Malta Defends Legal Changes To 'Protect' Public Policy

June 22, 2023
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Malta’s controversial Bill 55, which is now enshrined into law, is designed to protect the country's public policy by blocking foreign court judgements against gambling firms, say officials.

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Malta’s controversial Bill 55, which is now enshrined into law, is designed to protect the country's public policy by blocking foreign court judgements against gambling firms, say officials.

Silvio Schembri, the Minister for the Economy, EU Funds and Lands, said the bill is designed to “protect the status of the Maltese gambling licence from unfounded challenges” and reflects the Maltese government's “unwavering commitment to the online gambling industry”.

The Ministry for the Economy, EU Funds and Lands was responsible for tabling the bill.

Speaking at iGaming NEXT on June 22 in Malta, Schembri explained that the Maltese licence was always designed as a “point of supply licence”, something that the Malta Gaming Authority (MGA) elaborated on June 21 in its own response to the bill’s introduction.

The MGA explained that the Maltese licence “enables licensees to operate cross border from Malta, provided that a justifiable legal reason to provide their services to customers ... in compliance with the robust legal framework that is established under Maltese law and their licence conditions”.

Schembri believes the legal change codifies a long-standing public policy to “stand against foreign judgements that will now not be recognised and will not be enforced”, as such judgements are deemed to be “against Malta’s public policy”.

The MGA said that: “The scope of the amendments enacted into law is restricted.”

“The law does not preclude any action whatsoever from being taken against a licensee. The provisions shall only be applicable when the action – taken by an operator against a player, or a player against an operator – conflicts with or undermines the legality of the Maltese framework, and is related to activity which is lawful in terms of the Gaming Act and the other regulatory instruments applicable to the MGA licensees,” according to the regulator.

Additionally, “foreign judgements that fulfil the aforementioned criteria shall not be recognised and enforced in Malta, since the amendments are intended to clarify that such judgements are manifestly against the public policy of Malta,” according to the MGA.

Schembri reassured the audience that the bill will strengthen consumer protection for Maltese people and that the regulator has the authority to "swiftly take action against non-compliance".

“Malta is the Silicon Valley of the online gambling industry due to its regulatory framework, which provides legal certainty and the optimum environment for gambling businesses,” the minister said.

Schembri said the sector helps employ over 15,000 in Malta, representing 5.4 percent of its workforce.

“This puts great responsibility on our shoulders. We are more committed to ensuring our policies develop along with industry needs, to benefit the industry and the country. We want a sustainable ecosystem,” he said.

The minister did not mention whether or not the bill will be applied retroactively.

The bill has been controversial, in particular among Austrian stakeholders that are pursuing lawsuits to get players' refunds since the Austrian Supreme Court said an Austrian online casino monopoly is not incompatible with European Union law.

Additionally, some believe Malta is taking a risky step in defending its licensees against the suits, only a year after it was removed from the Financial Action Task Force greylist after improving its financial oversight.

The Civil Justice Unit at the European Commission's Directorate-General for Justice and Consumers confirmed to VIXIO GamblingCompliance that: "The Commission is currently assessing the recently adopted Maltese Bill and is in touch with the Maltese authorities on the matter."

The litigation-finance companies that fund the player lawsuits have reacted with fury and at least one set of lawyers have already written to the European Commission complaining that Malta is seeking to “blatantly undermine EU law”.

Meanwhile, others have stepped in to defend the bill. The president of Austrian gambling trade group OVWG, Claus Retschitzegger, said: "This law is not about the interests of the providers or the players, but about the protection of Maltese public order, in which gambling plays an essential role."

Malta is in line with EU law by rejecting court judgements that conflict with its public policy, the OVWG said.

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