In Response to Malta’s Contentious Gambling Shield Law, EU Files Lawsuit Against Country

The Maltese gambling shield law limits the ability to issue rulings against gaming businesses with a Malta license, which may restrict consumers’ ability to pursue legal action.

Article 56A of Malta’s Gaming Act, a controversial clause that was formerly known as Bill 55, has prompted the European Union (EU) to launch infringement procedures against the country. The law significantly limits the ability of certain foreign court rulings against Malta’s licensed gaming firms to be enforced. Legal experts contend that by violating the fundamental rights of EU citizens and residents, the clause threatens the European rule of law.

EU Argues That European Legal Principles Are Undermined by Article 56A

Malta’s claim that only its courts have the authority to enforce rulings against licensees under the Malta Gaming Authority (MGA) is at the heart of the ongoing conflict. In actuality, Article 56A has acted as a legal barrier, preventing rulings from overseas tribunals that conflict with the country's regulatory position. It’s particularly pertinent when people try to recover their gambling losses from Malta-based businesses.

According to Malta’s “point-of-supply” gambling model, businesses that comply with Maltese law are permitted to operate outside the borders of a transnational political and economic union of 27 member nations, most of which are in Europe. The country maintains that this strategy is consistent with EU single-market freedoms. But the European Commission (EC) views the issue differently, which is why there are already legal disputes.

The Brussels I (recast) Regulation, which governs civil and commercial cross-border disputes inside the EU, may be compromised by Article 56A, according to the EC’s Letter of Formal Notice. The case’s legal experts contend that the statute infringes upon the rights of EU residents and jeopardizes the legal consistency of member states.

Malta Holds Firm to Its Position

The MGA responded by stating that blanket immunity isn’t granted by Article 56A. Rather, it contends that the clause merely codifies accepted legal doctrines. The “ordre public” exception, which permits national courts to refuse to enforce foreign decisions where they conflict with fundamental public policies, is the most notable example of this.

In keeping with the MGA’s stance, the Maltese government also released a stand-alone statement defending the law as a crucial part of the country's long-standing policy on Internet gambling. It maintained that the legislation is consistent with the spirit of EU law and doesn’t create new grounds for overriding court rulings.

The resolution of this disagreement might have a big influence on Malta’s gaming industry, which draws operators with the promise of a secure regulatory haven, even though Malta is still committed to maintaining positive engagement with the EC. The Maltese government must respond formally within the next two months, after which the case may be taken to the European Court of Justice (ECJ).