Thursday, June 13, 2024

Controversial gambling law green-lighted in Malta

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Maltese Parliament approved Bill 55, which allows Maltese courts to refuse the recognition and enforcement of foreign online gambling sector-related rulings. In 2023, the Mediterranean island was home to 10% of the world’s online gaming companies. Moreover, 26.2+ million gaming accounts exist in Malta, calling it a safe and regulated place for their activities. While Malta stood at the forefront of industry transformations, the latest Gaming Amendment Bill brought controversial regulatory changes. There’s an ongoing debate about whether this monumental development will affect the market. While stakeholders grapple with its implications, here are the Bill’s outline, key provisions, and potential impacts for licensed operators.

Malta gambling laws background

Malta has a rich gambling regulation history, with a legacy dating back several decades. The small Mediterranean island nation has established itself as a prominent hub for the online gambling industry, thanks in part to its favourable legal framework.

Gambling regulation in Malta started in the mid-20th century. The Lotteries and Other Games Act 2001 marked a significant step in the country’s online gambling approach. This act appointed the Malta Gaming Authority (MGA) as the authority overseeing land-based and remote (online) gambling.

Malta recognised the potential of online gambling early on and positioned itself as an industry pioneer. In 2004, Malta became one of the first EU member states to regulate online gambling, introducing the Remote Gaming Regulations. This move attracted gaming companies to set up their operations on the island due to the favourable tax regime, modern infrastructure, and skilled workforce.

The Maltese government has attempted to improve and update its gambling legislation in response to industry developments. These reforms aimed to enhance consumer protection, prevent money laundering, and maintain the gambling sector’s integrity. The updates also seek to align the Maltese law with evolving European Union gambling-related regulations and standards.

One notable reform attempt was the proposed Gaming Act of 2018. This comprehensive legislation aimed to consolidate and modernise the existing legal framework. It sought to strengthen player protection measures and streamline the recent MGA casinos’ licensing process. However, this proposed legislation faced criticism and underwent further revisions in the Maltese Parliament.

Controversial law’s key provisions

According to the Maltese Parliament’s speaker, new law codifications encourage the further establishment of Malta-based companies. The act likewise relates to offshore operators who want to supply gaming services compliant with local legislation. Given the proclaimed best intentions, readers may ask where this document’s controversy is. Let’s check its main provisions.

First, Bill 55 turns off actions against MGA licensed casinos or operators if such actions:

  • conflicts or undermines the provision of gaming services’ legality,
  • results in efforts to question the legitimacy of the provision of gaming services,
  • relates to a lawful and licenced activity already enabled by The Gaming Act.

Therefore, Maltese Courts will refuse recognition or implementation of any foreign judgment regarding the mentioned actions. Practically, the law applies only when, for example, an MGA licenced casino operator undermines the Maltese legal framework. Malta won’t implement foreign judgments since they manifest against the country’s public policy. Bill.55′ controversiality means foreign betting operators’ actions against MGA licenced casinos no longer have force within Malta’s legal framework. As expected, the law received mixed opinions.

The law received mixed opinions.

Stakeholder feedback

While Maltese operators receive robust legal protection, offshore operators challenge the decision. European Union law experts claim Bill.55 conflicts with the Treaty on the Functioning of the European Union (TFEU). Namely, it restricts proclaimed freedom of providing services within the EU. The case where local operators offer the same services for which offshore operators are banned is protectionism.

The Maltese “protective shield” raised questions and faced lawsuits in Germany. The EU Commission is examining German lawyer Dr Benedikt Quarch and Austrian lawyer Karim Weber’s complaints against MGA.

On the other hand, MGA points out German and Austrian law firms’ “very aggressive advertising” tactics. They encourage players to seek legal assistance after suffering substantial financial losses. Whilst German and Austrian casinos refuse to pay, MGA licenced casinos suggest many foreign players now have the full ability to reclaim losses.

Potential effects and outcomes for the gambling industry

Controversies aside, certain operators welcomed the act. For example, Entain decided to pay out players’ losses. Other brands nevertheless wait for the initial legal proceedings’ completion. The issue mainly addresses offshore operators, but Malta based companies continue providing regulated online gambling. Of course, players want to enjoy a safe and licenced online gambling experience. Finding a reliable casino in the light of recent events is challenging. We suggest you check the site and find a trustworthy MGA licenced casino to play with peace of mind. Maltese operators provide financial and legal protection, keeping all industry stakeholders worry-free.

Comparisons to international gambling regulations

The recent online gaming regulation has a common ground with other nations’ acts, despite the claims of creating a legal loophole. Let’s see how international gambling regulations differ from the Maltese legal framework.

The recent online gaming regulation has a common ground with other nations' Acts.The recent online gaming regulation has a common ground with other nations’ Acts.

The 888 online casino refused to repay an Austrian customer’s losses. PokerStars correspondingly challenged the Austrian Supreme Court. Yet, the Court didn’t relate its decision to the European Union’s freedom of movement principle. In contrast, they argued about online casinos’ legality of provision services in the Austrian market. Arguably, it looks much like the latest Maltese law.

Another precedent that inspired the Malta Gaming Authority MGA to react was in Germany. An unnamed casino had to recover €26,000 that a player lost. The Frankfurt Higher Regional Court decided the casino must repay since the online gambling site worked without a valid German licence.

The situation remains unresolved and volatile. One thing is clear: Maltese operators now enjoy better protection, enabling higher-quality services. Other regulated jurisdictions within the European Union must act quickly to retain their positions.

FAQ for gambling law in Malta

Why is the law considered controversial?

Bill.55 turns off foreign betting operators’ actions against MGA licenced casinos. Still, it grants Maltese operators more freedom to establish better player-protection measures and modernize their actions.

How will the law affect gambling operators in Malta?

Licensed operators now have Malta as a substantial hub for online gambling activities. MGA licenced casinos get a shield from legal repercussions. Moreover, they get a greater sense of security and confidence.

What does the approval of this law mean for players and consumers?

Players and online gambling stakeholders receive additional protection from financial and legal issues. Renowned and new MGA casinos safeguard from losses and provide legal assistance for filing claims.

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