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888 Holdings said it has set aside £116m (€135m) to cover legal and regulatory matters in Austria and Germany, a step which demonstrates the cost to online gambling operators of a tide of lawsuits seeking player refunds.
European online gambling companies have faced a wave of player refund lawsuits in Austria, Germany and now potentially the Netherlands, largely filed by litigation funding companies.
The lawsuits target companies operating in the countries before licensing, or in Austria where Casinos Austria has an online casino gambling monopoly.
About £113m of the £116m is being set aside for the Austrian and German claims, mostly relating to its Mr Green brand, 888 said.
The allocation, as of the end of 2023, was revealed in the company’s annual report, which was released on April 15.
888 cited a “particular acceleration of claims since 2020” due to marketing campaigns by the litigation funders.
In 2022, the company set aside £86.2m just for Austrian claims.
Recently, a Dutch court ordered Flutter Entertainment and Entain to pay player claims for losses incurred before legalisation of online gambling in 2021, a ruling that could open the door for a number of claims in the Netherlands.
888, however, may not be hit hard there, as it has what it calls a “dormant” licence application.
In Germany, lawyers have found a potential legal ruling affecting online sports-betting claims to be perplexing.
In lawsuits seeking to void gambling contracts, therefore making losses refundable, case law suggests that the absence of a law legalising online slots and casino to be sufficient, said Joerg Hofmann, a gambling attorney with Melchers Law.
But applying it to sports betting is “questionable”, argued Hofmann in a post written for Gaming in Germany.
Online casino was clearly not legal before 2021, but 2012 sports-betting legislation that was never fully implemented due to litigation has led to a legal argument that companies applied for licences that were never issued and should therefore get some level of immunity.
But the Federal Court of Justice has taken “a left turn”, said Hofmann, instead issuing an indicative order that suggests it will rule in favour of the gambler seeking a refund of losses.
The first civil senate of the court noted plaintiff claims that the online gambling company violated provisions of the unimplemented law such as €1,000 monthly limits on stakes and restrictions on cash-outs.
If the court rules in line with its indicative order, “all gambling losses that are not time-barred would possibly be affected, insofar as operators have violated the relevant restrictions”, Hofmann said.
A hearing is scheduled for May 2.
London-listed 888 is seeking to reverse a 35 percent stock slide since last September.
Last month, 888 announced plans to change its name to Evoke Plc and focus on the core markets of the UK, Italy, Spain and Denmark, where it generated about 85 percent of its revenue.
Also last month, it wound up its partnership with Authentic Brands’ Sports Illustrated brand and announced a sale of its consumer-facing US assets to Hard Rock Digital.
