PLAYER REFUND CLAIMS
In parallel, the issue of gamers spending excessively on loot boxes and digital card packs in video games, and whether such in-game purchases could constitute gambling, has been on the agenda at a number of legal forums, including IMGL. Revenue figures for in-game purchases in Germany are substantial – in 2021 alone, they amounted to 4.24 billion EUR 1 . In a precedent case, an Austrian civil court has recently confirmed a claim for the refund of payments to a video game company. The court held that the digital card packs offered by Sony Interactive Entertainment (‘Sony’) as console manufacturer in the popular football (soccer) game ‘FIFA’ constituted unlawful gambling. As a consequence, the underlying contracts were considered to be void and the company ordered to refund the gamer. 2 The process funding company that had been pushing the case – who seemingly hopes to attract many disgruntled players – already hails the judgment as a “bombshell” for video games industry. 3 Although the court’s conclusions on defining card packs in video games as gambling may seem legally questionable, the judgment may arguably lead to more legal peril for video games publishers. A very brief history of German gambling regulation The regulation of gambling in Germany is a long story with many twists. Under the first it-eration of Germany’s overarching regulatory framework, the Interstate Treaty on Gambling 4 (the ‘IST’), a total ban on online gambling on the internet was enacted in 2008. Although a legislative amendment of 2012 provided for a limited licensing process for sports betting as an exception from the state monopoly on betting, courts
concluded in 2015 that regulators had conducted the licensing process in a non-transparent and discriminatory way towards applicants from other EU Member States. 5 Also, the Court of Justice of the EU (the ‘CJEU’) had consistently confirmed that the sports betting monopoly and the lack of transparency in the 2012 licensing process were infringing the freedom of services of operators under Art. 56 TFEU 6 in a series of judgments, including Carmen Media 7 , Markus Stoss 8 , Winner Wetten 9 and Ince 10 . As a consequence, no licences were awarded during that time and op-erators remained in a legal limbo, relying on their freedom of services when continuing to operate in Germany. It took the German state legislatures until July 2021 to fully implement the licensing of sports betting, so-called ‘virtual slots’ games and online poker under a revised Interstate Treaty on Gambling (the ‘IST 2021’). Accordingly, these verticals may cur-rently be offered legally online in Germany by licensed operators. How the situation in player claims unfolded A steady increase of claims for refund of losses filed by players in civil courts due to alleged-ly unlawful operations (in industry speak simply referred to as ‘player claims’) during the unregulated era became noticeably roughly 2½ years ago, coinciding with ever-more-prominent advertising of specialised legal services providers representing players, such as Dr. Redell, Glücksspielhelden (‘gambling heroes’) or CLLB 11 . Since then, a number of civil courts have sided with the players. As an early example, the District Court of Giessen, in a judgment of 21 January, 21, ordered a gambling operator
1 Cf. https://www.business-on.de/gamingindustrie-womit-wird-der-meiste-umsatz-generiert.html. 2 District Court of Hermagor, judgment of 26 February 2023 – the judgment has not officially been released at the time of writing, but is referenced in a number of press releases, including: https://rsw.beck.de/aktuell/daily/meldung/detail/oesterreichisches-gericht-stuft-lootboxen-als-illegal- es-gluecksspiel-ein. 3 https://www.heise.de/news/Lootboxen-in-FIFA-Sony-soll-in-Oesterreich-Zahlungen-zurueckerstatten-7536591.html. 4 German term: Glücksspielstaatsvertrag, abbr. GlüStV. 5 Higher Administrative Court of Hesse, decision of 16 October 2015, file no. 8 B 1028/15, ZfWG 2015, 478 ff. = NVwZ 2016, 171 ff. 6 Treaty on the Functioning of the EU. 7 CJEU, judgment of 8 September 2010 in case C-46/08, Carmen Media. 8 CJEU, judgment of 8 September 2010 in joined cases C-316/07, C-358/07 to C-360/07, C-409/07 and C-410/07, Markus Stoss, Avalon & Happel. 9 CJEU, judgment of 8 September 2010 in case C-409/06, Winner Wetten. 10 CJEU, judgment of 4 February 2016 in case C‑336/14, Ince. 11 Cf. https://www.redell.com/online-casino-geld-zurueck, https://www.gluecksspielhelden.de/ and https://www.cllb.de/verbraucherthemen/ online-casino-verluste-zurueckholen/.
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IMGL MAGAZINE | APRIL 2023
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