The future of Malta’s contentious Bill 55 was brought into question by a top European Union (EU) official this week, who called the measure inconsistent with established EU laws.
Advocate General of the European Court of Justice (ECJ), Nicholas Emiliou, challenges Malta’s use of public policy to block foreign judgments, saying EU law does not allow courts to refuse enforcement over alleged misapplication. He also rejects that Maltese licenses grant EU-wide rights, noting member states can regulate gambling and need not recognize foreign licenses.
Economic impacts should not override legitimate legal principles, judge argues
Emiliou had reviewed a request from an Austrian court on whether Malta’s Bill 55 aligns with EU law. The 2023 measure requires Maltese courts to dismiss foreign judgments against licensed gaming companies when those rulings hinge on activities legal under Maltese law.
For example, if an online operator based in Malta is used by a citizen in another state where gambling is banned or strictly regulated, the business is currently protected by Bill 55 and the legal statutes existing within the country.
Emiliou dismissed the Austrian request as inadmissible because the case centers on whether a lawyer’s advice was reasonable, not whether Bill 55 complies with EU law. He argued the EU court should not weigh in, as the legal question is too indirect to justify a preliminary ruling.
However, within his judgement, Emiliou revealed a more consequential opinion that could affect the long-term feasibility of Bill 55. He questioned Malta’s use of public policy to block foreign rulings, saying EU law does not allow courts to refuse enforcement over alleged misapplication. He also rejected the idea that Maltese licenses grant EU-wide rights, noting countries can regulate gambling and need not recognize foreign licenses.
He added the law appears aimed at shielding a key industry from financial risk, which cannot justify bypassing EU enforcement rules. While nonbinding, the opinion could signal how the court may rule, with wider implications for EU gaming regulation.
German individual suing for refunds on losses
One player in Germany who lost money on online slots and lottery-style betting before July 2021, when most forms of online gambling were still illegal under German law, is now suing to recover those losses, arguing the operator should never have accepted his bets in the first place.
The operator, licensed in Malta, challenged the claim and sought backing from Maltese courts, which then asked the ECJ to clarify how EU law applies. At the heart of the dispute is a tension between EU single-market rules, which promote cross-border services, and national powers to restrict gambling.
Crucially, the court also ruled that EU law does not block players from suing to recover losses incurred under illegal gambling regimes. That means national courts can order refunds if they find operators offered services unlawfully, even if those operators were licensed elsewhere in the EU.
The decision undercuts a key argument used by offshore-licensed operators that EU free movement rules shield them from liability across borders. It also confirms that Germany’s legalization of online gambling in 2021 does not retroactively legitimize earlier activity.
It could trigger a wave of similar claims, particularly in Germany, where thousands of players used offshore sites before regulation caught up.
Malta gambling industry reeling from verdict
Malta emerged as a leading iGaming hub after introducing landmark Remote Gaming Regulations in 2004, becoming the first European Union member to regulate online betting. iGaming amounts to approximately one tenth of the country’s annual GDP, according to recent data.
However, there is now serious concern among operators on the small island nation that its protectionist policies are coming under substantial legal strain.
The opinion from Emiliou had followed a preliminary ruling by the ECJ, earlier in the month, that asserted EU law allows countries to ban online gambling services from other member states, undercutting claims that Malta Gaming Authority-licensed operators are protected by EU free trade rules.
Writing on LinkedIn, Lawyer Linguist at the Court of Justice of the EU Dr. Jeanella Grech, claimed “the Maltese interpretation that a Maltese gaming license holder is entitled under this freedom to provide their services lawfully and freely across the EU has been consistently rejected by the ECJ.”
A final decision on the legitimacy of Bill 55 is likely to arrive at a later date, but until then, the iGaming sector in Malta appears to be on shifting sands.
