It was earlier this summer that the Malta Gaming Authority (MGA) caused some controversy among the European gaming industry. It was all because of the approval of Bill 55, which is meant to grant protection to offshore operators based in Malta from foreign liabilities.
Gaming Amendment Act
Known as the Gaming Amendment Act, the bill was signed by the President of Malta, George Vella on June 16th. Maltese courts are to disregard and refuse to enforce any foreign judgment against Malta-licensed operators that are operating in the European market. Basically, it shields Maltese operators from legal action when their licensed gaming services are called into question.
As you can understand, the rest of Europe wasn’t impressed by this decision and Germany is now putting its foot down and speaking up about it.
The Recast Brussels Regulation
It’s the German gambling regulator called the Gemeinsamen Glücksspielbehörde der Länder (GGL). According to GGL, it goes against the Recast Brussels Regulation and should not be compatible with European Law.
The Recast Brussels Regulation is a European Law from 2013 that regulates the jurisdiction, recognition and enforcements of legal judgments between EU member states.
With that said, the GGL also made it clear that it’s not up to them to decide if Bill 55 should be allowed.
Bill 55 Up for Examination
Didier Reynders holds the position as the European Commissioner for Justice. Reynders actually spoke up last month saying that they were ready to examine the legislation’s compatibility with EU law. More information from Malta had also been requested.
Normally it’s the European Court of Justice that is the final decision maker on these things.
How Did Bill 55 Come Into Play?
The reason for Bill 55 in the first place was because of several cases in Germany and Austria. Precedents in both countries found that operators can be sued by a player for all historic losses.
Some of the operators who lost in court ended up paying while others continued to fight the court’s decision. This led to the lawyers turning their focus towards suing the operators in Malta, where the businesses are based.
The operators then based their defense on the laws surrounding the European free movement of services. The accusing side argues that they have the right to prevent Malta-based operators from taking bets in their jurisdictions, based on a 2017 decision from the European Commission.
Malta Gaming Authority Argues Back
The MGA refuses to back down and refers to the Recast Regulation, allowing a EU member state to refuse to recognise a legal judgment, should it not match with the principles of its legal system.
Not the Intention of Bill 55
According to the Maltese regulators, the intention behind the controversial law was not to create new exceptions to existing law. The reason was “to enshrine into law the long-standing public policy of Malta in relation to the gaming sector”.
Also, MGA says the law will not prevent every legal action taken against an operator holding a MGA license. There are specific conditions in place.
To give an example, an operator could only be protected from a suit when its gambling activities are legal according to the Maltese Gaming Act.
To Be Continued
I feel like Bill 55 will continue to ruffle the feathers of the EU gambling community and it will be interesting to see what the outcome will be.