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Austrian gamblers struggle to recoup money from illegal betting sites after gambling groups face claims of violating the federal monopoly.
Austrian gamblers are having a hard time recouping lost money on betting websites owned by Flutter and 888, which the national supreme court has criticised for operating illegally because they violate the federal gambling monopoly.
The litigation financing organisations and lawyers have been financially supporting numerous cases on gamblers’ behalf since 2019. Casino Australia, the state-backed gambling firm, has held a monopoly on operators since 2016 and Austria’s three highest courts have ruled that other betting firms operating illegally should return any losses.
After court rulings and settlements, over 2500 gamblers have been repaid losses totalling €75.8 million as of the end of January 2023, according to the data from three main legal groups backing cases, AdvoFin, G&L Rechtsanwälte and lawyer Oliver Peschel. The firms receive a cut of the payouts.
But €34m in payouts has been withheld for longer than the fortnight-long grace period set out by the court. Lawyers state that the main criminal proceedings were from websites owned by 888 and Flutter. Enforcement action has taken place on these forms in the Maltese courts, where both gambling groups both have offices.
PokerStars, a Flutter-owned brand, has withheld approximately €17m following the lost cases and has paid only €1,795, according to the data compiled by three legal groups. Mr Green, owned by 888 has refused to pay out €12.6m whilst William Hill, another 888 subsidiary, has withheld around two-thirds of cash out of €6.7m in lost judgements.
Despite the ruling from the Supreme court, many groups operating in Austria argue the gambling monopoly is against the fundamental rights protected by EU law, including the freedom to offer services.
PokerStars stated that it was operating legally in Austria under the Maltese licence, “in accordance with the freedom of services across member states under EU law”, adding that the Austrian judgments were “incompatible with these settled EU legal principles.”
888 said “the group continues to contest the compatibility of the Austrian licensing regime with EU law”, adding that the Malta gaming authority shares this view. Flutter and 888 commented that they would face the court proceedings filed in Malta, where both operators are licenced.
Sven Thorstensen, AdvoFin’s working lawyer, wrote a letter to the chair of 888, Lord Jonathan Mendelsohn in January 2023. “At no point, Mr Green Ltd [made] contact with her and asked her where these funds are from and [whether] she would be financially able to suffer such tremendous losses,” wrote Thorstensen.
888 terminated its Chief Executive, Itai Pazner, and launched a probe to follow anti-money laundering processes on VIP customer accounts. The UK Gambling Commission has also fined 888 with £17.2m penalties issued in 2017 and 2022 for failings in money laundering and consumer protection.