In a revolutionary ruling, Austria’s Supreme Court of Justice (OGH) has set a new precedent by ordering a player to pay back winnings made from an offshore bet365 website, registered in Malta.
And the bold move could make offshore iGaming in Austria–and further afield– a zero-sum game.
Austria’s gambling market is a monopoly, with only a single legal platform, Win2Day, a subsidiary of Casino Austria, permitted to operate.
Yet despite this, other EU-licensed online casinos have provided services to Austrian players for many years.
The OGH first ruled that contracts made with offshore gambling sites were null and void in 2017 because they were illegal under Austrian law.
This, technically, made it possible for players who had used offshore gambling sites to claim losses made.
Bettor’s Remorse
As a result, since the 2017–and a subsequent 2021 ruling–, which reinforced the initial offshore ruling, Austrian lower courts have been inundated with cases of “bettor’s remorse,” in which disgruntled players tried to regroup their losses.
In 2021, for example, AdvoFin Prozessfinanzierung AG–AdvoFin Litigation Financing–, a Vienna-based company that has financed gambling lawsuits in Austria, had over 1,000 cases of this kind open — with claims totalling more than €60 million (£51.3m).
But the recent OGH ruling, made public last week, has now set a precedent for operators to also claim back winnings from players, arguably making offshore gambling a pointless, zero sum endeavour.
The Court said that if gambling contacts are invalid, and players can reclaim their losses, then operators can also reclaim winnings.
“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,” the OGH noted in its ruling.
Test Case
The test case concerned a player who deposited nearly €22,000 (£18,838) and won €29,100 (£24,919) between May and July 2020 and then, cock-a-snoop, tried to claim back their initial stake.
But bet365–the world’s largest privately-owned gambling company–hit back.
Despite their offshore status in Austria, the British iGaming pathfinder filed a counter-claim to recover the €7,152 (£6,400) in winnings they had paid out to the player.
The player argued that bet365 should not be able to recover winnings, as the company knew their actions in providing offshore betting services were illegal.
But the OGH sided with bet365 and stated that a portion of the player’s winnings were obtained illegally, resulting in the player being ordered to return €626.60 (£533.89).
The OGH emphasised that Austria’s gambling laws aim to protect players and prevent illegal gambling. And that allowing players to claim back losses while keeping winnings could, if anything, only lead to the perception of risk-free gambling offshore, driving gambling addiction.
By setting the precedent that offshore winnings are not guaranteed, consumers will be less likely to partake in the activity, the OGH reasoned.
Zero Sum Game
Simultaneously, as the new ruling still leaves the door open for players to regroup losses, operators remain de-incentivised to offer their services to Austrian consumers.
“The legislator wants to prevent gambling outside the monopoly and generally keep the incentive to participate in prohibited gambling as low as possible,” said the OGH.
“If the player were only able to claim back the money unilaterally, it would make it even less profitable for the organiser to offer the banned game on the market.
“If, on the other hand, the organiser could also claim back the illegally paid winnings, the player would also be deterred from playing with such an organiser.”
The ruling effectively makes offshore iGaming a zero-sum game in Austria.
But will it be adopted in other countries struggling with the legal challenges posed by offshore sites?
Watch this space.
