The Malta Gaming Authority (MGA) has argued that the Maltese gaming framework is in full conformity with EU law after the German gambling regulator criticised a recent legal amendment.

Earlier this week, the GGL said the provisions within the law might not align with European requirements for acknowledging and enforcing foreign judgments.

However, the German regulator stressed that the ultimate decision on this matter is not within its jurisdiction.

The MGA said it wanted to provide “clarity, accuracy and transparency” with regard to the recent amendments to the Gaming Act, commonly referred to as Bill 55.

In June, the Maltese parliament passed the Bill, which then became Article 56A of the Gaming Act. It serves as a safeguard for MGA-licensed operators against player claims for damages originating from overseas.

The law states that no measures can be taken against the provision of gambling services if that action is lawful in Malta and the providers hold a Maltese licence.

Furthermore, Maltese courts are required to reject the recognition and enforcement of any foreign judgment related to an action described in this particular provision.

MGA’s intention

In its response to criticisms, the MGA repeated earlier comments that the intention behind the introduction of Article 56A is “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.

“It is simply an interpretation of the order on public grounds for refusal envisaged in said EU regulation,” the MGA said.

The regulator 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,” the MGA concluded.

German gambling regulator GGL has publicly commented on a recent amendment to Malta’s gaming legislation.

In June, the Maltese parliament passed Bill 55, now known as Article 56A of the Gaming Act, which serves as a safeguard for gambling operators licensed by the Malta Gaming Authority (MGA) against claims for damages originating from overseas.

This legal revision has garnered attention due to its potential conflict with European regulations and was crafted in response to a surge in legal actions from foreign jurisdictions.

Specifically, civil courts in Germany and Austria ruled in favour of compensating players for past losses allegedly incurred through illicit online gambling activities carried out by MGA-licensed operators.

The GGL today (23 August) said it has been inundated with enquiries regarding the assessment of Malta’s Bill No. 55, prompting the regulator to issue an official public statement.

The GGL asserts that the provisions within the law might not align with European requirements for acknowledging and enforcing foreign judgments.

EC to take action

However, the GGL clarified that the ultimate decision on this matter is not within its jurisdiction.

The regulator has conveyed its evaluation to the German federal states and is maintaining an ongoing dialogue with the relevant authorities.

The GGL stated: “We currently do not see any reason to take action beyond this, as the Federal Ministry of Justice has already approached the European Commission on this matter. We therefore assume that proceedings will be initiated accordingly.”

While the protective measures laid out in Malta’s legislation pertain solely to civil claims by players, the GGL emphasised that it holds no responsibility for their enforcement.

The extent to which a gambling provider’s reliance on the amendment in civil law cases can also lead to gambling-related reliability needs to be assessed on a case-by-case basis, according to the GGL.

First blocked enforcement

Meanwhile, in late July, a Maltese court declined to enforce the first foreign ruling.

In the case involving an Austrian player versus TSG Interactive Gaming Europe Ltd (PokerStars), the Maltese court blocked the execution of a garnishee order obtained in an Austrian court.

An article published on Verfassungsblog, an academic platform focusing on constitutional law in Germany and Europe, described the judgment as a “never-before-seen blow to the primacy of EU law.

Discussions about the Macolin Convention

In a parallel development, The Shift News has recently revealed that Malta is actively seeking legal advice regarding the potential ramifications of finally embracing an agreement that it had deliberately avoided since 2014.

This particular agreement pertains to the adoption of a revised definition of illegal sports betting.

Should this agreement, known as the Macolin Convention, be officially ratified, it would classify sports betting websites operating from Malta as being in contravention of the new definition, particularly if they cater to jurisdictions where such betting remains prohibited.

According to the article, in 2021, international advisers had suggested endorsing the convention as a goodwill gesture to prevent Malta from being included in the FATF gray list.