Commission launches infringement proceedings over Malta's legal shielding of gaming companies

The European Commission has launched infringement proceedings against Malta regarding the legal protection of Malta-registered companies from judgements in other EU member states.

On Wednesday, the Commission sent Malta a formal notice of the infringement proceedings, "for failing to comply with its obligations under the Regulation on jurisdiction and the recognition and enforcement of judgments (Regulation (EU) 1215/2012) in the area of gambling."

The Commission stated that by imposing an obligation on courts to refuse the recognition and enforcement of judgements issued by EU states against gaming companies, Malta is now subject to infringement proceedings. "Additionally, Malta discourages foreign litigants from pursuing legal action in Maltese courts against these entities, despite EU rules designating such courts as the appropriate forum based on the defendant's domicile," the Commission added.

The Commission notes that Malta undermined the principle of mutual trust in the administration of justice within the EU.

Maltese government, Malta Gaming Authority respond 

In response, the Maltese government took note of the infringement proceedings, insisting that the legal amendment in question merely "codifies into law Malta’s long-standing public policy on online gaming matters."

"Malta remains fully committed to maintaining a constructive dialogue with the European Commission. The Government will provide a formal response to the Letter of Formal Notice within the stipulated two-month timeframe," government said.

In a separate statement, the Malta Gaming Authority (MGA) stressed that Article 56A, which is at the centre of the infringement procedures, "does not impose a blanket ban on enforcing European judgments against Maltese-licensed gaming companies, nor does it shield them from legal action in other EU courts."

The MGA noted that "unjustified restrictions" on the freedom to provide services in the internal market contradict EU case law as it limits the ability of companies established in Malta and other Member States to offer their services freely. "For over 20 years, Malta has consistently challenged any unjustifiably restrictive approaches adopted, in line with Malta’s public policy in the online gaming sector.    "

Malta's 2023 amendment to the Gaming Act

The proceedings centre around a 2023 amendment to Malta’s Gaming Act which granted a form of “immunity” from legal action that would “conflict with or undermine the legality of” Malta’s gaming services or obligations that arise from it.

In a landmark judgement later that year, Judge Toni Abela refused to enforce a garnishee order against Maltese gaming company, TSG Interactive Gaming Europe Limited, invoking the supremacy of Malta’s Constitution over EU law.

Following the judgement, MaltaToday looked at how the implications of the decree goes against Malta’s EU obligation to recognise and enforce the judgments of other EU courts in civil and commercial matters.