Online gambling has been a hot topic since legalization in October 2021. Both socially and politically, there is often fierce debate about the success of legalization, with the Christian Democrats in particular speaking out as a fierce opponent of the current gambling policy. Before online gambling was legal in the Netherlands, many Dutch people often played unprotected with illegal providers, mostly based in Malta. It is estimated that the turnover of illegal providers in the Netherlands was almost €500 million before 2021. A large number of players who participated in this unlicensed gambling offer are now trying to recover the gambled amounts through court proceedings, which has also flared up the gambling debate in the courts. But are these advances promising and what are they based on?
In a number of recent judgments, courts have ruled on so-called “player claims.” Although the claims were almost identical, the verdicts vary considerably in terms of content. In all proceedings, players claim that the agreements they have concluded with the unlicensed providers be declared invalid. If an agreement is void, it is deemed never to have existed, so the provider is obliged to refund the lost amounts. Pokerstars and BWIN were ordered by the Overijssel District Court to reimburse their players' bets for offering online gambling without a license.¹ On the other hand, the Zeeland-West-Brabant District Court ruled that BWIN did not have to repay a player because the agreement was not void. The court stated that the ban in the Gambling Act (“Wok”) goes beyond just protecting the player and that the ban on offering games of chance without a license (article 1 Wok) has lost its scope due to social developments in recent years.²
The differing rulings of the various courts do not contribute to the legal certainty of both players and providers. However, that is changing: in fact, in an interim judgment in a case between a player and a provider in Malta, the courts of North Holland and Amsterdam jointly asked the Supreme Court for a preliminary ruling on how courts should rule on these player claims.³ The preliminary questions are as follows:
Question 1: Did the Wok initially aim to affect the validity of conflicting legal acts?
Question 2: If so, has that meaning — after being initially present — been lost due to social developments and/or in view of the Gaming Authority's enforcement policy?
Question 3: Is a gaming agreement between a consumer residing in the Netherlands and an internet gambling provider that does not have a license within the meaning of the Wok a void agreement within the meaning of article 3:40 of the Dutch Civil Code?
Question 4: When answering question 3, does it still matter whether the gambling provider (or an affiliated entity) met the Gaming Authority's prioritization criteria?
Question 5: If the answer to question 3 is affirmative, what legal effects does that have? Is a claim for reimbursement of the loss suffered due to undue payment attributable?
In the interlocutory judgment, the court gave its preliminary view on the questions. Regarding the first question, it appears that the court is of the opinion that DeWok is intended to affect the validity of gambling agreements that are contrary to the ban on offering games of chance without a license. With regard to the second question, the court stated that there was no loss of the scope of the Wok, as the Gaming Authority has always been consistent in its enforcement policy and there has been no social change that could nullify this. With regard to the third question, the court is of the opinion that a gambling agreement between a consumer and a provider of online gambling that is not licensed is a void agreement under article 3:40 of the Dutch Civil Code. In light of question 4, it is not important whether the provider met the Gaming Authority's prioritization criteria, because the Gaming Authority has always made it clear that failure to take enforcement action against parties that met the prioritization criteria should not be seen as a tolerance to act in violation of the Wok. On question 5, regarding the legal consequences of the nullity of the agreement, the court does not feel free to make suggestions about this to the Supreme Court. The only thing she states is that payment was made in execution of the void agreement without a legal basis for this payment, but what is the result is for the Supreme Court to decide.
Although this is only an interim judgment and is therefore not a (binding) final verdict, it will still have major consequences for the player claims cases that are already ongoing. The court may decide to hold cases that are currently being heard before it with similar issues until the Supreme Court has given an explanation, in order to ensure consistency between the various cases. Procedures in which the court has already ruled in the first instance are not directly affected by the interlocutory judgment. For these parties, the longer appeal period (three months in civil cases) continues. However, a provider may choose to file an appeal and request the court, in its appeal or in the statement of grievances, to continue the substantive hearing of the case until the Supreme Court has ruled. In addition, the interlocutory judgment will set a precedent for similar cases to follow.
The question about the consequences of illegal online gambling offers not only exists in the Netherlands, but also raises the necessary discussion internationally. The Austrian Oberster Gerichtshof (equivalent of the Supreme Court) has ruled several times that the gambling agreements with players concluded by unlicensed foreign providers are null and void, so they are obliged to compensate the losses. In Germany, preliminary questions have been submitted to the European Court of Justice concerning the consequences of the nullity of gambling agreements. Until then, all cases have been suspended. If the European Court of Justice considers itself competent to rule on this, this will have consequences for the Member States of the European Union and thus also the Netherlands. The Supreme Court may therefore make its judgment dependent on the ruling of the European Court.
In any case, the issue raises many questions, including with regard to the players. At the time of their deployment, they were aware of the fact that they were entering into an agreement with an unlicensed gambling provider. The claim is directly linked to the result they have achieved. If the players had made a profit during the game, they would never have filed a claim. As a result, the focus is shifting from the legal question about the nullity of the agreement by offering an online game of chance without a license and what the consequences are, to whether or not they made a profit with an online game of chance. Although the court will rule on the legal battle, this development is at least questionable from an ethical point of view.
If you have any further questions about this subject, please contact the specialists at our office.
Stef van der Veldt
lawyer
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