Austria’s Supreme Court Orders Bet-at-home to Pay €2.8m in Player Losses

Player Losses and Legal Ruling

The case involved a player who had incurred substantial losses on Bet-at-home’s platform between August 2018 and July 2020.

The Austrian court determined that the player was a gambling addict and was therefore considered “legally incapacitated” while engaging in online gambling. As a result, the player was entitled to recoup their losses.

Although Bet-at-home’s defunct subsidiary, Bet-at-home.com Entertainment Ltd, had already set aside €2.3m to address this case, the court held Bet-at-home AG and its other Malta-based subsidiary, Bet-at-home.com Internet Ltd, liable for the full amount of €2.8m.

Impact on Bet-at-home’s Financials

Bet-at-home is currently evaluating how the payout will affect its projected 2024 revenue, which was initially estimated to fall between €45m and €53m.

In its H1 2023 earnings report, the company anticipated EBITDA figures ranging from a negative €1m to a positive €2.5m.

The payout will likely impact these estimates as the company continues to navigate financial and operational difficulties.

Austrian Online Gambling Landscape

Austria operates a government monopoly on online casinos, with Win2Day, a subsidiary of Casinos Austria, holding exclusive rights.

Foreign online gambling brands, including Bet-at-home, are limited to offering sports betting.

In October 2021, Bet-at-home withdrew from the Austrian iCasino market after a Supreme Court ruling found that foreign iGaming brands were operating illegally in the country.

This decision invalidated contracts with players, allowing them to pursue legal action to recover their gambling losses.

Despite discussions in early 2021 about re-regulating Austria’s online gambling market and introducing a new gambling regulator, no concrete steps have been taken, and it remains unclear if other iCasino brands will be permitted to enter the market in the future.

Further Challenges in the UK and Switzerland

Bet-at-home’s troubles extend beyond Austria. In July 2022, the company withdrew from the UK market following the suspension of its licence by the UK Gambling Commission.

This decision further weakened the operator’s financial standing, and by September 2022, Bet-at-home warned that it might face liquidity issues.

In Switzerland, the company is dealing with a separate legal challenge.

In July 2023, the Swiss Federal Supreme Court ruled that Bet-at-home.com Internet Ltd must pay a significant VAT bill.

The ruling covers a €1.3m payment for VAT on gambling activity between 2014 and 2017, as well as an additional €2.7m covering 2018 to June 2024.

The company has announced plans to appeal the decision.

European Court of Justice to Rule on Player Losses

The issue of players seeking compensation for gambling losses has been a persistent legal problem for operators in Austria and Germany.

Courts in both countries have typically ruled in favour of players. However, a recent case in Austria saw a player ordered to return winnings to an unlicensed operator, reportedly Bet365.

The European Court of Justice (ECJ) is now set to address the broader question of player losses. Germany’s Federal Court of Justice has referred the matter to the ECJ, effectively halting civil proceedings in the country until the European courts issue a ruling.

This decision could have far-reaching implications for operators across Europe.