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The Maltese government wants to prohibit foreign judgments, including those from within the European Union, from being enforced against gambling providers licensed in Malta.
The proposed amendment was published in a Supplemental Government Gazette on May 2, 2023, after it was introduced to parliament on April 24 by Silvio Schembri MP, minister for the economy, European funds and lands.
The bill states that no action can be taken against a licence holder if its deemed to conflict with or undermine gambling services in or from Malta or the legality of any legal or natural obligation resulting from the provision of gambling services.
Maltese courts could also in some instances refuse recognition or enforcement in Malta of any foreign judgment.
The official objective of the bill “is to codify in law the long-standing public policy of Malta encouraging the establishment of gaming operators in Malta who offer the local and cross-border supply of their services in a manner compliant with local legislation, in an effort to encourage private enterprise”.
However, Stefan Bohar, a member of the AdvoFin Litigation Financing Board, who is currently financing thousands of reimbursement cases in Austria against online casino operators, believes that if the law is approved it will likely lead to the European Commission launching infringement proceedings against Malta.
“This could cost a lot of money in terms of legal fights or even lead to fines. I don't see where this is going. It could truly hurt the country,” Bohar told VIXIO GamblingCompliance.
The Ministry for the Economy, European Funds and Lands has not yet responded to a request for comment.
Bohar believes that Malta is “disregarding any European law that would make enforcement against licensed operators possible”.
Some gambling providers have not been paying judgments in Austria or Germany, where it is possible to reclaim losses from unlicensed operators, for the past two years, according to Bohar.
"We are financing the litigation of around 5,000 claims, of which 500 claims have not been paid despite legally binding judgments. These are enforceable judgments under EU law. We have been enforcing a selection of these judgments for over one and a half years, leading to full-on lawsuits in Malta. The enforcement action is challenged in Malta under the guise of public policy,” Bohar said.
Sources indicated for several months prior to the amendment that numerous enforcement cases have been underway in Maltese courts after claimants had issues recuperating funds from some operators based there.
Bohar explained that the Court of Justice of the European Union (CJEU) cases have already discussed the matter of the Austrian gambling law multiple times and his judgment is that “based on the numerous judgments of the ECJ, there is no public policy ground to deny the enforcement”.
The European Commission has been notified of the proposed law by AdvoFin, as have Austrian members of the European Parliament (MEPs) and German legislators.
There is no official timeline for the next steps of the introduction of the bill, but Bohar believes it could be approved ahead of the Maltese parliament's summer recess.
In August 2021, the Austrian Supreme Court opened the door for claims for millions of euros in reimbursement for online casino losses, after it ruled that foreign online casino operators are illegal, their contracts with players are invalid and gambling losses should be refunded.
However, recently, Austria’s Supreme Court affirmed lower court rulings holding that a player from the Austrian state of Styria has no right to reimbursement for sports-betting losses from a European Union-based gambling operator, according to Stadler Voelkel Attorneys.
An Austrian court also recently declared that loot boxes are a form of gambling that requires a licence in a non-legally binding decision that could cost video game companies million.
Some online casino operators that have not paid out in these reimbursement cases have argued that the position adopted by the Austrian courts is contrary to the fundamental EU principle of freedom to provide service.
