Commission to Examine Malta's Disputed Gaming Law Due to Legal Doubts
The Scrutiny over Malta's Gambling Bill
The European Commission is closely examining Bill 55, a controversial gambling bill recently passed by Maltese MPs, which aims to grant immunity to operators licensed by the Malta Gaming Authority. However, concerns about its compliance with EU legislation have arisen, prompting the Commission to request additional information from Maltese authorities.
Sabine Verheyen, a member of the European Parliament, posed three questions to the Commission about the bill's legality under European law and the potential consequences if Malta were found to violate EU regulations.
In response, European Commissioner for Justice Didier Reynders stated that the Commission would assess the bill's conformity with EU law. He also mentioned that there is no evidence of any ties between Maltese government officials and the island's gambling industry.
Article 258 of the Treaty on the Functioning of the European Union grants the European Commission the power to initiate formal action against Member States suspected of breaching EU law. Reynders, however, did not comment on the possibility of penalties in this situation.
If approved by the European Commission, the bill will amend Malta's gambling laws, primarily with the goal of providing legal protection to MGA-licensed operators. One of the key provisions of the bill is a measure that prevents courts from awarding damages to plaintiffs if their claims are related to activities permitted under the operator's MGA license. This provision is intended to shield operators from potential legal repercussions.
The bill is also designed to safeguard operators operating in the European grey market, who have been sued as a result of their gaming activities. In jurisdictions such as Germany and Austria, courts have forced operators to reimburse players for their losses. Operators have frequently invoked European freedom of services and questioned the compatibility of local licensing systems with European legislation, leading to payment refusals.
As the European Commission continues to evaluate Malta's gaming law, the consequences of their decision will be significant for operators and the EU gaming industry as a whole. The decision will establish whether the proposed legislation aligns with European law or if adjustments are necessary to achieve a balance between operator protection and legal compliance.
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Enacted in June 2023, Malta's Bill 55 allows Maltese courts to refuse the enforcement of foreign judgments against Maltese-licensed gambling operators, particularly in cases involving player loss claims. This provision offers operators protection from liability in cross-border disputes, such as those involving German customers.
However, the bill's compliance with EU law is currently under review by the Court of Justice of the European Union (CJEU). Germany has challenged Malta's framework, raising questions about whether it violates the EU principle of mutual recognition of judgments and undermines consumer protections under the Brussels I Regulation (Recast). If the CJEU rules against Malta, the country could face infringement procedures, potential fines, and financial liability, as well as reputational risks resulting from further scrutiny of its iGaming licensing model, which contributes to approximately 12% of its GDP.
- The European Commission is currently assessing Malta's Bill 55, which offers immunity to operators licensed by the Malta Gaming Authority, to determine its compliance with EU law, as concerns have arisen about its potential violation of regulations.
- The bill, which aims to protect Maltese-licensed gambling operators from liability in cross-border disputes, such as those involving German customers, is under review by the Court of Justice of the European Union (CJEU). If the CJEU rules against Malta, the country could face penalties including infringement procedures, potential fines, financial liability, and reputational risks.
- The amendments to Malta's gambling laws, if approved by the European Commission, will potentially force operators in the European grey market, who have been sued for their gaming activities, to face fewer legal repercussions, while still maintaining compliance with EU regulations.
