German Court Sides with Online Gambler

A German court has ruled that a gambler doesn’t have to pay his debts because the online site where played was not licensed in the country. Landesbank Berlin, which processed the bets, must absorb the loss.

Far-reaching repercussions?

A German court has ruled that a man who played and lost on an online gaming site does not have to pay off his debts. The online operator was not identified. Landesbank Berlin, which processed the payment made with a Visa card, was the big loser.

The gambler argued in the District Court of Munich that the bank had no right to collect the debt because online casino gaming is illegal in Germany. The court agreed, ruling that the bank should have identified the transaction as gambling and refused to process it.

According to iGamingBusiness.com, analysts at Regulus Partners say other gamblers could refuse to pay their debts, or banks in Germany and beyond could refuse to handle gaming debts altogether.

“The decision almost certainly causes another reason (or excuse) for banks to examine their online gambling risk exposure more generally,” said an opinion from Regulus Partners.

“Typically not splitting hairs about ‘grey’ or ‘regulated’ (especially if the entity is offshore): the fewer mainstream banking/processing options available to operators and customers, the less developed a mass market can be; the higher the risks within the supply chain (legal and commercial), and; self-fulfilling, the less remunerative a focus on compliance becomes.

“Critically, this risk is global and contagious, not localized,” the firm concluded. “Online gambling related payment issues are likely to be a key problem in the U.S., for example.”