Malta's gaming sector dealt a blow by EU court official's opinion
Law shielding gaming companies from foreign judgments ‘contrary to EU rules’
A law protecting gaming companies from foreign court judgements is “manifestly incompatible” with European Union regulations, according to a non-binding legal opinion by a top EU court official.
In a statement summarising the legal opinion, the Court of Justice of the European Union (CJEU) highlighted how advocate general Nicholas Emiliou said judgments delivered by the courts of one member state upholding claims for player losses must be recognised and enforced in all EU countries, including Malta.
The law protecting Maltese gaming companies from foreign judgements was introduced by the government in 2023 on public policy grounds.
It aims to protect Maltese companies from claims arising from the legality of their operations in other European Union countries.
The legal opinion by Emiliou is non-binding and recommends that a case referred to the CJEU by the Austrian courts that would have tested the legality of the Maltese law is inadmissible.
The CJEU statement said Emiliou nonetheless still delved in to the substance of the legality for the sake of completeness.
Emiliou says the Maltese law appears to rest on a particularly expansive interpretation of the freedom to provide services.
According to that interpretation, operators holding a Maltese gaming licence would be entitled to provide their services freely and lawfully throughout the EU, as long as they comply with Maltese law.
That interpretation has, however, been consistently rejected by the CJEU, the opinion says.
The CJEU statement summarising the opinion says EU countries may, in principle, apply their respective gambling law also to operators which provide services to consumers within their territory from another EU country, such as Malta.
Furthermore, under the current state of EU law, EU countries are under no obligation to recognise gambling licences issued by other member states, the statement continues.
Accordingly, a Maltese gaming licence is, in principle, valid only in Malta and, where appropriate, in those EU countries which choose to recognise such licences.
The advocate general says that the new law has at its core a protective purpose.
It is designed to shield an industry which the government itself describes as “essential” to the national economy from the potentially significant financial consequences that could arise if the operators concerned were required to satisfy the player’s claims concerned.
CJEU case law however shows that the enforcement of certain judgments may entail serious economic consequences for a national operator, an industry or even the country as a whole does not justify recourse to the public policy clause.