EU Court’s New Ruling Could Transform Malta’s Gaming Industry
Overview of the Court’s Decision
The Court of Justice of the European Union (CJEU) has recently ruled that players who suffer losses while gambling with operators lacking a local license can pursue legal claims under the laws of their own country of residence. This landmark decision stands to reshape the regulatory landscape for Malta’s gambling sector, particularly its grey-market operations.
Impact on Malta’s Gambling Framework
The CJEU clarified that the governing law in gambling disputes is generally that of the place where the player experiences the harm. This means that if a player based in one EU country loses money gambling online with a company licensed in another member state—but not in the player’s own country—the loss is considered to have occurred in the player’s home country. This interpretation challenges Malta’s current protective regulations.
Currently, many gaming operators in Malta benefit from protections granted by local legislation often referred to as Bill 55. This law safeguards business-to-consumer (B2C) gaming companies licensed by the Malta Gaming Authority (MGA) from liability tied to their licensed activities. The new ruling, however, threatens this shield by potentially allowing players to bypass Malta’s licensing framework.
Background: Cases Leading to the New Law
The ruling follows several legal battles initiated by players from countries such as Germany, Austria, and the Netherlands. These players sought compensation over gambling activities they considered illegal under their national laws. A notable example involves a case from Austria where a customer sued directors of Titanium Brace Marketing, a Maltese operator affiliated with SkillOnNet, which is currently in liquidation.
Although Titanium held a Maltese license, it lacked one in Austria, leading to claims that it was operating illegally under Austrian law. The plaintiff argued the gambling agreement was invalid and that the company’s directors should be held personally accountable under local legislation.
The directors contested, asserting that Austrian courts had no jurisdiction since any harm occurred in Malta and that Maltese law, which does not hold directors personally liable, should apply. This dispute reached the CJEU, setting the precedent for the current ruling.
Potential Consequences and Ongoing Challenges
The new legal framework introduced by the CJEU is still facing opposition from certain EU countries unhappy with the ruling. Nevertheless, this precedent may encourage more players to bring forward claims against unlicensed gambling operators based in Malta but offering services in other EU nations.
Overall, the decision signals a shift towards prioritizing the laws of the player’s residence, potentially resulting in stricter regulatory scrutiny for Malta’s offshore gaming market and altering how gambling companies operate across EU borders.
