Austrian Supreme Court orders gambler to return partial winnings to unlicensed operator in landmark case

In a recent ruling, Austria's Supreme Court partially sided with an unlicensed online gambling operator seeking to reclaim winnings from a player.

The case involved an unnamed Malta-based gambling operator and an Austrian gambler. The case arose when the gambler, who had used the services of the Malta-based operator, deposited nearly €22,000 ($24,000) and won a total of €29,100 between May and July 2020. Despite being unlicensed in Austria, the operator filed a claim to recover the €7,152 in winnings paid to the player.

The Supreme Court examined the legality of the contract between the two parties and determined that such contracts are "absolutely void" due to the operator's lack of a license in Austria.

Interestingly, the court noted that both parties could invoke the illegality of the contract, stating: "Since the prohibition provisions in question are therefore not protective provisions that exist exclusively for the benefit of one contractual partner, not only this party, but every contractual partner can invoke the illegality and nullity of the contract."

This decision marks a stark difference from previous cases, where courts typically ruled in favor of players seeking to recover losses from unlicensed operators. The Supreme Court's ruling aligns with Austria's strict gambling monopoly, aimed at discouraging the use of unlicensed operators and preventing gambling addiction.

The court emphasized that allowing players to retain winnings while recovering losses would encourage participation in illegal gambling, counteracting the country's regulatory efforts.

Although the operator initially sought to recover the full €7,152, the court ruled that only part of the winnings was garnered illegally. Consequently, the player was ordered to return €626.60 to cover the operator's legal fees. The gambler has 14 days to comply with the court's order.

The player's defense argued that the operator's request for repayment was an abuse of the law, given that both parties were aware of the illegality of their actions. However, the court dismissed this argument, underscoring that Austrian gambling laws do not provide protective provisions for either the player or the unlicensed operator.

The court's decision to uphold the operator's appeal, albeit partially, is seen as a significant precedent, particularly in the context of Austria's gambling monopoly, where Casinos Austria's Win2Day platform is the only licensed online casino operator. This monopoly has led to numerous lawsuits against foreign operators by players seeking to recover losses, especially following a 2021 Supreme Court ruling that declared contracts with unlicensed operators invalid.

The implications of this ruling may extend beyond Austria, particularly in countries like Germany, where similar legal battles are ongoing. In Germany, a case involving the sports betting operator Tipico has been referred to the European Court of Justice (ECJ) to determine whether operators should refund players for losses incurred before the State Treaty on Gambling came into effect.