Navigating Controversy: Malta’s Proposed Legislation Aims to Safeguard Operators from International Legal Challenges

08 June 2023

Malta’s Parliament has taken steps to ensure that companies operating under the Maltese online gaming license continue to enjoy the benefits and protections of this license.

In recent years, a number of players who have placed bets with Malta licensed iGaming operators and lost, have sought to cancel their loss and recover their money by suing said operators for reimbursement. The cases were primarily filed in Austria and the central thrust of the litigation is based on the fact that these operators did not have an Austrian gaming license too.

Introducing Bill 55

In response to the Austrian lawsuits, the Maltese Ministry of Economic Affairs promoted an amendment to the gaming regulations of Malta. Once enacted, this law authorizes Maltese courts to reject the recognition and enforcement of any foreign judgment or decision pertaining to the terms of a gaming license issued by Malta. Proponents of the bill argue that this provision is already ingrained within the country’s constitution.

An extract from the full amendment reads as follows:

56A. Notwithstanding any provision of the Code of Organization and Civil Procedure or of any other law, as a principle of public policy:

(a) No action shall lie against a licence holder and, or current and, or former officers and, or key persons of a licence holder for matters relating to the provision of a gaming service, or against a player for the receipt of such gaming service, if such action:

 (i) conflicts with or undermines the legality of the provision of gaming services in or from Malta by virtue of a licence issued by the Authority, or the legality of any legal or natural obligation resulting from the provision of such gaming services; and

 (ii) relates to an authorised activity which is lawful in terms of the Act and other applicable regulatory instruments.

(b) The Court shall refuse recognition and, or enforcement in Malta of any foreign judgment and, or decision given upon an action of the type mentioned in sub-article (a).

Bill draws criticism from international lawyers

As expected, Bill 55 which should obtain parliamentary approval later this month, has received strong criticism from the lawyers acting for the plaintiffs in the cases in Austria (as well as in Germany).

In a letter to the European Commission, lawyers Dr Karim Weber and Dr Benedikt Quarch accused the Maltese government of undermining the European rule of law and blocking the fundamental rights of EU citizens and residents. They argue that the bill goes against the principle of separation of powers and interferes with the judiciary’s independence.

Contrarily, the Malta Gaming Authority has consistently maintained that its licensed operators have the legal right, in terms of the EU’s fundamental rules on the free movement of goods, capital and services.

How we can help

The team within AE Legal has, for the past fifteen years, been working closely with the general counsel of iGaming companies, regulators, affiliates, integrators, heads of sales and specialised accountants. Through them, we have come to know and understand the industry very well. These insights have made it possible for us to master many legal briefs in this field and to deliver the desired result.

Engage with lead partner Kris Scicluna if you require a firm to defend or prosecute your cases in the Maltese courts, tribunals and arbitration centers. We can be reached on info@ae.com.mt or kscicluna@ae.com.mt

Key Contacts

Kris Scicluna Director, AE Business Advisors

Kris Scicluna

kscicluna@ae.com.mt

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