Background: The German prohibition

The case originated from a dispute involving two Maltese-licensed operators offering online virtual slot machines and lottery betting to a player residing in Germany. Between June 2019 and July 2021, the player used these services and incurred losses. At that time, German law prohibited online games of chance.

The player sought restitution before a Maltese Court for the lost stakes, prompting the Maltese court to ask the CJEU if Germany’s strict national ban was compatible with EU law, especially considering the operators held valid licences in another Member State. The court also questioned whether Germany's subsequent shift to a licensing regime in July 2021 altered the legal standing of the previous ban.

Key findings from the CJEU

The CJEU upheld the rights of individual Member States to regulate their own gambling markets. Without EU-level harmonisation, countries retain broad discretion to establish consumer protection standards that align with their specific moral, cultural and social values.

The Court established several vital precedents:

• Valid national prohibitions: EU law does not prevent a Member State from prohibiting online casino games, slot machines, and certain betting activities to channel gambling into supervised environments and combat parallel markets.
• Cross-border licences: The fact that an operator holds a valid licence in one Member State does not make another Member State's prohibition or consequences associated with such prohibition disproportionate.
• Civil-law consequences: EU law permits national courts to declare contracts for prohibited gambling services void. Consequently, consumers can pursue civil claims for the restitution of lost stakes.
• Subsequent licensing regimes: Germany's transition to a licensing system in July 2021 does not retroactively invalidate the prior prohibition. The legal consequences of the old regime apply fully to the period it was active.

Practical implications

If you provide cross-border online gambling services, you must assess compliance strictly on a jurisdiction-by-jurisdiction basis. Implementing the strongest possible geographic controls is essential to prevent access from prohibited markets. The CJEU has effectively confirmed that consumers can act as private enforcers, using contractual nullity to reclaim lost funds.

The CJEU press release can be accessed here and the CJEU judgment here