Page 4: Braunschweig Higher Regional Court takes third approach

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Since 2023, the Braunschweig Higher Regional Court (OLG) (case no. 9 U 3/22) and several other OLGs in its slipstream have argued differently. They are guided by the BGH's 2014 ruling on illegal employment, but not by its 2022 ruling on nullity. In other words, although they classify the gambling contracts as void, they no longer categorically exclude the exception from rescission. The defendant gambling provider can therefore theoretically argue that the player has committed a criminal offense and thus forfeited their right to a refund (Section 817 BGB sentence 2).

Theoretically. In practice, this group of Higher Regional Courts refers to case law according to which the exclusion of rescission demanded with reference to the criminal offense of gambling only applies if the player knew that his illegal actions were prohibited or at least recklessly ignored this fact. (This does not apply to immoral actions, which are not the issue here).

According to the Higher Regional Court of Braunschweig, "the existence of the most diverse prohibition laws cannot be assumed to be generally known without further ado". Therefore, a casino that invokes the exception provision must prove that the player was aware of the prohibition (or that he recklessly ignored the information). The fact that the player has accepted the obligation to inform himself about the legal situation in the General Terms and Conditions but has not complied with this is not such recklessness.

The casinos did not meet this burden of proof in the proceedings known to the editors. As a result, the exclusion of the player's claim to enrichment did not apply after all, and the gambling providers were once again ordered by the OLGs to reimburse the losses to the respective plaintiffs.

Two lawyers, three opinions

The Higher Regional Court of Hamm agrees with this (Ref. 21 U 116/21) and also mentions an opinion expressed in the literature according to which pathological gambling addiction could exclude the player's culpability; without the player's culpability, the casino cannot invoke the exclusion of restitution due to criminal conduct. This would mean that the casinos would not even be able to prove that their customer was aware of the wrongdoing if he was not culpable. However, the OLG does not say whether this legal opinion is correct, and according to BGH case law, gambling addiction only reduces culpability in extreme cases.

More succinctly, the Higher Regional Court of Karlsruhe (Ref. 14 U 256/21) argued in the same way as the Higher Regional Court of Braunschweig and granted the player compensation. The internet casino had to pay back the gambling losses. The judges also pointed out that the gambling provider itself claimed that its offer was legal. This was not the case, but if the casino's lawyers wrongly assumed that it was legal, the casino could not assume that the player should have known that his participation in the gambling behavior was unlawful. Consequently, the casino could not invoke the BGB provision, which only applies if the player has intentionally committed a criminal offense.

The Bamberg Higher Regional Court also ruled in favour of the plaintiff player (case no. 10 U 22/23 e), but recognized a further legal basis for the player's repayment claim: anyone who culpably violates a protective law must compensate for the resulting damage (section 823 paragraph 2 BGB). The protective law in this case is Section 284 Paragraph 1 of the German Criminal Code, which makes the organization of gambling without a license a punishable offence.

However, some other Higher Regional Courts, such as Cologne at the end of 2023 (case no. 19 U 92/23), continue to follow the case law of Giessen Regional Court in 2021. This summary shows that many paths lead to the same result: German players can often reclaim their losses suffered at unlicensed online casinos, but only within the limitation period. As mentioned, the German rulings discussed here relate to the old gambling treaty, which was replaced in mid-2021; however, the basic legal principles can probably still be applied to online gambling dens that are still operating illegally. This should by no means be relied upon, as perhaps the Giessen Regional Court will once again convince other German judges with its more dogmatically comprehensible 2023 case law.

Low risk of repayment of illegal profits in Germany

The editorial team is not aware of any German ruling on the repayment of winnings paid out by the player to an illegal casino. No wonder: such a lawsuit by an illegal online gambling provider is likely to have little chance of success. It is too late for new lawsuits under the old gambling law situation because such claims are time-barred in Germany; in more recent cases, casino operators must know that they can have their "services" licensed in Germany, whereas without a German license they would be operating illegally in Germany. And this means that the players would now have the defense under Section 817 BGB sentence 2, because the reclaiming, illegal online casino would have acted intentionally in violation of criminal law.

The question remains: Doesn't the prospect of being reimbursed for losses suffered without the risk of having to pay back winnings made illegal online gambling even more attractive? In this respect, the new Austrian decision certainly has its merits.

(ds)