Malta President George Vella has officially signed Bill 55 into law, which empowers Maltese courts to reject the acknowledgment and implementation of overseas judgments relating to online gambling in Malta. The bill has now been incorporated into the country’s existing Gambling Act, which regulates and supervises the industry.
The new legislation, known as the ‘Gaming Amendment Bill’ and sponsored by Honorable Silvio Schembri, MP Minister for the Economy and European Funds, protects Malta Gambling Authority (MGA) licensed operators from foreign enforcement actions under two circumstances.
“The scope of the amendments enacted into law is restricted, and the law does not preclude any action whatsoever from being taken against a licensee,” explained the Maltese gaming regulator on Wednesday.
The provisions shall only be applicable when the action – taken by an operator against a player, or a player against an operator – “conflicts with or undermines the legality of the Maltese framework, and is related to an activity which is lawful in terms of the Gaming Act and the other regulatory instruments applicable to the Malta Gaming Authority’s licensees.”
This effectively means that Maltese courts may refuse recognition and enforcement of actions in Malta requested by foreign betting and gaming regulators.
Malta hosts a wide array of B2B and B2C iGaming firms. Many iGaming businesses choose to get licensed in Malta because of the country’s tax benefits and EU market access. Due to the latter, several Malta-domiciled brands also operate in diverse European betting markets, as well as other regions across the globe.
With the enactment of Bill 55, these companies will be immune to the external regulatory measures or sanctions that may be imposed by betting and gaming regulators from other jurisdictions. Their activities will be shielded by the bill and will guarantee the safety of their licenses even if they commit a regulatory offense in another market.
While the bill will strengthen Malta’s appeal as a hub for iGaming operations, there are concerns about its potential negative impacts on the European gambling market, as it could create obstacles to international collaboration and information sharing, potentially hindering efforts to combat issues like money laundering, fraud, and problem gambling on a global scale.
Seen as a direct response to legal actions taken by Austrian and German authorities against online gaming companies operating under Maltese licenses, Malta’s bill has garnered attention among gambling stakeholders. These businesses faced accusations of unlawfully providing online gambling services to citizens in these countries.
One notable incident involved Austrian courts submitting liability orders to Maltese courts regarding penalties imposed on 888 Holdings, alleging a violation of Austria’s monopoly rights held by Casinos Austria. In defense, Malta argues that companies licensed within its jurisdiction can freely offer services throughout the EU, citing the principle of free movement of goods and services.
The country contends that this principle encompasses the cross-border provision of betting and gaming products, which becomes complicated by varying regulations among EU member states. European regulators have expressed concerns to the EU Commission, arguing that Bill 55 undermines the EU’s Brussels I Recast Regulation and the fundamental principles of the European Rule of Law.