Germany and Malta At Odds over Gambling Judgement Enforcement Bill

Earlier this year, the Maltese House of Representatives submitted Bill 55 for review. After several sittings, the amendment to the Gaming Act was written into power by the President of Malta, George Vella.

The objective of the bill is described as follows on the Malta Parliament website:

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“The object and reason of this Bill is to codify in law the longstanding public policy of Malta encouraging the establishment of gaming operators in Malta who offer the local and cross-border supply of their services in a manner compliant with local legislation, in an effort to encourage private enterprise in line with article 18 of the Constitution of Malta.”

Looking at this description, it makes sense that the Malta Gaming Authority (MGA) supported Bill 55. The amendment to the act aims to encourage operators to apply for licenses and then work closely within its parameters to grow their igaming businesses.

 Germany Voices Its Concerns

While many understand the high-level intent of the bill, it has drawn some concerns from various members of the EU for its wording and the behind-the-scenes goings-on that triggered its creation.

The language that raised regulatory eyebrows is that Malta reserves the right to “refuse the recognition and enforcement of foreign judgements related to the online gambling sector”. It has been postulated that the amendment was written into law based on increasing judgements brought against MGA license holders by courts in foreign countries.

The GGL commented on Bill 55, saying:

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“The law may be in response to the sharp rise in the number of successful gambling loss repayment claims against Maltese gambling companies by players claiming illegal losses as the gambling offered was not legal in their home country.”

The German gambling regulatory authority called the wording of Bill 55 a “protective shield" that allows MGA gambling sites to operate illegally in regions that have chosen not to allow online gambling or to offer games of chance where the area may only allow skill gaming.

The GGL expanded on their concerns with this protection, saying:

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“We are of the opinion that this law should not be compatible with European requirements for the recognition of decisions (Regulation (EU) 1215/2012).”

The GGL did note that it would not be directly involved in fighting the amendment as it had made its concerns known to all federal states, been in contact with the relevant authorities and added that the Federal Ministry of Justice had voiced its concerns to the European Commission.

 Malta Defends Its Position

Despite the concerns being raised by Germany and other EU members, Malta is standing by the bill as it “does not create additional or separate grounds for refusing to recognise or enforce judgments to those already established under EU regulations (Regulation (EU) 1215/2012)”.

The MGA posted a clarification on August 24th, which states the following:

1. The amendment is limited to specific civil claims, not any other form of legal action being brought against an operator.
2. To trigger Bill 55, the intended legal action must directly conflict with or undermine the legality of the Malta gambling license framework.
3. According to the Malta Gambling Act, the operator's action under scrutiny is legal.

They further stress that these three pillars are sufficient to support Bill 55 because the Malta Gambling Act is “in full conformity with EU law and is based on the freedoms afforded to an entity established within the internal market”. As such, the fully compliant gambling act is the foundation of the items mentioned above and ratifies them by its compliance with EU law.