Litigation for gambling losses against illegal online casinos still undecided

Dutch judges have recently issued rulings with potentially far-reaching implications for the online gambling industry. Similar rulings have since been made in other countries as well. Some courts grant the claim for repayment of a gambling debt, for example the court in Overijssel, but the court in Zeeland-West Brabant has rejected such a claim for repayment. Meanwhile, the courts of Noord-Holland and Amsterdam want to ask the Dutch Supreme Court how claims for repayment of a gambling debt should be judged.  The outcome may have far-reaching consequences and raises interesting questions about the regulation of online gambling and players’ rights.

Are agreements with unlicensed online casinos void?

That is the key question that ultimately the Supreme Court must now decide. To this end, the following legal questions have been formulated, which can be submitted to the Supreme Court after input from the parties in those proceedings:

Did the Dutch Gambling Act (Wok) originally have the purport of affecting the validity of legal acts contrary thereto?

If so, has that purport – having initially been present – been lost under the influence of social developments and/or in view of the enforcement policy of the Gambling Authority?

Is a gaming agreement between a consumer residing in the Netherlands and a provider of games of chance on the Internet that does not have a license within the meaning of the Wok a void agreement within the meaning of Section 3:40 of the Dutch Civil Code?

Does it make any difference to the answer to question  whether the provider of games of chance (or an entity affiliated with it) met the prioritization criteria of the Games of Chance Authority? If the answer to question  is affirmative, what are the legal consequences? Is a claim for repayment of the loss suffered based on undue payment attributable?

License for online casino was not granted until October 2021

Under the Gaming Act, offering games of chance is not allowed without a license. Until April 1, 2021, nothing was regulated for online gambling and online gambling providers could not obtain a Dutch license. After the Remote Gaming Act went into effect on April 1, 2021, an online gambling license did become possible from October 1, 2021. But many Dutch people gambled even before that through websites of online casinos, which were based abroad and did not have a license. In about 50 lawsuits, they are now litigating in various courts against those online casinos.

So until October 2021, online gambling was illegal in the Netherlands. During this period, there were people who lost significant amounts of money while gambling online. Many of them felt they were treated unfairly and felt that the online gambling companies were responsible for their losses. Some of these gamblers decided to take legal action against the unlicensed online gambling companies involved.

The courts have ruled in some of the cases where judgments have thus already been handed down that ten the online gambling companies are obliged to refund money to the gamblers. One of the cases involves Unibet, in which the company was ordered to refund €93,000. The other case, in which the company in question remains anonymous, involves a substantial sum of €124,000.

Effects of rulings against illegal online gambling providers

In these court cases, the judge ruled that the online gambling companies were responsible for gamblers’ losses. The court emphasized that online gambling was illegal in the Netherlands until October 2021 and that the companies were aware of this situation. This is an important step in the regulation of online gambling. It draws attention to online gambling companies’ duty of care to their customers, even when the activity is illegal. The rulings raise questions about how the gambling industry should handle players’ rights and what responsibility they bear.

Impact of court rulings on the gambling industry

These rulings may have a (significant) impact on the online gambling industry in the Netherlands and abroad. The battle is as yet undecided as the Supreme Court will undoubtedly rule on this in the end. Online gambling companies will likely have to review their operations to comply with the duty of care and respect players’ rights. This may include stricter regulation and oversight of the industry.

Players will also become more aware of their rights and the responsibilities of gambling companies. This may encourage them to take legal action if they believe their rights have been violated. It may also lead to a greater emphasis on responsible gambling and the duty of care of online gambling providers, as well as more prevention measures to prevent gambling addiction.  Unfortunately, people who are gambling addicts also lose their money to illegal online websites. Those who are gambling addicts can arrange their own gambling cessation through the Central Register of Exclusion from Gambling (CRUKS). You can read more about that here.

Lawsuit against Maltese gambling company operating online casino

In an Aug. 28, 2023 ruling, the court awarded the monetary claim based on nullity of a gaming agreement between a consumer and a professional defendant.

The plaintiff bases the claim on the (nullity) of a gaming agreement entered into between the parties, which the plaintiff entered into in its capacity as a consumer with the defendant who thereby engaged in commercial or professional activities which, the plaintiff claims, are also directed at the Netherlands. The claimed claim does not appear to the court to be unlawful or unfounded and will be granted as follows. The nullity of an agreement with a company that does not have the necessary government permit follows from Section 3:40 (2) of the Civil Code. It can be deduced from Article 6:203 et seq. of the Civil Code that what has been paid on the basis of an invalid contract can simply be claimed back.

The Austrian and German case against online gambling company

An Austrian and the German judgment involve a claim for undue payment. Apparently, the creditor gambled in an online casino that does not have the required license in Austria. Contracts that are not authorized or not authorized without a license are void. The Court assumes that this is so under both Austrian and Curaçao law (cf. GEA Curaçao April 5, 2019, ECLI:NL:OGEAC:2019:66).

No obligations arise from the agreements with illegal gaming providers; in the absence of any further legal provision, the services rendered on the basis of such agreements were rendered without legal basis, i.e., undue. The claim from undue payment is not included in the ‘legal action … in respect of a debt arising out of play or betting’ referred to in Article 7A:1807 of the Civil Code. The sanction of nullity would otherwise be completely undermined.

Illegal online casinos still at risk of having to refund money

Some recent rulings requiring online casinos to refund money to gamblers mark an important turning point in the regulation and rights of players in the online gambling industry. However, these case will be appealed fromd and the Dutch Supreme Court will habe te fianle ord on this. These case emphasizethe responsibility of online gambling companies to players even when the activity was illegal in a particular country. These rulings have the potential to dramatically change the way online gambling companies operate and how players exercise their rights. It is a development that should be watched closely and may have implications for similar cases in other countries.

Legal advice on Dutch gaming and licensing

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