This judgement has come at a pretty interesting time. Thousands of players in Germany, Austria and the Netherlands are all suing Malta-based operators who’ve been doing business in those countries without getting a local licence.
An Austrian Player and a Maltese Casino
An Austrian player sought to recover approximately €18,500 lost at the Titanium Brace casino, which was operating in Austria without a licence. The casino argued that the case should be heard under Maltese law, since that was where the company was registered.
The Austrian court disagreed and referred the matter to the CJEU. The Court ruled that, under EU regulations, the law of the country where the damage occurred applies. In the case of online gambling, that is the player’s country of residence.
Local Courts Now Have the Final Say
Until now, operators with a Maltese licence could run their business across Europe without obtaining a local licence in each country. They assumed this was allowed. Courts in Germany and Austria have now made clear that local law applies regardless of where the operator is registered.
That’s why we’re already seeing big class-action lawsuits popping up in Germany and Austria. And lawyers acting for players are saying that thousands of lawsuits will soon be heading to Malta.
Malta’s Prepared Early
Malta had been preparing for this situation for some time. At the end of 2023, Section 56A, also known as Bill 55, was added to the Gaming Act. It states that Maltese courts are not required to recognise or enforce foreign court decisions that conflict with the terms of a Maltese MGA licence.
The MGA reacted to the CJEU ruling by stating that it was important but does not change the game. According to the regulator, the court did not affect the Maltese legal system and did not assess the legality of Bill 55.
The European Commission is already putting pressure on Malta, claiming that it is not complying with EU rules on the recognition of court decisions. Germany, Austria and the Netherlands had previously raised objections to Bill 55, arguing that it absolves operators of liability and weakens consumer rights in their countries.
The Ruling has Limits
The Court of Justice of the European Union has made it quite clear how this ruling applies. It applies only to situations where players seek to hold company executives liable for violating national licensing rules. And even in such cases, if the matter is clearly linked to another country, the rules may not be strictly enforced.
This means that each case will be considered individually, rather than automatically decided based on some general EU ruling. And Law No. 55 remains in effect in Malta, even if foreign courts do not take it into account.
The Dispute Continues
This decision is already being challenged at the EU level by several countries that simply disagree with its rationale. Meanwhile, courts in Germany and Austria continue to set their own precedents in similar cases.
For operators relying on a Maltese license to conduct business in Europe, the situation is becoming quite complicated. The question of whether a Maltese license is sufficient to operate in any EU country is now being decided by the courts of the player’s country of residence, which completely upends the business plan of the offshore iGaming sector.
