European Commission to Probe Malta’s Bill 55

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The European Commission has unveiled its intentions to investigate Malta’s contentious Bill 55. This legislation aims to shield iGaming companies based in Malta from legal proceedings in other European Union (EU) nations.

European Commission Calls for Clarity on EU Law Compliance

Didier Reynders, the European Commissioner for Justice, confirmed that the Commission is reviewing the proposed legislation to assess its adherence to EU laws. Responding to a written query from German MEP Sabine Verheyen, Reynders stressed the need for additional information from Maltese officials before deciding on subsequent steps.

Verheyen’s inquiry to the Commission involved multiple questions, such as the compatibility of the proposed legislation with European law and the Commission’s course of action if it encounters any infringements. Reynders made it clear that the Commission possesses no data about potential connections between the Maltese government’s individual members and the domestic gambling sector.

Bill 55, also referred to as The Gaming Amendment Act, passed in Belgium in June and has been designed to institutionalize the nation’s longstanding policy of backing gaming operators on its territory. The legislation includes a critical clause that impedes legal actions against Maltese licensee companies and their authorities in connection with the provision of online gaming services approved by the Malta Gaming Authority (MGA). It also suggests that Maltese courts should dismiss or not enforce rulings or decisions from foreign courts concerning this subject.

Bill 55 Could Cause Legal Problems for MGA License Holders

Nevertheless, the legislation has ignited a dispute, primarily among Austrian and German lawyers representing clients engaged in legal altercations with Malta-licensed online gaming companies. These lawyers argue that the law violates Europe’s rule of law by encroaching upon the fundamental rights of EU citizens and residents.

The matter of offshore live casinos offering their services in areas where they lack proper licensing has been a longstanding grey area in the online gambling sector. The introduction of Bill 55 might potentially safeguard operators in the European grey market from lawsuits stemming from their gaming operations, thereby complicating the already contentious issue of European freedom of services.

Malta, known as a significant hub for iGaming companies, has experienced a drop in the issuance of new gaming licenses in recent years. The reduction in registrations has been attributed to Malta’s greylisting by the Financial Action Task Force (FATF) in 2021, which led to a decrease in confidence among potential applicants.

However, it’s noteworthy that Malta was removed from the FATF grey list the subsequent year. Economy Minister Silvio Schembri is advocating for the enactment of the new law to attract more gaming operators to the island, aiming to make it tougher for foreign jurisdictions to prosecute Maltese gaming companies.

Related: Interview with Carl Brincat, CEO of MGA.

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