Advocate General of the CJEU pressures Malta: Bill 55 ruled incompatible with EU law

(AsiaGameHub) –   Nicholas Emiliou, a Cypriot diplomat serving as Advocate General (AG) of the Court of Justice of the European Union (CJEU), has issued what amounts to another EU legal position opposing Malta’s Bill 55.

Delivering his second opinion on a Bill 55-related case in the span of two months, Emiliou primarily referenced a request from an Austrian court for a preliminary ruling to assess if the provision of the Maltese Gambling Act known as Bill 55 aligns with EU law.

In response to this submission, Emiliou ruled that the Austrian court’s request is inadmissible.

The court’s request is tied to one of multiple ongoing legal disputes across Austrian and German courts, which are examining restitution claims from players who lost money to Malta-based, Maltese-licensed operators that either lacked licences in Austria or Germany at the time of the transactions, or still do not hold valid licences in those countries.

Even so, Emiliou did not hold back in his criticism of Bill 55, the common name for Article 56A of Malta’s Gambling Act. Passed into law in 2023, Bill 55 is largely designed to shield betting and gaming firms holding Maltese licences from court judgments issued outside of Malta.

Emiliou declared that national measures like Bill 55 are “manifestly incompatible with the rules governing the recognition and enforcement of judgments” from Brussels.

He added that rulings concerning player restrictions against Maltese online gambling operators, issued by any EU member state, must be “recognised and enforced in all other member states, including Malta”.

Opinions from ECJ Advocates General are not legally binding, and are only intended to provide guidance for ongoing legal debates and proceedings. Even so, they can carry significant weight independently, particularly given the high number of ongoing legal disputes between Maltese courts and those of other EU member states at present.

Thomas Bugeja, Partner at Fenech & Fenech Advocates, a Valetta-headquartered law firm, wrote on LinkedIn that “these observations will no doubt form part of the wider legal debate around Article 56A”.

Malta left on the defensive

When considering the wider context, the outlook is unfavorable for Malta’s protectionist policies for its gambling market, which was dealt a major blow just last week.

On 16 April, a preliminary ECJ ruling – which, unlike an AG opinion, is legally binding – stated that EU law does not bar member states from banning online gambling services operated by entities based in other member states.

This ruling undermined the argument put forward by Maltese legal authorities that the operations of Malta Gambling Authority (MGA) licence-holding companies in other EU nations were protected under the EU’s freedom of trade standards.

Reinforcing this point in his statement yesterday, AG Emiliou asserted that “other member states are entitled to apply their respective gambling laws to operators licensed in Malta”.

He added that “situations are bound to arise in which the services provided by a gaming operator holding a Maltese licence are unlawful in a Member State while being lawful under Maltese law”.

Commenting on LinkedIn, Dr. Jeanella Grech, a Lawyer Linguist at the CJEU, summarised Emiliou’s opinion as being “that there is no mutual recognition of gaming licenses in EU law and, hence, a Maltese gaming license is in principle valid only in Malta”.

Malta’s iGaming sector is of enormous economic importance to the Mediterranean island nation. The online gaming industry, regulated by the MGA, makes up roughly one-tenth of the country’s annual GDP.

Two core factors have underpinned the sector’s success: the country’s 5% tax rate for iGaming firms, and the long-held belief that an MGA licence and the regulatory standards it represents allow holders to operate internationally, both within the EU and in other global markets.

Legal challenges from Austria and Germany, combined with recent CJEU rulings and AG opinions, are calling this long-held belief into question, and could ultimately threaten Malta’s status as one of the world’s leading iGaming hubs.