On the 16th April 2026, the Court of Justice of the European Union (the “CJEU”) delivered its preliminary ruling in Case C-440/23 (FB v European Lotto and Betting Ltd, Deutsche Lotto Und Sportwetten Ltd).
The CJEU ruled that EU law does not preclude a Member State from restricting certain online gambling services, even where those services are lawfully authorised in another Member State, nor does it prevent that State from attaching civil-law consequences to such restrictions. The CJEU described that a consumer may thus seek repayment of losses in his jurisdiction from an operator based in another Member State if the relevant gambling activity was prohibited in the consumer’s country of residence and that law is compliant with EU law.
The case concerned two online gaming operators incorporated in Malta and licensed by the Malta Gaming Authority. These operators offered online virtual slot machine games and betting on lottery draws, and their platforms were accessible to users in Germany. Between June 2019 and July 2021, a German resident used these services and incurred financial losses. At that time, German law imposed a broad prohibition on online gambling, allowing only limited exceptions. Virtual slot machines and betting on lottery results fell within the scope of the prohibition.
The consumer initiated legal proceedings to recover the amounts lost. His claims were later assigned to a third-party company, which pursued the matter before the Maltese courts. The national court referred seven questions to the CJEU, including whether the EU principle of freedom to provide services precludes such national legislation where the operator is licensed in another Member State. It also sought clarification on the legal impact of subsequent reforms in Germany, which replaced the general prohibition with a licensing regime, and on whether contracts concluded in breach of the earlier prohibition could be declared void, allowing restitution of losses, in that Member State.
In its ruling, the CJEU confirmed that EU law does not preclude Member States from prohibiting certain forms of online gambling, where this is intended to channel gambling into regulated environments and limit unlawful parallel markets. The CJEU also held that Member States may recognise the legal consequences of such prohibitions, including declaring related contracts void and allowing claims for restitution, as this would be result of the illegality in that jurisdiction.
Although online gambling services fall within the scope of the EU Treaties as services, the freedom to provide them is not absolute. Restrictions may be justified by overriding reasons in the public interest, particularly consumer protection and the safeguarding of public order. In the absence of EU-wide harmonisation, Member States retain discretion in determining the level of protection they consider appropriate, taking into account national moral, cultural, and social considerations.
The CJEU noted possible heightened risks associated with online gambling compared to traditional, in-person gambling, including constant accessibility, user anonymity, lack of direct social oversight, potentially unlimited frequency of participation, and a possible appeal to younger or more vulnerable individuals and against such backdrop, ruled that a Member State may choose to prohibit certain online gambling activities while allowing others, or subject them to different regulatory frameworks. The existence of strong consumer demand for online gambling, or the fact that an operator is lawfully established and regulated in another Member State, does not in itself render a national prohibition disproportionate or inconsistent. Each Member State remains entitled to define its own regulatory approach.
The CJEU further clarified that Germany’s legislative reform, which had later introduced a licensing system for such activity, does not undermine the validity of the previous prohibition. Such a transition may reflect a policy of controlled market liberalisation and does not negate the legal effects of the earlier regime. Similarly, transitional arrangements do not prevent courts from applying the legal consequences of the prohibition during the period in which it was in force.
The CJEU confirmed that EU law does not preclude claims for the recovery of losses incurred under prohibited gambling contracts in the consumer’s jurisdiction. Questions concerning the invalidity of such contracts and their legal effects fall within national law. Provided the national rules comply with EU principles, the nullity of the contract arises from its illegality. Participation by the consumer, even where the operator holds a licence in another Member State, does not amount to an abuse of rights under EU law albeit it is to be noted that any assessment of bad faith remains a matter for national courts.
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Author: Dr Terence Cassar