Malta’s Freedom Of Movement Arguments Are Rejected By The EU Court Justice
Malta’s defense of its gaming legislation and licenses against challenges from EU member states has suffered yet another setback from the European Court of Justice. The conflict between German authorities and the divisions of Lottoland, and between Maltese authorities with headquarters in Malta, was the subject of an earlier ECJ preliminary decision. The European Court of Justice came to the conclusion that member states may prohibit online services offered by other member states without violating EU law. This decision upholds Germany’s prohibition on online slot machines and lottery wagering, and it defines that players may file a lawsuit for damages they experience at businesses that lack a license or violate other EU regulations or laws.
This ruling is related to an extended legal battle between German and Maltese courts over the operations of licensed and Malta-based businesses in other EU markets. In the initial arguments, Malta challenged the ruling of German courts, claiming that licenses issued by Malta’s Gaming Authority (MGA) followed the principles of the Treaty on the Functioning of the European Union.
TFEU regulations related to “unrestricted services” given that Germany’s Bundesländer and Bundestag could not agree on the conditions of the new interstate gambling regime, MGA licenses thought they could provide iGaming services. In effect from July 1, 2021, Germany’s federal states passed the Interstate Treaty on Gambling, which finalized allowances to regulate and license internet gambling, after more than 10 years of mediation and regulatory limbo.
The Larger Picture
2 Malta-based, licensed businesses operating in Germany and one operating in Austria in the late 2010s and early 2020s are the main focus of the EU disputes. Although the ECJ made views on the cases, this is the first preliminary ruling, an official interpretation of EU law.
The two companies – Tipcio and Lottoland- are the companies that are in question, which primarily deal with German jurisdiction. An ex-client who wanted to recover losses incurred during his time, between 2013 and 2020, which resulted in a lawsuit against the former. On the other hand, Tipcio applied for and eventually gathered a license once the German market was re-regulated in 2021, but it did not have one during that time. In the example of Lottoland, a former client wanted a reimbursement for losses experienced back in 2019 and 2021.
Although the ECJ preliminary decision relates to the Lottoland issue, it will surely have an impact on the legal problems between Tipico and Virtual Services Limited, the latter of which is engaged in action connected to Austria. In particular, the court decided that Article 56A of the TFEU “must be interpreted as not precluding national legislation which imposes a prohibition on the organization of online casino games, in particular slot machines, and of forms of betting such as online betting on the results of lottery draws.”
This basically indicates that Malta’s primary legal argument regarding the operations of its licensed enterprises has been declared unconstitutional by the EU’s highest court.
Bill 55 at Risk?
Under Bill 55, the informal name for a 2023 change to the nation’s Gambling Act – more precisely, Article 56A – Malta has been closely structuring its iGaming sector. Furthermore, Bill 55 gives Maltese courts the authority to refuse orders against licensed and Maltese-branded businesses that, while normally conforming to Maltese law, may not be abiding by the legislation of other EU member states in which they operate businesses.
Based on Article 56 of the TFEU, the Maltese argument is predicated on EU freedom of movement and business.
Maltese courts contend that Bill 55 and the operations of its licensed gaming enterprises in nations like Germany are supported by EU freedom of commerce. Does this suggest that these conflicts are resolved as a result of the EJC ruling? most definitely not.
Bill 55 was created specifically to shield gaming companies from foreign court actions due to the long-standing legal disputes between Maltese and other EU courts.
About 10% of Malta’s GDP comes from gambling, and the island is seeing some growing threats to its standing as a global center for iGaming in places like Estonia and the United Arab Emirates.
Malta claims that international decisions that go against its regulated framework shouldn’t be applied locally, citing Bill 55. Malta believes that its own internet gaming laws are covered by this protection. The country also argues that Bill 55 offers an important safety measure to prevent its domestic courts from being overrun by a rise in reactive lawsuits related to online gambling disputes, many of which have been assigned to third-party claims firms by EU courts, a pattern in the current volume of cases.
Therefore, this is effectively defined in national law by Bill 55.
https://www.igamingtoday.com/maltas-freedom-of-movement-arguments-are-rejected-by-the-eu-court-justice/#:~:text=This%20ruling%20is%20related%20to,businesses%20in%20other%20EU%20markets.