Malta’s Gambling Industry To Be Subject to New Foreign Liability Law

The Maltese Parliament approved Bill 55, which gives the Maltese courts the power to refuse recognition and enforcement of foreign persecution related to online gambling. 

Bill 55: Gaming Amendment Bill, introduced on April 24, 2023, received support and sponsorship from the Minister of Economy and European Funds, Silvio Schembri. The President of Malta, George Vella, approved this bill, as a result of which its provisions were included in the current Law on Gambling, which regulates the gambling market in the country.

The law prevents enforcement of licensed operators by the Malta Gaming Authority (MGA) in two cases. Firstly, if such actions conflict with or undermine the provision of gaming services in Malta, they cannot be carried out. In addition, enforcement action cannot be taken if the operator’s actions are related to lawful activities permitted under the Gambling Law.

This means that the Maltese courts will refuse to recognize and apply enforcement action by foreign betting and gambling regulators in Malta. This is significant as Malta hosts a significant number of both B2C and B2B betting and gambling companies active in various European and other markets.

Bill 55 was controversial among legal experts and was seen by many as a direct reaction to lawsuits brought by the Austrian and German authorities against online gaming companies licensed in Malta. These companies are accused of illegally providing online gambling services in the respective countries.

Previously, the Austrian courts have turned to the Maltese courts regarding decisions related to sanctions against 888 Holdings, which violated the monopoly rights of Casinos Austria. Freedom to provide services is one of the key principles of the European Union. The MGA claims this includes the cross-border provision of betting and gaming services. However, this is complicated by different rules in different EU member states, which creates some uncertainty.

European regulators have approached the European Commission to challenge the fact that Draft Law 55 undermines the Brussels I Regulation on revision within the EU and the rule of law in Europe. The European Commission intervened because the approval of Bill 55 could create a legal loophole that would allow unlicensed operators to continue to provide their services in violation of national law.
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