Brussels wants more information on Malta’s new Gambling Act before acting

The European Commission is asking the Maltese government for more information on its proposed changes to the Gambling Act aimed at shielding Malta-based iGaming companies from litigation in other Member States.

Answering a European Parliamentary Question from German EPP MEP Sabine Verheyen, the Commission said it was aware of Malta’s draft legislation and that it “is in the process of assessing the compatibility of the draft Bill with EU law and requested the Maltese authorities to provide further information”.

Once it receives and analyses its feedback from the government, the Commission will then “decide on the appropriate follow-up steps” to be taken.

The Commission was also asked if it intends to oppose the new Maltese legislation, which would leave relevant judgments from other Member States unrecognised or unenforced in Malta, but it did not answer.

Curiously, the MEP asked, “Does the Commission know whether the Maltese Government or individual members of that Government have maintained links with the Maltese gambling industry in the past or whether they do so at present and, if so, does it know the nature of these links, and have there been any instances of corruption in the past?”

The Commission answered that it, “…does not have any information about possible links of individual members of the Maltese Government with the Maltese gambling industry.”

The Malta Gaming Authority issued 75% fewer new gaming licenses in 2022 when compared to its peak year of 2018, figures show.

A recent analysis carried out by The Shift showed how in 2021, the year in which Malta was grey-listed by the international Financial Action Task Force, new license registrations halved when compared to the previous year.

Economy Minister Silvio Schembri is now aiming to introduce a new law to make prosecuting Maltese gaming companies from abroad more difficult, rendering Malta a more attractive destination for their bases in the process.

Last month, it was reported how Austrian and German lawyers, representing clients against Malta-licensed online gaming companies that allegedly illegally offered their services in Austria and Germany, sent a letter to the European Commission condemning amendments to Malta’s Gambling Act.

Bill No. 55, known as The Gaming Amendment Act, which passed its third reading in Parliament on Monday 12 June, will introduce a number of changes to the current Gaming Act meant to “codify in law the longstanding public policy of Malta encouraging the establishment of gaming operators in Malta.”

The bill states that no legal action may be brought against a Maltese licensee company, or officials working for a licensee company in relation to the provision of online gaming services as licensed by the MGA. The bill also stipulates that the Maltese courts should refuse recognition or enforcement of any sentence or decision taken by a foreign court in this regard.

In their letter, addressed to Justice Commissioner Didier Reynders and Economy Commissioner Paolo Gentiloni, lawyers Karim Weber and Benedikt Quarch argued that Malta’s proposed new bill would “undermine European Rule of Law by blocking the fundamental rights of EU Citizens and Residents”.

They argued that online casinos licensed in Malta violated German and Austrian gambling laws by offering their services online to players in regions where they were not licensed to operate. The issue of offshore online casinos being available to play in countries where they are not strictly licensed has been a legal grey area within the online gambling industry since its inception.