Gambling is one of the most popular pastime activities in the world and since there is a lot of money in circulation, governments are focused on passing the right regulations in order for people to feel safe and generate some tax money.
The real problem with the gambling industry for countries started with the transition to online gambling. And that’s obvious.
The problem with digital casinos for countries is that the money could flow outside of the country, which is why many of them are not approving foreign online casinos and the casino operators may face legal actions. You can read more on online casino legislation here: www.hoopcasino.com.
But the Maltese government thinks otherwise, and they’ve passed a controversial law that aims to protect operators licensed in Malta.
On June 16, President George Vella of Malta put his signature on Act No. XXI of 2023, known as the Gaming (Amendment) Act, officially making it a law.
This act carries provisions directing the courts to reject any foreign judgments against operators licensed in Malta who are actively participating in the European market.
Legal safeguard for Maltese operators
This legislative move, which was introduced on April 24, is designed to shield Maltese operators from facing legal actions related to the provision of gaming services, as long as their activities fall within the scope of their existing licenses.
Malta-based companies in European markets
Under this new law, a protective shield is erected around businesses based in Malta, including some of the industry's giants, that offer online gaming services across the entire European single market.
European Union legal framework
Those involved in these operations claim that their gaming services fall under the Treaty of the Functioning of the European Union, which guarantees the free flow of services within Europe.
However, European governments and regulatory bodies are citing a 2017 decision by the European Commission as the legal basis for their stance, which allows them to block Maltese-based businesses from accepting bets within their jurisdictions.
Complex legal battles
This complicated legal situation has been further complicated by several ongoing legal cases, particularly in Germany and Austria.
Austrian Supreme Court ruling and implications
In a judgment handed down in June 2021, the Austrian Supreme Court (OGH) upheld the lower courts' decisions, ruling that PokerStars, owned by Flutter, was operating in violation of the federal gambling monopoly. Consequently, all of PokerStars' gambling contracts were deemed null and void, leading to a successful reimbursement claim by the plaintiff, who had incurred losses exceeding €28,000 over five years and was represented by G&L Rechtsanwälte.
Legal precedent set in Germany
In Germany, the Frankfurt Higher Regional Court ordered an unnamed online casino to reimburse a player over €26,000 in losses incurred before online gambling was regulated in the country, confirming a previous lower court decision.
Opening the door for legal claims
These legal precedents have paved the way for numerous claims against operators who have had historical or present-day activities in these markets. AdvoFin alone asserts that it has recovered €40 million in player losses on behalf of 1,500 plaintiffs through its legal actions.
Varied reactions to legal decisions
While some operators, such as Entain, have chosen to honor payments for losses, others have contested the decisions. Notably, 888-owned entities like Mr. Green and William Hill, as well as Flutter-owned PokerStars, have refrained from making any payments for judgments against them for a considerable duration.
Legal proceedings in Malta
Consequently, many legal professionals have initiated legal proceedings in Malta, where a significant number of these businesses are headquartered.
888's position and EU law
In May, iGB interviewed an individual who had secured a final, non-appealable judgment against 888-owned Virtual Digital Services Limited, a subsidiary that offers gaming services in the European market without possessing a local license. Given 888's refusal to fulfill its payment obligations, this company had enlisted the services of a local Maltese firm to sue the operator.
888, on its part, maintains that its Maltese license authorizes it to provide services to European consumers and cites the fundamental EU principle of freedom to provide services to support its position. Despite challenges in Austrian courts, the group continues to contest the compatibility of the Austrian licensing regime with EU law.
Final words
This new bill is designed to safeguard operators licensed by the MGA and protect their interests under specific circumstances.
It is still not known what the impact of this law will have on the global gambling scene and how other countries react.
Disclaimer: Play responsibly. Players must be over 18. For help visit https://www.gamcare.org.uk/.