iGaming Law
The curious case of Bill 55
A snapshot of the controversies around the recent amendment to Malta’s Gaming Act
On 21st June 2023, the Maltese Parliament approved amendments to the Gaming Act (CAP. 583) (hereinafter referred to as “the Act”) which were submitted to Parliament on the 24h April 2023, through Bill 55. The objective of Bill 55 is ostensibly to legally enshrine Malta’s long-standing public policy principle of preserving the framework for remote gaming operations, a policy that has been implemented since the early 2000s when the first Malta remote gaming licences were issued.
By virtue of this Bill, Article 56A has been introduced to the Gaming Act, which reads as follows:
56A. Notwithstanding any provision of the Code of Organization and Civil Procedure or of any other law, as a principle of public policy:
a) no action shall lie against a licence holder and, or current and, or former officers and, or key persons of a licence holder for matters relating to the provision of a gaming service, or against a player for the receipt of such gaming service, if such action:
- conflicts with or undermines the legality of the provision of gaming services in or from Malta by virtue of a licence issued by the Authority, or the legality of any legal or natural obligation resulting from the provision of such gaming services; and
- relates to an authorised activity which is lawful in terms of the Act and other applicable regulatory instruments.
b) The Court shall refuse recognition and, or enforcement in Malta of any foreign judgment and, or decision given upon an action of the type mentioned in sub article (a).
The scope of the amendment is very limited, applying only in circumstances where a lawsuit (instituted by an operator against a player, or by a player against an operator) results in a judgement that seeks to challenge the legality of the gaming services provision and relates to an activity that the licensee has the right to provide by way of its licence. In practical terms, if a licensee were to be sued for providing services in a country other than Malta, a judgement issued by the courts in the player’s jurisdiction declaring such activity illegal would not be enforced in Malta.
This legislative instrument has attracted significant criticism from some quarters, alleging that the Maltese government is adopting this mechanism to protecting its igaming sector from accountability within the European Union, undermining principles of EU laws and treaties.
The Malta Gaming Authority, the Maltese regulator responsible for the licensing and oversight of gambling, has defended its position on the basis that the newly introduced provisions are “accurate and transparent” and are fully compliant with EU legislation permitting the freedom to provide business services as one of the central principles of the European constitution.
Bill 55 is accessible here.
Interestingly, the key operative limb of the newly introduced provisions revolves around the “legality of the provision of gaming services” and “authorised activity which is lawful”. Therefore the key consideration for the invocation of these new provisions will very much depend on the interpretation of what constitutes lawful gaming activity. Enter the Macolin Convention, a convention promoted by the Council of Europe targeted at addressing the Manipulation of Sports Competitions. The principle objective of the Macolin Convention is to bring national public authorities to co-operate with sports organisations, betting operators and competition organisers to prevent, detect and sanction the manipulation of sports competitions, proposing a common legal framework for an efficient international cooperation to address this global threat to sports.
Whilst Malta has supported the Macolin Convention, taking positive action to enact the “Prevention of Corruption in Sports Act”, in 2018, the key bone of contention for Malta to ratify the convention has been the absence of a definition as to what constitutes “illegal sports betting”. Indeed, whilst the 2018 law introduces the entire content of the Macolin Convention into Maltese law, Malta’s reluctance to ratify the Convention continues to be focused on the potentially adverse effects that the absence of such a definition could have on the entire regulated sports gambling industry operated from Malta, stemming from legal wranglings about what constitutes legal and illegal sports betting .
The MGA has stated that Malta’s issues are not with the scope of the Convention, but rather with sections that distract from, and fall outside of, this scope.
Recent media reports have suggested that Malta is currently reflecting the ratification of the Macolin Convention, meaning that any Malta licensed sports betting operators offering their services to jurisdictions where such services are prohibited could be deemed illegal by virtue of the new definition, potentially creating more strain on the applicability of the newly introduced Article 56A of the Gaming Act. These developments are certain to attract further interest and discussion from within the industry, as well as within regulatory circles across the continent.