Controversial Gambling Law Approved in Malta

The Maltese parliament has approved the submitted bill that protects gambling companies with a licence from the Malta Gaming Authority (MGA) from foreign claims. This approval results in the inclusion of the new law, called Bill 55, in the existing gambling legislation on the island of Malta. The law orders Maltese courts to refuse to recognise any foreign judgements against MGA-licensed operators active in other countries within the EU.   

This amendment to the gambling law also has significant implications for players who have ongoing claims against online casinos from Malta. According to SBC News, President George Vella of the country has approved a controversial bill.

Bill 55 states that Maltese courts cannot recognise and enforce foreign judgments if the gambling companies with a Maltese licence have complied with the laws of Malta. Currently, there are still thousands of ongoing lawsuits in which players are seeking compensation from online casinos licensed by the MGA.

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International Disapproval

In April, the Maltese Minister of Finance, Silvio Schembri, introduced this new bill, which has sparked criticism abroad. Particularly in Germany and Austria, where lawyers have filed a complaint with the European Commission, there has been disapproval, coming from both players and lawyers. In these two countries, there are still ongoing lawsuits against online casinos that have offered their gambling products illegally (without a local licence). In some cases, players won these lawsuits. With the approval of the bill, it will become less likely that players will be able to successfully take MGA casinos to court.

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Cases from Austria and Germany

The new law comes into effect in relation to a number of ongoing German and Austrian lawsuits regarding the legality of the operations of certain operators in those countries. In a ruling in June 2021, the Austrian Supreme Court (OGH) – confirming the decisions of two lower courts – found that PokerStars (owned by Flutter) was acting in violation of the federal gambling monopoly. As such, the court determined that all gambling contracts of PokerStars were null and void. Therefore, the plaintiff’s claim for reimbursement was granted. The plaintiff reported losses of over € 28,000 (NZ$ 49,600) over a period of 5 years.

In Germany, the Appeals Court in Frankfurt ordered an unnamed online casino to reimburse over € 26,000 (NZ$ 46,000) in losses to a player who used the site before online gambling was regulated in Germany, also confirming the decision of a lower court. These precedents have opened the door to thousands of claims against operators with historical or current activities in those countries. The company AdvoFin alone claims to have recovered € 40 million (NZ$ 70m) in player losses for 1,500 plaintiffs through its legal activities.

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Free Movement of Goods and Services

In several countries, lawyers have called on governments to take action. According to Loonstein, EU member states may not enact laws that are in violation of European legislation. Moreover, he questions the duty of care of online casinos as major legal changes are underway. According to Malta, online casinos with an MGA licence are allowed to continue to offer their services in Europe. This is based on the free movement of goods and services within the continent, as long as they comply with Maltese legislation. Malta is home to a large number of online casinos that offer their services internationally. Together with the licence from Curaçao, the MGA licence is known as a universal licence for providers targeting an international audience. However, the MGA licence is highly regarded, whilst the Curaçao licence is mainly used by crypto casinos.

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