A Bill tabled in Parliament to amend Malta’s Gaming Act is “attempting to circumvent court orders in a blatant disregard for the independence of the judiciary” lawyers from Germany and Austria are claiming.

An Austrian law firm and a German lawyer have said that the government is “attempting to stop Maltese-licensed gaming companies from paying back the millions they have illegally appropriated from players” located in Germany and Austria.

The government meanwhile is insisting that all it is doing is giving gaming operators assurances against “unfounded” challenges in court.

The lawyers have already written to the European Commission over the proposed Bill, and accused Malta of undermining the rule of law through it.

The lawyers said in a letter some days ago that their clients are being awarded final and definitive judgements from the Austrian and German courts against Maltese gaming companies, whereby those companies are being ordered to pay all the money they deposit and lose on Maltese sites back to the clients.

This is because “they are offering these games illegally and making an unjustified enrichment over our clients,” the letter reads.

The Bill in question – Bill 55 – which went through its first reading in Parliament on 24 April, was described by the lawyers as “attempt by the Government of the Republic of Malta to blatantly undermine European Rule of Law by blocking the fundamental rights of EU Citizens and Residents.”

The letter accuses the government of wanting to introduce provisions in Maltese law which would prevent Maltese courts from enforcing sentences handed down against Maltese gaming companies in foreign jurisdictions.

Government Response

When alerted to these claims, the Ministry for the Economy, European Funds, and Lands told The Malta Independent that “the Government of Malta has long been committed to protect the status of the Malta Gaming sector and the Maltese licence.”

“The regulatory standards in Malta in this regard are second to none and respect the fundamental freedoms afforded to every individual and establishments in the European Union; including the freedom of establishment and the freedom to provide services.”

“In the absence of harmonisation of regulation of this service, the Government has given regulated operators the necessary assurance against unfounded challenges, as a matter of public order for the country. The Bill is solely intended to enshrine this approach in law,” it concluded.

Lawyers’ Response

With reference to the government’s response, the lawyers told The Malta Independent that the lack of harmonisation at EU level relates solely and exclusively to the manner in which the gaming licences are issued by each and every EU Member State.

“Each EU Member State has, as a result of this lack of harmonization, the right to legislate and impose the restrictions that it deems fit in the issuance of licenses and the offering of the same games of chance to its residents and citizens,” the statement read. 

“Whereas in Malta the provision of Online Gaming Services is completely liberal and there are absolutely no restrictions, in other EU Member States this is not the same.”

The lack of harmonization in the Online Gaming industry has absolutely nothing to do with the Recognition and Enforcement of Judgements within EU member states in terms of Brussels I Recast Regulation, the basic principle of which is to facilitate the recognition and enforcement of judgements between member states of the EU in relation to civil and commercial matters.

Malta, like all EU Member States, is bound by this Regulation which is supreme to the ordinary laws of the Country in Malta and in all EU Member States. Malta has no right to derogation in this respect, the lawyers argued.

“This simply in an attempt to stop Maltese-licensed gaming companies that are violating the laws of Austria and Germany and several other EU Member States, from paying back the millions they have illegally appropriated from the players insofar as they have offered their games of chance without having a license, and which the same gaming companies have been ordered to pay back to the players by the Independent and Supreme Courts of Austria, Germany and several other EU member states.”

The lawyers stated that the courts are able, in certain limited circumstances, to choose not to apply foreign judgments if this is deemed to be a matter of public policy, although the criterion of ‘public policy’ is to be interpreted very narrowly. In this regard, the Maltese government is interfering with the independence of the judiciary as it is the courts that have always determined what amounts to public policy for the purposes of deciding whether to allow the otherwise automatic recognition and enforcement of foreign judgements in Malta.

“With the proposed legislation the Ministry of Economy is literally attempting to circumvent court orders in a blatant disregard for the independence of the judiciary,” the statement read.

The lawyers concluded by calling on the European Commission to stop Malta from implementing the law and sanctioning it if it continues to be defiant as it has been in several other matters, and decides to forge ahead with this illegal legislation, like it did and continues to do with the sale of Maltese passports in violation of EU Law.”

The letter was signed by Austrian lawyer Karim Weber and German lawyer Benedikt Quarch.  Weber works for Austrian law firm G&L Legal, while Quarch himself was named as one of the Forbes 30 Under 30 in 2020.