Malta Matters, iGaming Capital Lays Down Law, Gears Up For Mighty EU Legal Tussle

With its location at the heart of the Mediterranean and role as iGaming capital of the world, tiny Malta, an island nation of three principal islands, population just under 520,000, matters.

Now, on the eve of the signature iGaming Next Valletta ‘23 summit, the mighty mouse has roared and effectively told the European Union to back off and stop infringing on Maltese sovereignty.

As the home, or principal office, of many hundreds of top iGaming firms and, it has to be admitted, certainly in the past, a base for a number of dodgy “operators”, Malta has gained a reputation as a site for corruption, financial irregularity and money laundering.

Following the international outcry over the assassination by car bomb of investigative journalist Daphne Caruana Galizia in 2017, Malta has embarked on a root and branch corruption clean-up.

The island nation, ostrascised by European anti-money laundering organisations following the reporter’s murder, was last year given a clean bill of health and is now back in the good fiscal fold.

But enough is enough, and Malta’s parliament has reaffirmed its legislative independence by approving Bill 55 Gaming Amendment Bill that will allow Maltese courts to refute the recognition–and enforcement–of foreign legal judgements relating to the island’s all-important iGaming sector.

Sponsored by the Hon. Silvia Schembri MP, Minister for the Economy and European Funds, the bill has now been approved by Maltese President George Vella and amends the country’s existing Gambling Act, which legislates and regulates the market.

Heavy-hitters

Malta has nearly 350 online gambling licence holders, among them heavy-hitters Betsson, Tipico, Betfair and LeoVegas, and a further 60-plus casinos and retail operators.

Gambling in all its manifestations employs around 10,000 people in the nation, contributing, by some calculations, around €1.5 billion (£1.28bn) to the economy.

But many EU nations, notably Austria and Germany, see Malta as the host of off-shore gambling sites that are illegal in their countries.

And they are trying to use EU law to close down these services.

But Malta is hitting back and–quite rightly–arguing that the free movement of goods and services is a foundational pillar of the very European Union itself.

The updated Maltese gambling law now most specifically prevents enforcement actions against the Malta Gambling Authority if they “conflict with” or “undermine” the provision of gaming services in Malta.

Enforcement measures, moreover, cannot be taken if the targeted, Malta-based operator is conducting activity lawful under the Gambling Act.

European regulators have already written to the EU Commission challenging the provisions of Bill 55.

They argue that Bill 55 creates a legal loophole, which permits “unlicensed” iGaming operators to violate their national gambling laws.

What’s not contested is that the Mother of all battles is brewing.

The Mighty Maltese Mouse has roared. Now can it spring the EU iGaming trap?