A ruling has been issued in a regional court in Austria which presents a host of fascinating questions for the gambling industry, whether or not the decision is later overruled by a higher court within Austria, or even, ultimately, by the European Court of Justice. I have no doubt that if the parties involved can afford the legal bills and the glare of publicity, this one could go all the way to the top.
The court ruled that an individual who says that he gambled away more than €2 million over the course of a decade in Vienna’s gambling halls was “partially incapacitated” by his addiction, thus rendering his bets invalid. Novomatic has been ordered to pay back the bets of the unnamed individual, in full, plus interest, a total of €2.5 million. In the case, the firm was also found to have breached national laws regarding stake limits and payouts for various slot machines.
Naturally, Novomatic, the giant of European gambling, have already promised to appeal the ruling. It’s worth noting that there is an Austrian precedent for the decision: in 2014, a court ordered Novomatic to repay €440k in the case of another addict’s play.
While there’s no immediate risk that courts in other European nations will start making similar rulings, such incidents can certainly catch the eye of regulatory authorities. There is a gathering trend to hold gambling companies more rigorously to account for both preventing and funding treatment for cases of problem gambling. This has come up particularly with cases of massive financial outlay by a customer, either of their own funds or stolen funds, while in the thralls of problem gambling.
Several major firms have been penalised in the UK and elsewhere just this past year for breaches of customer care and lack of due diligence with regard to source of funds and appropriate treatment of customers, including situations with high rollers. Lapses of diligence are critical matters for both low and high-rolling gamblers, but there is more incentive and profit in such lapses as the betting gets higher.
Still, for a court to actually rule that a firm is financially responsible for all losses incurred by a gambling addict is a huge step beyond that kind of regulation. But the court case does readily lend itself to a thought experiment. Imagine a nation where every gambling firm was financially responsible for any proven gambling addict’s losses, to the extent that person used the firm’s systems.
One might question whether demanding this level of harm avoidance is a fair burden to place on a firm, certainly, and whether it is commensurate with rational expectations on what’s possible. Still, just imagine how well-designed the customer care and due diligence systems would be for those corporations which managed to thrive in such a legislative environment. I’d bet they could get their problem gambler percentage down to a tiny fraction of what it is today. They’d certainly be hugely incentivised to do so.
Of course, in this hypothetical world, there would always be the black market to worry about, where problem gamblers could take their business, free to play, and, of course, to lose. If that market could not be kept to a minimum, then arguably the overall situation might end up being even worse than what we have today. Still, one can dream …
