Malta’s recently enacted amendment to its Gaming Act (Bill 55) has generated a backlash in the European Union (E.U.), especially in Germany. That country wants to enforce monetary judgments in civil cases against Maltese gambling sites, Yogonet reported August 28.
However, the Malta Gaming Authority (MGA) defends the amendment—which Malta’s President George Vella affixed his signature to in June—arguing that it conforms to E.U. laws.
The law now protects licensed operators based on the island nation from offshore legal liability, specifically court judgments from other national courts, such as in Germany.
The MGA released this statement on August 28: “Bill 55, also known as Article 56A of Malta’s Gaming Act, does not go against European law, but protects Malta-licensed operators from legal liability resulting from their gambling activities, when the activity is covered under their MGA license.”
The law rejects overseas judgments related to online gaming in Malta—as long as what they are doing results from their gambling activities that are allowed by their license.
The MGA statement was in answer to a statement by Germany’s federal gaming regulator, Gluecksspiel (GGL), that the bill was a “protective shield. ” The regulator continued, “We are of the opinion that this law should not be compatible with European requirements for the recognition of decisions (Regulation (EU) 1215/2002.”
GGL claims the law was enacted in reaction to a dramatic increase in successful gambling loss repayment claims by players against Maltese sites where players claimed that the games offered were illegal in their country.
The MGA referred to the Brussels Recast Regulation, which spells out how legal disputes between members are resolved. It quoted a section that says a country may decline to recognize a legal judgment if it conflicts with its legal system. It added: “The legislator’s intention behind the introduction of Article 56A is to enshrine into law the long-standing public policy of Malta in relation to the gaming sector.”
The MGA also noted: “the scope of the amendments enacted into law is highly restricted, and the law does not preclude any action whatsoever from being taken against a licensee. Therefore, not every judgment relating to the operations of gaming operators with a Maltese license would be in violation of Maltese public policy.”
The MGA added that the law only applies when the action by an overseas court “conflicts with or undermines the legality of the Maltese framework” and is an activity considered lawful by the Gaming Act and its regulations. It argued that the island’s legal infrastructure fully conforms to European law.
Malta is the host of many gaming companies who often choose to locate there because of its tax benefits and access to the E.U. As a result, some of its home-based brands also compete in many European and international markets.
Bill 55 will immunize them from overseas regulations or sanctions, although Malta is still subject to the European Court of Justice, which could decide the matter if Germany appeals that high.
At this point, GGL has referred its opinion to the German federal states. In its statement it added: “We currently do not see any reason to take action beyond this, as the Federal Ministry of Justice has already approached the European Commission on this matter. We therefore assume that proceedings will be initiated accordingly.”
The adoption of Bill 55 comes at a time when news articles report that the MGA is taking another look at its opposition to the Macolin Convention, which has a different definition for illegal sports betting. The Convention would define an illegal sports betting site as one that offers betting services to jurisdictions where that is considered illegal.
