Malta to Protect Its iGaming Industry from Foreign Claim with Bill 55
Bill 55 has passed its last hurdle in Malta and has now been signed into law by Maltese President George Vella.
The Bill, which empowers Maltese courts to reject the acknowledgment and implementation of overseas judgments pertaining to online gambling in Malta, has now been incorporated into the country's existing Gambling Act, which regulates and supervises the market.
Sponsored by Honorable Silvio Schembri, MP Minister for the Economy and European Funds, Bill 55, 'Gaming Amendment Bill' protects Malta Gambling Authority (MGA) licensed operators from foreign enforcement actions under two circumstances.
First, if the actions contradict or undermine the provision of gaming services in Malta, and if the operator's activity that led to the enforcement decision is lawful under the Gambling Act. In these two scenarios, the Malta court will refuse to recognize or carry out any enforcement actions in the jurisdiction requested by foreign betting and gaming regulators.
Related: Interview with Carl Brincat, CEO of MGA.
Implications of the Bill
Malta hosts a wide array of B2B and B2C iGaming firms. Many iGaming businesses choose to get licensed in Malta because of the country's tax benefits and EU market access. Due to the latter, several Malta-domiciled brands also operate in diverse European betting markets, as well as other regions across the globe.
With the enactment of the Bill, these companies will be immune to the external regulatory measures or sanctions that may be imposed by betting and gaming regulators from other jurisdictions. Their activities will be shielded by the Bill and will guarantee the safety of their licenses even if they commit a regulatory offense in another market.
While the Bill will strengthen Malta's appeal as a hub for iGaming operations, there are concerns about its potential negative impacts on the European gambling market. It could create obstacles to international collaboration and information sharing, potentially hindering efforts to combat issues like money laundering, fraud, and problem gambling on a global scale.
Basis for Bill 55
Many gambling enthusiasts regard the Bill as Malta's direct response to legal actions taken by authorities in Austria and Germany against online gaming companies licensed in Malta. The businesses were accused of unlawfully providing online gambling services to citizens of these countries.
An example was when Austrian courts submitted liability orders to Maltese courts regarding the penalties imposed on 888 Holdings for allegedly offering gambling services in Austria, thereby infringing on Casinos Austria's monopoly rights.
Malta has argued that firms licensed in its jurisdiction can offer their services through the EU
based on the principle of free movement of goods and services – regardless of the domestic gambling laws of EU member states.
The country asserts that the principle encompasses the cross-border offering of betting and gaming products which is being complicated by the different regulations across EU member states.
European regulators have contacted the EU Commission expressing their concerns that Bill 55 undermines the EU's Brussels I Recast Regulation and the principles of the European Rule of Law.