European Commission Requests More Information on Malta’s Gaming Legislation

The European Commission has announced its plans to scrutinize Malta’s controversial Bill 55, which aims to provide legal protection to Malta-based iGaming companies from litigation in other European Union (EU) Member States. 

European Commission Seeks Clarity on EU Law Compliance

European Commissioner for Justice, Didier Reynders, confirmed that the Commission is evaluating the draft legislation and will assess its compliance with EU regulations, reported The Shift News. In response to a written inquiry from German MEP Sabine Verheyen, Reynders emphasized the need for more information from the Maltese authorities before deciding on any follow-up actions.

The MEP posed several questions to the Commission, including whether the proposed bill aligns with European law and what measures the Commission intends to take if it finds any violations. Reynders clarified that the Commission has no information regarding potential links between individual members of the Maltese government and the local gambling industry.

Bill 55, also known as The Gaming Amendment Act, secured approval from the Maltese Parliament in June. It aims to codify the country’s longstanding policy of supporting gaming operators within its borders. One of the key provisions in the bill prevents legal actions against Maltese licensee companies and their officials in relation to the provision of online gaming services licensed by the Malta Gaming Authority (MGA). Additionally, the bill proposes that Maltese courts should not recognize or enforce sentences or decisions from foreign courts on this matter.

Bill 55 Stirs Up Legal Controversy for Malta-licensed Gaming Companies

However, the bill has sparked controversy, especially among Austrian and German lawyers representing clients involved in legal disputes with Malta-licensed online gaming companies. These lawyers contend that the legislation undermines the rule of law in Europe by infringing upon the fundamental rights of EU citizens and residents.

The issue of offshore online casinos offering their services in regions where they lack proper licensing has long been a grey area in the online gambling industry. The enactment of Bill 55 would potentially shield operators in the European grey market from lawsuits arising from their gaming activities, adding complexity to the already disputed matter of European freedom of services.

Malta, which has been a significant hub for iGaming companies, witnessed a decline in the issuance of new gaming licenses in recent years. The decrease in registrations has been ascribed to Malta’s 2021 greylisting by the Financial Action Task Force (FATF), which caused a decline in confidence among potential applicants. However, it is worth noting that Malta was delisted from the FATF grey list in the following year. To attract more gaming operators to the island, Economy Minister Silvio Schembri is pushing for the passage of the new law, aiming to make it more challenging for foreign jurisdictions to prosecute Maltese gaming companies.