Malta’s status as a regional hub for online casino and iGaming operators is seldom disputed. A bold approach to regulation some 20-odd years ago and a robust legislative framework has led to a situation where around 10 per cent of all online gaming operators use the island as its base of operations.

Continuing the trend of taking an innovative approach towards regulation and reacting to global betting regulatory changes which have threatened the competitiveness of the Malta Gaming Authority licence, Maltese lawmakers have now approved Gaming Amendment Bill (Bill 55) which is designed to provide unprecedented legal protection to locally licensed iGaming operators.

The legal amendment essentially protects Malta Gaming Authority (MGA) licence holders from enforcement action that stem from foreign judgements and foreign regulatory authorities in specific circumstances. It allows the Maltese courts to refuse recognition and enforcement of such enforcement notices related to the online gaming sector.

The final stages for Bill 55 were cleared in Malta’s Parliament in June, and the Bill was first tabled for discussion on 24th April.

The amendments prevent enforcement action from foreign judgements in the case when such action runs contrary to or undermines the provision of gaming services in Malta, and when activities by an operator subject to a foreign challenge relates to authorised activity lawful under the local Gaming Act.

The amendment is significant as Malta became a hub for remote gaming via the early adoption of a legislative framework that sees the local licence act as a point of supply. This enables licensees to operate cross-border from Malta, provided that a justifiable legal reason to provide their services to customers in such a jurisdiction exists, and always in compliance with the legal framework established by local licence conditions.

With Bill 55 now enshrined into law, the Maltese courts have grounds to refuse recognition of liability or enforcement actions from foreign gambling and betting gaming regulators. The Bill is deemed controversial by legal commentators who argue that it circumvents the EU’s rule of law.

As EU countries have moved to create their own licensing framework for betting and gambling operators, MGA licensed firms continue to serve clients in those countries under the Malta licence. In recent months, there has been legal action by Austrian and German gambling authorities against Malta-licensed online gaming companies which they say are offering online gaming services to their citizens illegally.

Malta has firmly stood its ground on this, arguing that the MGA licence allows businesses registered on the island to offer its services throughout the EU thanks to the fundamental principle of free movement of goods and services – irrespective of EU member states specific laws on gambling.

Austria, for example, does not agree, with the Austrian courts having submitted enforcement action to the Maltese courts in relation to penalties it argued 888 Holdings are liable to pay for infringing Casino Austria’s monopoly rights.

In a statement explaining the move, the Economy Ministry had said said:

Bill 55 “ensures that consumers choose to engage and play within a regulated market, which is subject to strict legal obligations aimed at protecting players and is overseen by a competent regulator that is empowered to take swift enforcement action in cases of non-compliance on the part of the licensee.

“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. 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 activity that is lawful in terms of the Gaming Act and the other regulatory instruments applicable to the Malta Gaming Authority’s licensees.

“Similarly, foreign judgments that fulfil the aforementioned criteria shall not be recognised and enforced in Malta, since the amendments are intended to clarify that such judgments are manifestly against the public policy of Malta.”

So, what does this all mean in practice?

Under this latest legal amendment, Maltese courts are now legally empowered to reject the recognition and enforcement of action levelled against a locally licensed operator by a foreign regulator or foreign court in relation to the online betting sector.

This means that foreign regulators, in some instances, no longer have the weight of the Maltese courts to locally enforce proceedings against MGA regulated operators.

What of the legal protection awarded to MGA licensed operators under the new Bill?

Online gaming operators’ interests are protected when enforcement actions directly threaten the provision of gaming services in Malta. It provides operators with much sought-after peace of mind in that as long as their activities comply with Malta’s Gambling Act, they are shielded from legal repercussions. While peace of mind may sound like an abstract concept, operators can function, plan, and ultimately grow with a greater sense of security.

Why exactly has Malta been criticised for this latest legal move?

While the country’s lawmakers argue that Bill 55 is supported by EU member states’ legal right to free movement of goods and services across the 27-member bloc, on the other side of the debate, pundits argue that it actually circumvents the EU’s rule of law. Critics say that Malta is removing an EU jurisdiction’s ability to provide legal remedy to specific situations happening in their country, while Malta contends that while such operators can provide their goods and services in Malta, they should be able to do so across the EU, in accordance with free movement principles.

Critics argue that Bill 55 allows for unlicensed operators to provide their services in violation of national laws.

Use of Bill 55 will undoubtedly lead to legal challenges before European courts.

Continue Reading

The secrets to creating exceptional events

9 December 2024
by iGamingCapital.mt

Corinthia Caterers Director of Sales Adrian Bonnici says it’s about 'making your guests feel truly engaged and part of something special’

Quality and consistency at Blok Foods: A world-class recipe for success

13 November 2024
by Edward Bonello

Blok Foods GM Josef Buttigieg explains how his passion for great food and excellent service lies at the heart of all he does

Leading by example: How Game Lounge’s women in leadership foster an inclusive workplace

7 November 2024
by iGamingCapital.mt

Seven team members share how this global leader in affiliate marketing doesn’t just talk about diversity – it lives it

Driving equitable financial inclusion with payments and banking service provider FinXP

4 November 2024
by Rebecca Anastasi

Ten years ago, FinXP was launched with the goal of furnishing payments and financial solutions to industries which had been struggling to access such services

See more