Fears that the door could be opened for an influx of players seeking to reclaim losses from Maltese operators have been intensified following the latest ruling from the Court of Justice of the European Union (CJEU).
The CJEU has aligned with the view that contracts between players residing in Germany and operators that aren’t licensed in the country are essentially void.
Long-standing legal conflicts between Malta and the member states of Germany and Austria over a myriad of compensation claims has escalated over the past decade, requiring the determination of the Attorney General of the CJEU.
In a preliminary ruling requested by the First Hall of the Civic Court in Malta, the EU court outlined that players could be entitled to claim back losses from operators not licensed in the country. The European Court deemed that Article 56 TFEU – an EU law concerning restrictions on the provision of unrestricted services – does not supersede national laws related to online gambling disputes.
The latest ruling will be a setback for Malta’s legislative framework, as it continues to face cases levelled against operators around compensation of former customers of unlicensed operators.
At the time of the activities in Germany, different regulatory frameworks in the country were yet to be determined by the Bundestag, the federal government of Germany. It has since shifted as a result of the Glücksspielneuregulierungsstaatsvertrag (GlüNeuRStV), the regulatory framework for online gambling launched in July 2021.
However, the preliminary EU ruling stated that a change in attitude towards the gambling sector by German lawmakers did not invalidate the previous prohibition in place when the wagering occurred.
That being said, the ruling of the CJEU is somewhat unsurprising and continues the momentum away from Malta, with a previous determination by Advocate General (AG) Nicholas Emiliou of Cyprus detailing that: “A sports betting operator which offers services on a national market without possessing the required licence may be obliged to refund the stakes collected from players.”
This was in relation to a long-standing German dispute challenging Tipico Malta’s online gambling licence on the recovery of losses for the period between 2013 and 2020.
Malta is yet to enact Bill 55 in the specific case ruled upon by the CJEU, which involved Lottoland and two players from Germany.
That being said, Malta could still lean on the law as a shield from EU regulations and domestic frameworks in EU markets.
Whether this will provide an efficient shield for the Maltese operators remain to be seen, however, with significant developments from the latest EU ruling stating that Article 56A of the TFEU ‘must be interpreted as not precluding national legislation which imposes a prohibition on the organisation of online casino games, in particular slot machines, and of forms of betting such as online betting on the results of lottery draws”.
The German regulator, the GGL has been one of the most vocal critics of the ringfencing of Maltese operators from European law.
The GGL has pursued the case with the European Commission that the bill needs to be reassessed, along with its alignment with EU frameworks.
Previously, the GGL has stated: “We are of the opinion that this law should not be compatible with European requirements for the recognition of decisions (Regulation (EU) 1215/2002).
“However, the final assessment of this question is not the responsibility of the GGL. We have informed the federal states of our assessment and are otherwise in contact with the relevant authorities.”
