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German GGL Says Malta’s Bill 55 is Incompatible with EU Law
By Jeff Osienya Aug 28, 2023 IndustryGermany’s gambling watchdog has called out Malta’s recently okayed Bill 55, citing that it goes against gambling regulations across the EU. Are Germany’s concerns about the new law valid? Join us as we cover the ins and outs of the standoff.German gambling regulator Gemeinsamen Glücksspielbehörde der Länder (GGL) has come out strongly to denounce Malta’s Gaming Amendment Bill 55, also referred to as Article 56A. This regulation protects MGA-licensed operators from any foreign judgments not considered illegal in Malta.
GGL has dubbed the Bill ’a protective shield’ that goes against EU gambling laws. Additionally, the Bill is also said to conflict with the Brussels Recast Regulation, which governs judgments on cases that involve an international element. The Bill was signed into law by Malta President George Vella back in June and has since attracted much controversy from gaming regulators across Europe, including Germany and Austria.
As the GGL sees it, the main point of contention is that the Bill is centered around protecting the interests of Maltese-licensed firms at the expense of players. That’s because, per the regulation, only Maltese courts can enforce any judgments on cases brought against the firms.
Why the Heavy Backlash?
Opposition against Bill 55 began as soon as news broke out that it was on its way to approval by the government. The backlash came after a series of court battles that saw several operators with MGA licensing liable for lack of player protection and enabling illegal gambling in jurisdictions where gaming was outlawed.
One case highlighting the risks of illegal gambling is that of PokerStars in 2021. The operator was found to be offering gambling services to Austrian citizens and ordered to pay a player €28,000 over five years. This was the beginning of a slew of lawsuits against gaming operators. Some operators have since paid players, while some have appealed the judgments and attempted to seek justice in higher courts or via Maltese courts.
Another case is that of a pharmacist against 888 Casino, which continues to defend its actions by citing Maltese gaming regulations. After the operator was ordered to pay the pharmacist up to €500,000 for losses incurred by the player, an 888 spokesperson said:
Quote“The Malta Gaming Authority concurs with this view and therefore takes the position that gaming service providers licensed by it can offer their services in Austria entirely legally on the basis of their freedom to provide services within the internal market, insofar as they remain compliant with the Maltese regulatory and legal framework.”
As it stands, EU member states have been enforcing gambling regulations at an individual level. Each nation has its unique laws to guide gambling in their respective contexts, and MGA has been a significant beneficiary of this decentralized legislative situation.
With this in mind, GGL has greatly protested embracing the Bill, arguing that the law is incompatible with EU gambling laws. The GGL has as a result, insisted that the law should not be viewed as abiding by European requirements for the recognition of decisions.
The matter has since been brought to several European bodies mandated with the safety of the EU citizens, including the European Commission, to express doubts about the real motive of the Maltese Bill. GGL has also announced that through the Federal Ministry of Justice, it will leave matters in the hands of those responsible for deciding what happens next.
MGA’s Response to the Fervent Opposition
In a meticulously phrased statement released on August 24, the Malta Gaming Authority asserted that Bill 55 fully conforms to EU gambling laws. MGA published the statement, noting that it was the authority’s chance to clarify the recent changes to the Gaming Act. Malta’s gaming ombudsman added that the primary aim of introducing the legislation was to preserve Malta’s already established public policy as far as the gaming sector is concerned.
The statement went on to add that the provisions of the Bill are not meant to set a new precedence for “refusing to recognize or enforce judgments to those already established under EU regulations (Regulation (EU) 1215/2012)”. Instead, they would only be applicable in cases where actions taken by players against operators or vice versa contradict the Maltese gambling legal framework.
Another condition for invoking the section of the Act where Article 56A has been added will be if the activities contradict what is considered legal concerning Malta Gaming Authority’s license terms. In MGA’s view, the Bill allows domiciled businesses to continue operations in the EU as per the principle of free movement of goods and services, going beyond the specific gambling laws in the respective jurisdictions. The statement noted:
Quote“Moreover, the scope of the amendments enacted into law is highly restricted, and the law 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 license would be in violation of Maltese public policy. However, the final assessment of this question is not the responsibility of the GGL. We have informed the federal states of our assessment and are otherwise in contact with the relevant authorities.”
What Next?
The EU is known for putting citizen safety above all else, which is why this Bill gained quite some attention even before it was enacted. As the Commission and Parliament await clarification on aspects of the contentious Bill, the clash between Malta’s efforts to remain a respectable cross-border gambling authority and still protect its B2B and B2C partners raves on.
Potential ramifications for the outcome of the exchanges between the relevant stakeholders and onlookers are sure to transcend the two jurisdictions, especially given that concerns have come from beyond Germany. The ongoing dialogue between EU member states, regulatory bodies, and Malta itself will undoubtedly shape the future of gaming legislation in Europe.
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