‘Maltese gaming framework in full conformity with EU law,’ says MGA after German regulator slams Bill 55

The Malta Gaming Authority has issued a public statement defending recent local amendments to the Gaming Act, more commonly referred to as Bill 55, arguing that it is in fact in “full conformity” with EU law.

Bill 55 prevents 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.

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 because such operators have not gained an Austrian or German gambling licence.

Malta, on the other hand, argues that so long as the activities are in line with the Maltese gambling licence, and in line with the EU’s principles of free movement of services, it is perfectly legal for a Maltese licence holder to provide a service that is in full compliance with its EU member state licence.

Signed into law last June, the Bill sparked much debate about its validity. On Tuesday, the German gambling regulator, Gemeinsamen Glücksspielbehörde der Länder (GGL), weighed in, saying it “should not be compatible” with European law.

It argued that the amendment goes against the Recast Brussels Regulation, a 2013 EU law which regulates the jurisdiction, recognition and enforcements of legal judgements between EU member states.

Despite making the strongly worded statement, the GGL stressed that it has no responsibility to decide whether the law is compatible with the EU legal framework.

In reaction, the MGA issued a statement to say that Bill 55 sought to “enshrine into law the long-standing public policy of Malta in relation to the gaming sector”.

The MGA stressed that the law does not create “additional or separate grounds” for refusing to recognise or enforce judgements to those already established under EU regulations (Regulation (EU) 1215/2012).

“It is simply an interpretation of the ordre public grounds for refusal envisaged in said EU regulation.”

The MGA further argued that the scope of the legal amendment is “highly restricted” and does “not preclude any action whatsoever from being taken against a licensee”.

“Therefore, not every judgment relating to the operations of gaming operators with a Maltese licence would be in violation of Maltese public policy.

“Article 56A sets out cumulative elements that must first be fulfilled before it can be triggered.

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

“The Maltese gaming framework, in turn, is in full conformity with EU law and is based on the freedoms afforded to an entity established within the internal market.”