SBC News Malta approves Bill 55 against foreign liability of igaming sector

Malta approves Bill 55 against foreign liability of igaming sector

The Parliament of Malta has approved the passage of Bill.55, that will allow Maltese courts to refuse the recognition and enforcement of foreign judgements related to the online gambling sector.

Tabled on 24 April 2023, Bill 55 ‘Gaming Amendment Bill’ has been sponsored by Hon. Silvio Schembri MP Minister for the Economy and European Funds.

The Bill has now been approved by Maltese President George Vella and as such its provisions have been written into the country’s existing Gambling Act, which legislates and regulates the market.

Specifically, the Act prevents enforcement actions against Malta Gambling Authority (MGA) licensed operators under two sets of circumstances. Firstly, if an action conflicts with or undermines the provision of gaming services in Malta it cannot be undertaken.

Additionally, enforcement measures cannot be taken if the action made by the operator relates to an authorised activity lawful under the Gambling Act. 

This effectively means that Maltese courts will refuse recognition and enforcement actions in Malta by foreign betting and gaming regulators.

The significance of this lies in the fact that Malta is home to a huge range of both B2C and B2B firms which are active in various European betting and gaming markets, as well as others further afield.

Bill 55 has been deemed controversial by legal observers, with many seeing it as a direct response to legal actions taken by authorities in Austria and Germany against Malta-licensed online gaming companies – which are accused of illegally offering their online gambling services to citizens. 

Standing its ground, Malta cites that its MGA licence allows for domiciled business to offer services throughout the EU due to the principle of free movement of goods and services – irrespective of EU member states specific laws on gambling.

Austrian courts had previously submitted liability orders to Maltese courts in relation to penalties related to 888 Holdings infringing on Casinos Austria’s monopoly rights.

Freedom to provide services is one of the central principles of the EU. The MGA argues that this includes cross-border provision of betting and gaming products, but the patchwork of regulations across different EU member states complicates this.

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

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