On April 24, 2023, the Maltese gaming framework was set for a significant shift when Bill 55 was tabled in parliament. The bill, tagged ‘Gaming Amendment Bill,’ amends the country’s Gambling Act, which regulates its iGaming sector. On the one hand, it is a plus for casino operators and on the other, it is a bone of contention for EU law.
Malta-licensed operators stretch beyond the country, offering gaming services to other regions. That exposes them to lawsuits and court orders from countries in the EU. Hence, Bill 55 aims to provide legal protection to these gaming services and the country’s gaming sector.
The Malta Gaming Authority (the MGA) is the entity established to licence casino operators. It can be drawn into legal battles between a plaintiff and an online casino operating with its licence. With that in mind, let’s look closely at what the new gaming bill brings and the threat it poses outside Malta.
What is Bill 55?
The Gaming Act has long held Malta’s gaming sector. However, Bill 55, passed by parliament and signed by President George Vella, introduces Article 56A into the Gaming Act. The following shows how the bill protects an operator with a Malta Gaming Authority licence:
- The Maltese law will not act against a licensed operator in matters relating to the operator’s gaming services. That will hold if the action undermines the legality of the entity established to provide licences to casino operators (the Malta Gaming Authority). It also includes activities that undermine the natural obligation of the authority regarding the gaming service in question.
- The Maltese law will not act against a licensed operator if it relates to a lawful activity as contained in the Gaming Act.
If these conditions are true, the Court will not recognize or enforce any foreign judgment on the operator’s action. Bill 55 Malta aligns with the country’s long-standing public policy to preserve the Maltese gaming framework for remote services. The long-standing public policy has been in operation since the early 2000s.
It is worth noting that the Bill stops Maltese courts from ruling in favor of foreign plaintiffs if the operator’s action is legal. The legality of the action is up to the Maltese law or the Gaming Act to determine.
Objectives of Bill 55 for gaming
The Times of India reported a 13.2% contribution from remote gaming services to Maltese economic growth in 2018. With such substantial contributions as the operators provide business services, Bill 55 was passed to protect them. The legislation is in full conformity with public policy and Malta’s commitment to its private gaming sector.
For Malta, the legislation promotes the following:
Encouraging private gaming services
Bill 55 provides a legal framework that protects gaming services from foreign liabilities. It aligns with the Constitution of Malta, which promotes the resilience of private businesses.
With this backing, operators can push their services worldwide without fear of losing credibility and funds in foreign lawsuits. They’ll receive full support of Bill 55 if the action in question is legal under Malta law.
Attract new businesses
The new bill goes beyond the gaming industry. As Malta seeks to attract new businesses, Bill 55 will encourage them to register there. Ultimately, the economy of Malta will receive a boost from the competition and innovation these businesses bring.
Operations in the country will be stable enough for optimized growth. Provided the businesses operate within the law, they’ll have nothing to worry about in the country.
How Bill 55 affects Malta’s online casinos
Bill 55 has not made many changes to the existing legal framework in the Gaming Act. However, it reinforces Malta’s commitment to protecting operators holding the Malta Gaming Authority licence.
While Malta might deem some actions legal, other countries with stricter regulations might find them illegal. With that playing field, it becomes easy for online casinos licenced by the MGA to get sued outside Malta. Such violations can result in fines and orders challenging the authority of the MGA.
With Bill 55, casinos will not be ordered to follow through with foreign rulings in Malta if their actions are legal. Foreign courts can still take legal action against operators in their jurisdictions. Nevertheless, the stability the new law provides will encourage an operator to dig into Malta.
Criticisms of Bill 55
Legal observers in Germany, Austria, and other parts of the European Union have challenged the legality of Bill 55 under EU law. To them, the new law is a subtle way for Malta to escape lawsuits affecting its licenced operators within the European Union. If allowed, the bill enables Malta to bypass accountability.
Lawyers with experience in lawsuits against casinos argue that the law undermines the European Commission. It will restrict citizens’ freedom to file lawsuits against a Malta-licenced operator.
The European Commission has been urged to scrutinize the new law as it acts against the freedoms afforded to citizens to challenge operators.
The Malta Gaming Authority response
While legal observers have grounds to worry, the Malta Gaming Authority believes the law is in full conformity with the EU. It argues that the law does not negate the freedoms afforded businesses by the central principles of the European Constitution.
Does Bill 55 protect operators or uphold justice?
The core of arguments against this law is the balance between protecting an operator and upholding justice. By refusing to rule in favor of foreign plaintiffs, Malta resists enforcing judgment on a “faulting” operator. To critics, the country leans more towards protecting operators in its internal market.
From Malta’s perspective, Bill 55 does not significantly alter the Gaming Act or its public policy for the internal market. The underlying clause in the law rests on the legality of the operator’s actions by its standards. This means it will enforce rulings if the casino’s actions violate the standards endorsed by the Malta Gaming Authority.
The Austrian Case and mounting resistance against Bill 55
Austria’s Supreme Court, in a landmark ruling, ordered 888 Casino to refund all player losses after confirming the illegality of the casino. It maintained that the casino operated illegally in the country. This ruling encouraged other regional courts to stand against casinos with the Malta Gaming Authority licence.
These casinos face lawsuits that threaten their finances, legality, and viability. The courts are poised to protect their consumers, while the casinos hope to protect their businesses. With the mounting lawsuits against MGA-licenced casinos, it is easy to see why the new law is contentious.
With the bill’s scope covering only operations in the MGA’s home country, the conflict reveals a more significant problem in the EU. 888 Casino has cited its MGA licence and EU law as rebuttals against Austria’s Supreme Court ruling.
Bill 55: A win for Malta’s online casinos
The bill’s scope backs up the Gaming Act and the country’s public policy towards its private sector. It does not absolve online casinos of obligations outside the country. However, the scope solidifies the country’s commitment and public policy to protect businesses.
As court rulings challenge the scope and legality of the MGA licence, the new law comes at a crucial time. The EU has a tightrope between recognizing the MGA licence and upholding the sovereignty of nations under it. Till then, the Gaming Act will continue to protect online casinos doing business with the MGA licence.
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