CJEU Clarifies Applicable Law for Director Liability in Cross Border Online Gambling: Case C 77/24 Wunner

On 15 January 2026, the Court of Justice of the European Union (CJEU) delivered its long‑awaited decision in the Wunner (Case C‑77/24) proceeding, a landmark ruling with profound consequences for director liability in the online gambling sector. The decision resolves two pivotal conflict‑of‑law questions:

(1) whether claims against directors fall within the scope of the Rome II Regulation, and

(2) in cross‑border online gambling disputes, where the damage occurs for purposes of determining the applicable law.

The judgment confirms that players may generally rely on the law of the Member State in which that player is habitually resident when seeking to establish tort liability against directors of foreign operators lacking the required local licence.

For Austria, a jurisdiction already marked by consumer‑friendly case law and strict regulatory standards, the ruling consolidates its position as the litigation forum for such claims.

 

Background of the Case

The proceedings originated from a request for a preliminary ruling submitted in January 2024 by the Austrian Supreme Court, arising from a tort‑based player refund claim against a Maltese online casino operator that lacked the required Austrian licence under the national monopoly regime. After the operator became insolvent, the plaintiff – an Austrian resident who had participated in unlicensed online games from Austria – sued the company’s director personally to recover his gambling losses.

Application of the Company‑Law exemption under Article 1(2)(d) Rome II

Article 1(2)(d) excludes all non‑contractual obligations from Rome II which arise out of company law matters, such as:

• creation and internal organisation of companies,
• legal capacity and winding‑up,
• personal liability of corporate officers as such for the obligations of the company.

The CJEU held unequivocally that the exclusion does not apply to claims against directors arising from violations of external obligations—in this case, national prohibitions on offering unlicensed gambling services in Austria.

An obligation is excluded only where it is inherent in the functioning, management, or organisation of the company. Here, the director’s alleged liability stems not from internal corporate governance but from infringement of a public‑law prohibition. Therefore, the action falls within the scope of Rome II.

This aligns with the analysis earlier provided by Advocate General Emiliou, who noted that violations of national gambling laws constitute general non‑contractual obligations subject to Rome II.

 

Where Does the “Damage” Occur?

Article 4(1) Rome II determines that the law applicable to a non‑contractual obligation arising out of a tort or delict is the law of the country in which the damage occurs, irrespective of the place where the causal event happened. This rule anchors the assessment of liability in the jurisdiction where the direct damage (lex loci damni) materialises.

The court reaffirmed in the case at hand that  “damage” refers to the actual manifestation of harm to the victim’s legally protected interests. The court concluded that the alleged damage occurred where the player participated in the unlawful gambling, i.e., the player’s habitual residence.

Losses on the player account are merely an indirect consequence and do not determine the applicable law. Online gambling, due to its nature, “takes place” at the location of the participating player (i.e. Austria), not the operator’s server infrastructure (i.e. Malta).

Deviation from the general rule of lex loci damni is permissible only in strictly limited circumstances. As a derogation provision, Article 4(3) Rome II must be interpreted narrowly: it is allowed only where an overall assessment shows that the tort or delict is manifestly more closely connected with another country, thereby preserving the Regulation’s aims of predictability and legal certainty. Although a pre‑existing relationship – such as a contract – may indicate such a closer connection, its existence alone does not suffice to displace the law designated under Article 4(1) or (2). The court retains discretion to determine whether a significant factual link exists between the non‑contractual obligation and the country whose law governs the pre‑existing relationship.

The court thereby emphasised that operators and directors can reasonably foresee that offering unlicensed gambling services into another Member State exposes them to liability under that country’s law.

As a result, Austrian law applies because the player engaged in the games from Austria. This approach reflects earlier market analyses noting that the Advocate General’s reasoning effectively places the point of damage in the player’s home state.

 

Consequences for Directors

The applicable law of the player’s habitual residence significantly heightens risk for directors, who can no longer rely on shifting proceedings to Malta or invoking Maltese law, a tactic often reinforced by Malta’s Bill 55/Article 56a, which sought to block enforcement of foreign judgments against Maltese‑licensed operators.

To date, almost all proceedings in Austria against managing directors have been suspended due to the pending decision in the Wunner case. Now it will have to be examined whether the requirements for damages are justified against the managing directors, in particular whether their conduct was actually culpable.

Depending on the period of gaming activity, a different outcome could be expected here. The wave of lawsuits beginning in 2020/2021 and an increase in Supreme Court rulings from this period onwards could be seen as a possible starting point for this.

Another relevant point is the question of the statute of limitations. While the statute of limitations for enrichment law in Austria is 30 years, the statute of limitations for damages is generally three years from the time of knowledge or possible knowledge of the damage and the party responsible for it. Although this could in principle help to bring many proceedings to an end, there is a risk that the requirement to be aware of the damage and the party responsible for it could be interpreted in an excessive and consumer-friendly manner in the present circumstances.

 

Practical Outlook for Player Claims

The Wunner decision constitutes a turning point for online gambling regulation within the EU. By affirming the applicability of Rome II and anchoring the place of damage in the player’s habitual residence, the CJEU has strengthened consumer protection, reinforced Member State sovereignty in gambling regulation, and significantly expanded the exposure of directors operating across borders.