The controversial Maltese Bill No. 55 has been making waves in the iGaming community for a while now. Lawmakers have approved the law just a couple of weeks ago after Malta’s president signed it in early June. It has sparked a lot of controversies as it allows Maltese courts to refuse to recognize any foreign judgments related to MGA-licenced operators in the European Union.

Many of Malta’s largest online gambling operators offer online gambling on the European market. Thanks to the MGA licence, they can offer their services throughout Europe. However, the new law, although seen as a positive within Malta, has raised some eyebrows across Europe.

What is Bill No. 55?

Bill No. 55 is a new law in Malta’s legislation that protects the country’s online gaming businesses from foreign liability. It was tabled on April 24 and signed into law by president George Vella in early June. It comes at a fragile time in the European online gambling market, after some businesses are facing scrutiny over their Austrian operations.

The new law has had negative feedback across Europe. Many experts and iGaming business CEOs think that it goes against European online gambling laws. The European Union is pushing for safe and fair regulations when it comes to iGaming, and the Bill No. 55 is widely seen as going against it. With the new law, online gambling businesses licenced by the Malta Gaming Authority won’t be legally obligated to cover losses to customers, as Maltese courts can refuse judgment on any wrongdoing on foreign soil.

Per the bill, courts can now ‘refuse recognition or enforcement’ of any foreign judgment in relation to MGA-licenced casino sites. The legislation states that its objective is to support Malta’s long-standing policy to encourage establishment of gaming operators in the country. Malta’s lawmakers have defended the new law, stating that it supports private enterprises in line with the country’s Constitution.

Heavy criticism from European countries

Numerous countries in the EU have already criticized the new law. German and Austrian lawyers have already said it’s an attempt to undermine and circumvent ongoing lawsuits in the region. Lawyers Benedikt Quarch and Karim Weber have sent a letter to the European Commission, explaining how the law directly interferes with the EU’s online gaming legislation.

The lawyers represent clients who have been trying to recoup their losses after paying back customers for violation of local laws. Weber worked on the highly publicized Austrian Supreme Court case against PokerStars. In his opinion, Malta has no right to interfere with independent arms of the judiciaries. The lawyers have urged the Commission to intervene in the matter, but there’s been no response so far.

Operators facing liability for their Austrian operations

In late 2021, the Austrian Supreme Court ruled that PokerStars and all Flutter-owned entertainment companies are not licenced to operate in the country. As such, all contracts between these companies and Austrian consumers were void. The case concerned the validity of the gaming monopoly by Casinos Austria. It came after a player—represented by the Leinsmer Weber law firm—sued PokerStars for their losses.