games of chance and its online gaming monopoly contravene the TFEU.
Consequently, the Maltese court refused to uphold the Austrian judgments, citing them as contrary to Maltese public policy.
Representing the MGA, Davinia Cutajar from WH Partners highlighted that the decision significantly impacts the gambling industry, “reinforcing the autonomy of Maltese regulatory authorities and the jurisdiction of Maltese courts over gambling-related matters.”
Cutajar also pointed out that the compliance of the Austrian monopoly with EU law has been questionable on several occasions.
She mentioned that numerous rulings from the Court of Justice of the European Union (CJEU) support the notion that Austria’s monopoly model infringes on Article 56 of the TFEU.
In a statement, Nigel Birrell, group CEO of Lottoland, welcomed Malta’s landmark decision, stating it aligned with the operator’s previously expressed stance on the issue.
## Past Austrian Decisions
In 2021, the Austrian Supreme Court ruled against foreign igaming brands, declaring them illegal operators in the country, and player contracts were nullified, leading players to recover their losses.
This decision affected Betclic Everest subsidiary Bet-at-home, which was ordered to compensate €2.8m in player losses nearly three years after its market exit (due in August 2024).
In another recent case, an Austrian customer was required to return winnings to an unnamed unlicensed operator. The courts concluded that both the player and the operator violated Austrian gambling laws, rendering their contract invalid.
Essentially, this ruling stated that both parties were knowingly acting illegally, and the player was obliged to cover the operator’s court costs.
## Austrian Online Gambling Facing Liberalisation
Such disputes may decrease in the coming years as Austria is likely to phase out its online casino monopoly.
Casinos Austria holds a 15-year license granting them exclusive online gambling rights, set to expire on September 30, 2027. Austrian authorities are expected to initiate the tendering process for new licenses soon.
Austrian Betting and Gaming Association VP Simon Priglinger-Simader expressed optimism about moving away from the monopoly system.
In December, Maarten Haijer, secretary general of the European Gambling and Betting Association (EGBA), advocated for Austria to open up online gambling.
“The evidence from across Europe is clear and compelling: multi-licensing works,” Haijer said. “It brings gambling activity into the regulated market, protects consumers, and generates significant tax revenue.”
The Maltese Civil Court has decided not to enforce Austrian court judgments that favored players being awarded refunds for gambling on non-locally licensed sites.