In Case C-77/24, the Court of Justice of the European Union (CJEU) clarified two important questions arising from cross-border online gambling:

1. Whether company directors may incur personal liability under the law of the country where online gambling is offered, when such activity is carried out without the required national licence, and
2. Which country’s law applies when a player participates in online gambling from one Member State, while the operator is established in another.

The judgment is relevant not only to the gambling sector, but more broadly to online services offered across borders within the EU, where consumer participation and business establishment are in different countries.

Factual Background

Titanium Brace Marketing Limited (TBM), a company incorporated in Malta, operated an online casino offering games of chance across the European Union. TBM held a valid Maltese gambling licence, but did not hold a licence under Austrian law, which largely reserves the organisation of games of chance to the Austrian State, subject to limited exceptions.

Between November 2019 and April 2020, TE, a player domiciled in Austria, participated in online gambling via TBM’s website and incurred losses totalling EUR 18,547.67.

To participate, TE accepted TBM’s general terms and conditions and opened a player account. Funds were transferred from his Austrian bank account to a bank account held with a Maltese bank, which was opened in TBM’s name for the purposes of the player and used to record bets and winnings.

After incurring losses, TE brought legal proceedings in Austria not against the company itself, but against two of TBM’s directors, claiming that they were personally liable for allowing the company to offer online gambling in Austria without the required licence.

Procedural History

At first instance, the Austrian Regional Court dismissed the claim on the ground that Austrian courts lacked international jurisdiction.

That decision was overturned on appeal, with the appellate court finding that Austrian courts did have jurisdiction. The defendants then appealed to the Austrian Supreme Court.

The Supreme Court considered that the outcome depended on which law governed the alleged liability, and referred questions to the CJEU concerning the interpretation of the EU rules on applicable law for non-contractual obligations, namely the Rome II Regulation.

Key Legal Questions

The CJEU was asked to clarify two main points:

1. Does Article 1(2)(d) of the Rome II Regulation exclude claims for damages against company directors based on alleged breaches of national gambling laws?
2. In online gambling, does the financial damage occur:

• where the operator is established (Malta), or
• where the player participates from and suffers the loss (Austria)?

The Court’s Decision

Does the case fall within the Rome II Regulation?

The Court held that the claim is covered by the Rome II Regulation.

It explained that EU law excludes certain matters of company law from Rome II, such as duties that directors owe internally to the company. However, this exclusion does not extend to situations where directors are alleged to have breached general national laws that apply to everyone, such as gambling regulations.

In this case, the claim was based on an alleged breach of a statutory prohibition applicable to all operators, not on internal corporate duties. As a result, the Rome II Regulation applies.

Where did the damage occur?

The Court confirmed that, under Rome II, the relevant place is where the direct damage occurs, not where indirect consequences are felt.

In the context of online gambling, the Court recognised that participation cannot be tied to a physical location in the traditional sense. It therefore held that the relevant damage occurs where the player participates in the games, which, in practice, is the player’s place of domicile or habitual residence. In this case, that place was Austria.

The fact that the operator and the player account were located in Malta did not change this conclusion.

Why This Judgment Matters

This decision provides important guidance for cross-border online activity within the EU:

• For online operators, it confirms that offering services across borders may expose them, and potentially their management, to the laws of the country where users are based.
• For consumers, it clarifies that losses suffered through online participation may be legally connected to their country of residence.
• More broadly, the judgment illustrates how EU courts adapt traditional legal concepts to digital environments where activities are not easily localised.

The Court did not take a position on whether the gambling activity itself was lawful or unlawful under Austrian law, nor on whether the directors were ultimately liable. Those questions remain for the national courts to decide.