Malta’s Bill 55 incompatible with EU law, says CJEU Advocate General
An Advocate General of the Court of Justice of the European Union (CJEU), Cypriot diplomat Nicholas Emiliou, issued his opinion and observations regarding Case C-683/24, Spielerschutz Sigma. This case concerns an Austrian court’s request for a preliminary ruling about a provision of the Maltese Gaming Act. He also discussed aspects of Malta’s Bill 55 and how it interacts with EU laws.
According to the Advocate General, the Austrian court’s request has been deemed inadmissible. His provided reasoning is due to an answer to the questions referred not being necessary for the resolution of the dispute pending before the Austrian court. However, he also expressed that Article 56A of the Maltese Gaming Act is not compatible with EU law.
Article 56A (Bill 55)
Implemented in 2023 as part of Bill 55, Article 56A dictates that Maltese courts must refuse to recognise and/or enforce in Malta any foreign judgment which, in essence, upholds a claim against a Maltese-licensed gaming operator based on the illegality of the services provided by that operator in a Member State, where those services were lawful under Maltese law.
In a press release issued by the CJEU’s Communications Directorate, it was stated that the central issue, as deemed by Emiliou in regard to Case C-683/24, is not whether Article 56A is compatible with EU law, but rather whether the legal adviser’s assessment was diligent at the time it was made.
It said that the assessment is governed by national law and typically involves a comparison with the conduct expected by a reasonable, prudent, and well-informed legal professional. It added that what matters is not whether the opinion proves to be correct, but whether it was reasonably defensible in light of the legal framework and the information available at the time.
Such an assessment, it stated, falls outside the scope of the CJEU’s jurisdiction for preliminary rulings. It added that the CJEU may interpret EU law, but that it cannot determine whether a legal opinion was plausible or sufficiently diligent.
The CJEU’s Communications Directorate continued that the underlying case in Austria centres on whether the legal advice provided was diligent and reasonable at the time it was given. This means that the case is fundamentally not concerning whether Article 56A complies with EU law.
Article 56A deemed incompatible with EU law
Emiliou said that a national measure such as Article 56A is “manifestly incompatible” with EU law, specifically the Brussels I bis Regulation. The Communications Directorate said that under this regulation, “Judgements delivered by the courts of the Member States upholding players’ claims for restitution against Maltese online gaming operators are, as a matter of fact, to be recognised and enforced in all Member States, including Malta.”
The Advocate General said that Malta cannot use the public policy clause to refuse to recognise judgments made by foreign courts solely due to the belief that EU law has been incorrectly applied in the judgment.
Emiliou commented that Article 56A “evidently rests on a particularly expansive interpretation” of the freedom to provide services. He added that the interpretation that a Maltese licence allows operators to provide their services freely and lawfully throughout the EU as long as they comply with Maltese law has been “consistently rejected” by the CJEU.
He added that the ‘country of origin’ principle does not apply in the field of online gambling, and continued that Member States are not obligated to recognise gambling licences issued by other Member States, though they can choose to recognise them.
The Communications Directorate summarised that other Member States are therefore entitled to apply their respective gambling laws to operators licensed in Malta.
Ongoing disputes
Although Advocate General Emiliou’s opinion is not binding on the CJEU, it forms an additional observation and interpretation concerning ongoing regulatory disputes with regard to Malta’s iGaming framework and how it interacts with other EU Member States’ laws.
Austria’s Supreme Court has recently ruled that company directors may be held liable for losses in online gambling disputes if breaches of tort law are established.
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