The European Court of Justice has ruled that player losses claims linked to online gambling must be assessed under the gambling laws of the player’s home market, a decision that casts serious doubt on Malta’s controversial Article 56A and could reshape dozens of pending cases across Europe.
In a judgment delivered on Thursday in a case brought by an Austrian player, the European Court of Justice confirmed that national gambling law governs where damage from online gambling is deemed to occur. The ruling is expected to influence not only cases currently before the ECJ, but also a growing backlog of similar claims moving through national courts. This is not a small clarification.
Austrian law applies where losses occur
The case concerned losses of €18,547.67 incurred between 2019 and 2020 through an online brand operated by the now-defunct Titanium Brace Marketing Limited. As in many player losses actions, the claimant argued that the gambling contract was invalid because the operator did not hold a local licence in Austria at the time.
A central dispute was which country’s law should apply. Directors of the operator maintained that the relevant activity took place in Malta, where the company was licensed, and that Maltese law should therefore govern the case. Maltese law does not provide for personal liability of company officers in such circumstances, which is precisely why this point keeps coming up.
The ECJ rejected that argument. In its judgment in Case C-77/24, the court held that the place where the damage materialised was the player’s state of residence. Given the nature of online gambling, which cannot be tied to a specific physical location, the court concluded that gambling activity should be deemed to take place where the player is habitually based. In other words, where the player sits matters more than where the licence sits.
At the time the losses were incurred, Austria operated a strict online gambling monopoly, under which only brands run by Casinos Austria were licensed. The ruling is widely seen as a setback for operators facing player losses litigation across Europe, particularly those that have relied on Maltese law as a defensive shield. It is hard to ignore the timing here.
By confirming that local gambling law determines liability, the ECJ has strengthened the position of claimants arguing that unlicensed gambling activity caused harm within their domestic market, regardless of where the operator was licensed. This is essentially the same point the court has circled around before, now stated more directly.
Article 56A faces renewed scrutiny
The decision also raises fresh questions over Malta’s Article 56A, introduced in 2023 as an amendment to the country’s gambling legislation. The provision seeks to prevent Malta from recognising or enforcing foreign court judgments that declare Malta-licensed gambling services illegal in another EU member state. That ambition has always been contentious.
Operators have leaned heavily on Article 56A in an attempt to block enforcement of player losses judgments issued by courts elsewhere in Europe. However, the provision has been controversial since its introduction, and opinions on its durability have been mixed at best.
In June, the European Commission formally challenged the amendment, warning that it was incompatible with EU law. In a letter published on 18 June, the commission said Article 56A unfairly shields Maltese licensees from legal action in other member states and undermines the principle of mutual trust between EU courts. The commission warned it could escalate the matter if Malta fails to address the concerns raised. Whether that threat carries real weight remains to be seen.
What it means
For operators, the ECJ ruling weakens arguments that Maltese law can override local gambling restrictions in player losses cases. Courts are now explicitly directed to apply the gambling law of the player’s home country when assessing liability, increasing legal exposure for operators active without local licences during transitional periods. This point bears repeating, because it is the core of the judgment.
For Malta, the judgment adds pressure at a sensitive moment. With Article 56A already under scrutiny from Brussels, the ECJ’s emphasis on local law may further limit the amendment’s practical effectiveness, even if it remains on the statute books. Some observers may question how much room for manoeuvre is actually left.
More broadly, the ruling reinforces a trend toward national control in gambling disputes, despite the cross-border nature of online play. While operators have long argued for legal certainty through EU-wide principles, the court’s position makes clear that consumer losses will be judged where they are felt, not where servers, licences, or corporate structures are located. That may not be a comfortable outcome for everyone involved.