In Germany, a landmark court case is unfolding, and it is one that will have great significance for the iGaming market in the country and across all of the European Union (EU).
The case is C-530/24, DK v Tipico Co. Ltd, which centers around a claim for recovery of gambling losses.
The premise of the lawsuit is whether Tipico should refund wagers placed between 2013 and 2020, when the operator held a Malta-issued license but not a German one.
Specifically, it relates to the compatibility of German gambling laws with wider EU regulations, and in particular, the outworking under Article 56 of the Treaty of the Functioning of the European Union (TFEU).
Why DK v Tipico tests EU gambling law
After the plaintiff, DK, incurred losses over the seven-year period, Tipico was sued in German courts with the initial case alleging the contracts were invalid due to the absence of a German license.
Tipico’s retort was that the German regulatory framework was too rigid, restrictive, and incompatible with EU law.
This created the ongoing impasse and set in motion a fraught legal uncertainty for the numerous cross-border operators in Europe.
“If the CJEU concludes that contracts remain void regardless of defects in the licensing system, this would reinforce the legal basis for player repayment claims covering long periods prior to the current regulatory regime.” – German lawyer speaking to ReadWrite on condition of anonymity.
Germany’s State Treaty on Gambling (2012) details that gambling contracts are deemed void if the operator lacks a German license for conducting public gambling activities.
The law is designed to protect consumers and users from gambling harm, as well as to act as a bulwark against black market operators.
Conversely, another factor is that sports betting licenses were limited to 20 under an effective monopoly, but the licensing process had its flaws.
No licenses were issued between 2012 and 2020 due to delays with the award process, which inadvertently created a ban on new entrants, including EU-based operators such as Tipico.
This week, Tipico was welcomed into the European Gaming and Betting Association (EGBA), as it becomes its newest member.
What a CJEU ruling could mean for operators
The German case went to the country’s Federal Court of Justice, but that authority deferred the dispute to the Court of Justice of the European Union (CJEU), seeking clarification, supplemented with questions relevant to the case.
C-530/24, DK v Tipico Co. Ltd, is shaping up to be a landmark case among other similar refund claims in Germany, and one that could set a huge precedent with massive ramifications for the industry.
A German lawyer familiar with the situation told ReadWrite: “From the perspective of potential consequences, the outcome is highly relevant not only for Tipico but for the wider market.
“If the CJEU concludes that contracts remain void regardless of defects in the licensing system, this would reinforce the legal basis for player repayment claims covering long periods prior to the current regulatory regime.
“It would significantly increase civil liability exposure and would likely accelerate ongoing mass litigation before German courts.”
Our source continued to detail that if the EU Justice Court rules that EU law precludes “such nullity where the licensing procedure violated EU principles, this would substantially weaken restitution claims based solely on the absence of a licence.”
That could shift the focus and legal responsibility toward the state’s regulatory failure rather than placing the onus on individual gambling operators that obtained access to the market through the available procedures.
Overall, the claims are said to be worth billions of euros, reflecting the potential ‘game changer’ outcome for the German gambling eco-system.
In another, similar case, C-77/24, Wunner, the CJEU delivered an important judgment setting out that claims for losses resulting from illegal online gambling are governed by the law of the player’s Member State of residence.
This is expected to have a bearing on DK v Tipico.
Final judgement on DK v Tipico
In closing, the case is being closely monitored in Germany by courts, operators, regulators, litigation funders, and compliance specialists.
It is widely understood that the decision will influence how German courts deal with a large number of pending cases and will likely shape the limits of civil liability for historical market participation.
It highlights the problem that the gambling market was regulated under rules that were formally strict but procedurally insufficient, and the legal system is now being asked to decide who should face the consequences of that contradiction.
The answer from the CJEU in Luxembourg will be decisive in what happens next, with the Advocate General’s opinion expected in a matter of weeks, around early February.
This is the same AG involved in Wunner, but it will be a non-binding opinion, even if it will likely influence the final judgment.
That is expected to be communicated in the first half of this year, possibly later in the summer.
C-530/24, DK v Tipico Co. Ltd. remains pending with no final ruling imminent.
Image credit: EPPO / Tipico
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