Malta wants to pass a law shielding its online gaming operators from prosecution in EU

Malta’s Parliament has introduced a bill that would allow the EU member nation’s courts to ignore enforcement of any foreign judgment. Such a far-reaching measure, seen by many as illegal in the European Union, includes decisions by courts outside of Malta concerning gaming law. In fact, the proposed change in Maltese law is included in the country’s Gaming Act (Amendment 55).

The decision to shake up EU courts is most likely a direct response to Germany and Austria’s recent legal actions against online gambling operators licensed and based in Malta but offering services in other EU countries – specifically Austria and Germany.

EU Law, a Complicated Framework of Balance

While the authorities in those and other countries assert and may have found or participated in creating case law that supports their position, nothing is ever quite as simple as it seems in such a sprawling union of member states, each accepting compromise and asserting their own interests.

Many countries have been able to win court cases allowing them to establish gaming monopolies within their own borders ut EU courts have often struggled to balance the right of the member state to protect its citizens (and that is often the only reason such exclusionary laws are allowed), and the rights of other member states to provide services across the whole of the Union in the spirit of free trade and against monopolization.

According to a report on G3 Newswire, the bill was first read into the record on April 24th, 2023. Austrian and German lawyers representing their respective countries say that Malta’s Bill 55 – “blatantly undermines European Rule of Law by blocking the fundamental rights of EU citizens and Residents”.

One of the three conflicting legal principles that may be up for further definition, subordination, or adjustment is states’ practicing a right to develop country-specific gaming legislation to protect nationals from harm – specifically criminality as defined by the state’s own laws.

While stated without reference by code, some observers have stated that regardless of the “offending entities” being licensed in a member state and providing the ordained free movement of goods and services, the right to protect citizens from harm trumps a fellow state’s right to free trade.

For context, europa.eu explains the principle like this: “One of the keystones of the European Union (EU) internal market is the principle of the free movement of goods – the creation and development of an area without internal borders, where there are no unjustified restrictions to trade between EU Member States.”

National Gaming Monopolies Exist with Free Trade

However, according to the law in Austria, only one entity is allowed to offer online gaming in the country with all other providers being illegal by internal definition. Austria’s gaming laws are fragmented, however, ultimately only the federal monopoly holder, Casinos Austria’s subsidiary “win2day” is recognized by the government as a legal provider.

Germany on the other hand game out of the gate shooting upon the launch of their nascent regulatory authority stating it would prosecute any and all “outside” providers not recognized and licensed in Germany.

Austrian lawyers have filed thousands of cases against outside operators over the years and have been awarded claims of more than €350m throughout the course of several decades. Cases from long ago are still being processed against operators, often as class actions. The Maltese bill would stop the collections of those and other claims were it to pass in Malta and be upheld in courts of the EU writ large.

Malta has spent decades advancing electronic offshore gambling as a critical part of its economy, giving weight to the continuance this long into the tenure of the European Union – however – the chances of Bill 55 amendment to stand so all-encompassing is doubtful. If written to only protect gaming operators its chances would be nil.

German and Austrian lawyers are asking the European Commission to stop the law from being fast-tracked and rely heavily in their arguments on European Union’s (EU) Brussels I Recast Regulation, which deals directly with the recognition and enforcement of foreign judgments inside the EU.

Source: New Bill to protect island’s igaming operators from EU claims, G3 Newswire, May 19, 2023