Maltese Bill protecting MGA licence holders from foreign liability written into law

Malta has approved amendments to its Gaming Act through Bill 55, enshrining the country’s existing public policy that protects the status of the Maltese gaming licence from “unfounded challenges” into law, Malta’s Government announced in a statement.

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

The final stages for Bill 55 were cleared in Malta’s Parliament this week, 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 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 (ordre public) of Malta.”