Flutter and 888 battle back as Austrian operations called into question

Flutter Entertainment and 888 have railed against legal proceedings levied at both firms’ operations in Austria.

A legal challenge led by Austrian litigation financing company AdvoFin, law firm G&L Rechtsanwälte and lawyer Oliver Peschel, as reported by the FT, has seen the trio suggest Flutter and 888 are operating illegally in Austria.

The challenge argues that the two operators’ presence in Austria contravenes the de facto monopoly in the market, in the shape of operator Casinos Austria.

However, Flutter and 888 have challenged the claims, arguing that by holding a licence from the Malta Gaming Authority means they can operate legally in the market.

A Maltese licence allows firms to provide services to European players under EU law.

The debate around MGA-licensed firms operating in Austria has been rumbling on for some time. In February 2021, EGR reported on the operator fightback against such claims.

The debate has resurfaced after AdvoFin, G&L Rechtsanwälte and Peschel went to the Austrian courts to attempt to reclaim customers’ losses who had bet with so-called “illegal” operators.

According to the FT, Austria’s three highest courts have ruled that these operators should return any losses to players. As of the end of January 2023, more than 2,500 customers had been repaid losses totalling €75.8m by operators.

However, the legal trio is now taking the challenge to the Maltese courts after claiming €34m has yet to be returned to customers.

AdvoFin’s Stefan Bohar told EGR that the company would pursue operators in alternative ways, including suing directors and other companies within the groups in relation to Austrian gambling law.

Bohar added: “As from our side, we are convinced that the enforcement procedures will be successful, as any other result than a payment of the judgment would be against European Law.

“The cases themselves have already been decided in Austria, where the courts have ruled countless times that the Austrian Gambling law is in line with European legislation in terms of freedom of services and any other relevant piece of law.”

However, there appears to be a discrepancy among the Austrian courts.

Despite the aforementioned rulings, the Supreme Court in Austria also ruled that sports betting loss reimbursements would not be possible in four of Austria’s nine states given regulations there only apply to land-based gambling.

The case centred around the Austrian state of Styria, where it was established reimbursement claims had no basis in law as they apply in a similar way to online casino.

The three other states where the ruling could be theoretically applied are Vienna, Burgenland and Carinthia.

EGR understands 888 and Flutter remain confident in any case brought before the Maltese courts.

A PokerStars spokesperson told EGR: “PokerStars operates legally out of Malta under a Maltese licence in accordance with the freedom of services across member states under EU law.

“The court decisions being made under Austrian law are incompatible with these settled EU legal principles. As such, PokerStars will continue to vigorously defend these cases in Austria and when brought before Maltese courts.”

Additionally, an 888 spokesperson added that the firm was confident of the outcome of the legal case under the same principle of its Maltese licence.

The 888 spokesperson said: “The group only operates where it has a justifiable legal basis to do so.

“Like many other international leading gambling operators, the group services Austrian customers via a licence issued by the Malta Gaming Authority. This licence allows holders to offer their services outside of Malta where there are coherent legal arguments to do so, provided it complies with Maltese regulatory and legal requirements.

“While the Austrian Courts have challenged this, the group continues to contest the compatibility of the Austrian licensing regime within EU law.

“The group has taken extensive independent advice from lawyers and experts both inside and outside of Austria who agree the position adopted by the Austrian courts is contrary to the fundamental EU principle of ‘freedom to provide services’.

“The Malta Gaming Authority concurs with this view and therefore takes the position that gaming service providers licensed by it are able to offer their services in Austria entirely legally on the basis of their freedom to provide services within the internal market, insofar as they remain compliant with the Maltese regulatory and legal framework.

“Based on the extensive advice and opinion received, we are absolutely confident in our legal and regulatory position.”

EGR has also reached out to G&L Rechtsanwälte and Oliver Peschel for comment.