EU Advocate General’s opinion corners Malta, declaring Bill 55 in breach of EU law

(AsiaGameHub) –   An Advocate General (AG) of the Court of Justice of the European Union (CJEU), Cypriot diplomat Nicholas Emiliou, has issued another significant EU legal opinion against Malta’s Bill 55.

This marks Emiliou’s second opinion in as many months concerning a case related to Bill 55. His latest statement primarily addressed a request from an Austrian court for a preliminary ruling on the compatibility of a provision within the Maltese Gambling Act, known as Bill 55, with EU law.

In his assessment, Emiliou deemed the Austrian court’s request inadmissible.

The court’s request stems from ongoing legal disputes involving Austrian and German courts. These courts are considering claims for restitution by players who lost money with operators licensed in Malta, but who did not hold, or no longer hold, licenses in Austria or Germany at the time of the losses.

Despite the inadmissibility of the request, Emiliou did not refrain from commenting on Bill 55, which is the common designation for Article 56A of Malta’s Gambling Act. Enacted in 2023, Bill 55 is designed to shield Malta-licensed betting and gaming companies from foreign court judgments.

Emiliou stated that national legislation such as Bill 55 is “manifestly incompatible with the rules governing the recognition and enforcement of judgments” originating from Brussels.

He further elaborated that judgments concerning player restrictions against Maltese online gambling operators, issued in other EU member states, must be “recognised and enforced in all other member states, including Malta”.

It is important to note that ECJ AG opinions are not legally binding; their purpose is to guide ongoing legal discussions and cases. Nevertheless, these opinions can carry considerable weight, particularly given the current volume of legal challenges between Maltese and other EU courts.

Thomas Bugeja, a Partner at the Valetta-based law firm Fenech & Fenech Advocates, commented on LinkedIn that “these observations will no doubt form part of the wider legal debate around Article 56A”.

Malta’s Position Weakened

Overall, Malta’s efforts to protect its gambling market appear to be facing significant challenges, with a substantial setback occurring last week.

On April 16, a preliminary ruling from the ECJ—which, unlike an AG opinion, is legally binding—determined that EU law does not preclude member states from prohibiting online gambling services operated from other member states.

This ruling undermined the argument put forth by Maltese legal authorities, which contended that companies holding licenses from the Malta Gambling Authority (MGA) operating in other EU nations were protected by the EU’s freedom of trade principles.

Reinforcing this stance yesterday, AG Emiliou asserted that “other member states are entitled to apply their respective gambling laws to operators licensed in Malta”.

He added that “situations are bound to arise in which the services provided by a gaming operator holding a Maltese licence are unlawful in a Member State while being lawful under Maltese law”.

Commenting on LinkedIn, Dr. Jeanella Grech, a Lawyer Linguist at the CJEU, summarized Emiliou’s opinion as stating “that there is no mutual recognition of gaming licenses in EU law and, hence, a Maltese gaming license is in principle valid only in Malta”.

Malta’s iGaming sector is a crucial component of the Mediterranean island nation’s economy, with the online gaming industry, regulated by the MGA, contributing approximately one-tenth of the country’s annual GDP.

This sector’s success has been largely attributed to two factors: a 5% tax rate and the perception that an MGA license, along with its associated standards, enables international operations within the EU and beyond.

The legal challenges from Austria and Germany, coupled with CJEU rulings and AG opinions, are now questioning this perception and could potentially impact Malta’s standing as a leading global iGaming hub.