Malta’s EU Law Interpretation: A Look at the European Commission’s Warning
The European Commission recently expressed its concerns to the Maltese government regarding the legality of Article 56A, a provision in Malta’s Gaming Act that was modified in 2023. This article aims to protect Malta-based gaming companies from legal repercussions in other European markets.
Understanding Article 56A
Article 56A was crafted as an amendment to bolster local gaming operators against lawsuits stemming from other jurisdictions within the EU. It explicitly states that Malta will disregard any judgments from European courts that label the services of these gaming companies as illegal.
This clause emanates from Malta’s interpretation of the Treaty on the Functioning of the European Union (TFEU), suggesting that it provides a framework for services, including online gambling, to be accessible across EU member states.
The Road to the Current Situation
The introduction and implementation of Article 56A reflect Malta’s belief that its licensed operators should have the liberty to operate freely across the European landscape. However, this belief has raised alarms in the European Commission, which argues that Malta is not adhering to EU law.
In a notable ruling from February, a Maltese court decided not to acknowledge judgments from Austria concerning player refunds for losses incurred on Malta-licensed websites. This has led to implications for Germany’s gambling sector, where similar cases against Maltese operators have been stalled due to Article 56A’s protective claims.
The complexities surrounding this issue have prompted some cases to escalate to the European Court of Justice (ECJ). In April, the ECJ initiated discussions to determine whether Germany’s local regulations conflict with European law, with an update anticipated in July that could significantly affect player loss cases in Germany.
European Commission’s Concerns
In a formal communication issued on June 18, the European Commission contended that Article 56A unfairly shields Maltese operators from legal scrutiny, thereby undermining the foundational principle of mutual trust in EU judicial processes. The EU also highlighted that the article violates established protocols regarding the evaluation of judgments from other member states, potentially disrupting the balance of jurisdictional authority.
The Commission provided Malta with a two-month window to respond to its criticisms and rectify the highlighted issues, specifically the non-recognition of external judgments involving Maltese licensees. Failure to comply could lead to a formal request from the Commission to align Malta’s laws with EU requirements.
Malta’s Stance
In response, the Malta Gaming Authority (MGA) has staunchly defended Article 56A. They argued that the provision aligns with the TFEU and supports the ability to offer services within the EU. The MGA insists that Article 56A does not serve as a blanket protection against all foreign judgments and does not prevent legal actions within the EU.
MGA officials assert that regulations uphold a framework ensuring responsible gaming practices, safeguarding players irrespective of their origin. They maintain that Malta has adhered to its commitments under EU law and continues to prioritize constructive dialogue with the European Commission.
Insights from the MGA
James Baldacchino, the MGA’s general counsel, reiterated that Maltese licensees operate within the framework of EU freedoms, as long as they comply with local regulations. However, he acknowledged that these operators must also respect the laws of other member states in accordance with the CJEU’s rulings.
Baldacchino added that if restrictions imposed by other EU nations conflict with EU jurisprudence, Maltese casinos could justifiably argue for their right to operate under the freedoms intended by the TFEU.
Note: This article has been revised to specify that the Maltese court’s ruling regarding the non-enforcement of Austrian judgments pertains to Article 45 of the TFEU, rather than Article 56A.