Malta Passes Bill to Refuse Recognition of Foreign Judgements in Online Gambling Sector

The Parliament of Malta has approved Bill 55, also known as the 'Gaming Amendment Bill,' which grants Maltese courts the authority to reject the recognition and enforcement of foreign judgements related to the online gambling sector. The bill was sponsored by Hon. Silvio Schembri MP, Minister for the Economy and European Funds.

Maltese President George Vella has given his approval to the bill, and its provisions have been incorporated into Malta's existing Gambling Act, which regulates the country's gambling market. Under the Act, enforcement actions against operators licensed by the Malta Gambling Authority (MGA) are prohibited in two scenarios. First, if an action conflicts with or undermines gaming services in Malta, it cannot be pursued. Second, enforcement measures cannot be taken if the operator's actions align with authorized activities allowed by the Gambling Act.

As a result, Maltese courts will refuse recognition and enforcement of actions taken by foreign betting and gaming regulators within Malta. This decision has significant implications since Malta hosts a wide range of B2C and B2B companies that operate in European betting and gaming markets, as well as in other regions.

Legal observers have deemed Bill 55 controversial, with many viewing it as a direct response to legal actions taken by Austrian and German authorities against online gaming companies licensed in Malta. These authorities accuse the companies of illegally offering online gambling services to their citizens.

In response, Malta asserts that its MGA license permits domestic businesses to offer services across the EU based on the principle of free movement of goods and services, regardless of individual member states' gambling laws. Austrian courts had previously issued liability orders to Maltese courts regarding penalties imposed on 888 Holdings for infringing on Casinos Austria's monopoly rights.

The MGA argues that freedom to provide services is a fundamental principle of the EU, encompassing cross-border provision of betting and gaming products. However, the varying regulations among EU member states complicate this matter.

European regulators have written to the EU Commission, expressing concerns that Bill 55 undermines the EU's Brussels I Recast Regulation and the European Rule of Law. The EC has intervened as the approval of the bill could create a legal loophole, allowing unlicensed operators to continue offering services in violation of national laws.

By fLEXI tEAM