For years, the sports betting market was an El Dorado for providers. They often acted without a license. This now has consequences: Thousands of players can sue for their losses and demand their money back.
Sports betting has cost countless fans their money. The online providers in particular lure with the promise of making a game “your game” with just a few clicks on the smartphone or PC keyboard. What many players do not know: For a long time, the betting providers with their homepages and apps were in a legal gray area. In fact, they didn’t even have a license to offer online betting. Now the Dresden Higher Regional Court (OLG) has made a judgment that could be groundbreaking for players who have lost money in illegal sports betting.
Dresden Higher Regional Court: Sports betting provider must pay back player losses
The startup “Chargeback24” and its partner law firm “HFS Rechtsanwälte” represent players who have lost money at illegal online betting providers and are now demanding it back. Last week, they were able to get the Dresden Higher Regional Court to have their client recover all of their losses plus five percent interest from a betting provider – a total of almost 12,600 euros.
The judgment could be a signpost for the entire industry – and especially for the players. “This is the first time that an OLG has ruled that losses from sports betting have to be repaid to a provider without a license,” explains Thomas Schopf, attorney at law firm “HFS Rechtsanwälte” in an interview with the stern.
According to the lawyer, there is currently a whole wave of lawsuits against providers of online gambling. In the case of online casinos, the legal situation is now very clear: “Casino games were completely banned on the Internet until mid-2021. There was no way to get a license for this,” says Schopf. The online casino market in Germany was only opened up with the renewal of the State Treaty on Gambling.
OLG Dresden: Online betting providers without a license were not allowed and must not do any business
In sports betting, the situation has long been more complicated. Many providers applied for licenses that were to be issued in Germany from 2012. But the process was stopped, among other things, due to a lack of transparency in the award procedure. From this time on, the providers moved in a gray area: they didn’t have a license, but they couldn’t apply for one either. The result was wild growth. More and more sports betting providers are entering the market – both online and offline. The competent authorities could hardly oppose them.
From that point on, courts were arguing about the question: Is it illegal for bookmakers to offer their services without a license? “From 2012 to 2020, the market was completely deregulated. And now the question is: Can the providers be accused of not having a license if the state did not have a functioning licensing procedure? Or do the rules simply apply that the offers without a license are forbidden?” said Schopf.
“Chargeback24” and the lawyers of the law firm “HFS Rechtsanwälte” had and have a clear opinion on this: If you don’t have a license, you’re not allowed to offer sports betting and make money with it. The Higher Regional Court of Dresden agreed with them.
Players can claim losses retrospectively for at least three years
Florian Friederich, founder of Chargeback24, explained in an interview with the stern, the lower limit for recoveries is 5001 euros. Above this limit, the respective facts would be negotiated before the responsible regional court – including representation by a lawyer. In principle, 100 percent of losses can be sued at sports betting providers without a license – retrospectively for at least three years. In most cases, a period of ten years is even possible. In other words, anyone who made losses at an online betting provider between 2017 and the end of 2020 can claim them back in full. The respective regional court must then decide whether the recovery is lawful.
This is also why the judgment of the OLG Dresden is so decisive, explains Schopf. “When a higher regional court expresses its opinion, the lower regional courts usually all follow it.”
Friederich: “There’s a 90 percent chance that we’ll be successful”
According to Schopf and Friederich, the chances of being successful in court with a claim for reimbursement of gambling losses are good: “I see a 95 percent chance of success in lawsuits against illegal online casino providers, and around 90 percent in the case of illegal online sports betting have,” says Friederich.
Thus, many players who have lost money in the past can claim back their losses. Especially for people with a pathological gambling problem, such a repayment could be a chance to get their finances back on track.
The start-up also looks after customers with some enormous losses, and thus claims for reimbursement: “On average it is 43,000 euros. But we have at least 100 customers who have lost six figures, some even seven figures.” Practically every one of these clients has overstretched their financial circumstances due to their gambling addiction.
Sports betting is big business in Germany. In 2021, the providers generated sales of almost nine billion euros. But in spite of the enormous income, nationwide reclamations in the years leading up to official licensing would probably drive most providers into bankruptcy. “Realistically, all operators would have to file for bankruptcy at the moment,” said Schopf. This is mainly due to the fact that the providers have to make huge provisions because of the existing risk.
If more and more people continue to sue for their losses and the courts continue to agree with them, the market would “consolidate”, Schopf and Friederich agree. A few large players who would have the money and good lawyers to fight or ward off lawsuits would be left. Many smaller providers would soon disappear, according to their assessment.
For Friederich and Schopf, lawsuits against illegal betting providers have become a business model. With “Chargeback24” they are taking legal action pro bono – their customers do not initially have to pay anything for it. If they fail with their lawsuit, the customers will not incur any costs. If the lawsuit is successful, the startup calculates 39 percent of the refund as compensation – no matter how high it is.
Apparently a lucrative venture. The founders of Chargeback24 say the number of their customers has been growing steadily since it was founded three years ago. The market is bigger than the company can serve alone. One can also hear from anecdotal reports from gambling addiction therapy that the number of gambling addicts in Germany is increasing massively. And many of them would be entitled to a refund from illegal online betting.
2023-06-09 16:12:57
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