Malta is standing by its iGaming regulatory model following the European Commission’s decision to initiate infringement proceedings over Article 56A of its Gaming Act – formerly known as Bill 55 – that limits the enforcement of certain foreign court judgements against Malta-licensed gaming operators.

The dispute centres on claims brought by Austrian and German law firms targeting Malta-based companies, which are accused of operating illegally within those jurisdictions. These firms have been bundling gambling loss claims into lawsuits against operators regulated by the Malta Gaming Authority (MGA).

In response, Malta argues that its point-of-supply licensing model – whereby operators are regulated in the jurisdiction from which the service is provided – is consistent with EU law.

In its reaction to the Commission’s Letter of Formal Notice, the MGA rejected the notion that Article 56A offers blanket protection for Malta-licensed companies.

“Article 56A does not impose a blanket ban on enforcing European judgments against Maltese-licensed gaming companies, nor does it shield them from legal action in other EU courts,” the Authority stated.

It explained that the law reflects existing EU provisions – specifically the ordre public exception within the Brussels I Recast Regulation (EU 1215/2012) – and simply codifies Malta’s long-standing public policy stance on online gaming.

“As a Member State operating within the framework of EU law, Malta has consistently maintained the position that its gaming regulatory framework is in line with the principles established by the Court of Justice of the European Union (CJEU) and the fundamental freedoms enshrined in the Treaty on the Functioning of the European Union (TFEU), specifically the freedom to provide services and the freedom of establishment,” said the MGA.

“Malta’s public policy in the gaming sector is shaped by, and grounded in, these same principles. In fact, Malta has consistently held that any unjustified restrictions – whether direct or indirect – on the freedom to provide services and the freedom of establishment within the EU internal market, run directly counter to the case law of the CJEU, and create a clear barrier to market access and trade within other Member States.

“Allowing such restrictions ultimately hinders the proper functioning of the internal market and limits the ability of companies established in Malta and other Member States to offer their services freely. For over 20 years, Malta has consistently challenged any unjustifiably restrictive approaches adopted, in line with Malta’s public policy in the online gaming sector.”

The Maltese Government echoed this position, insisting that the law does not introduce new grounds for rejecting the enforcement of judgments from other EU Member States.

“Rather, it codifies into law Malta’s long-standing public policy on online gaming matters,” the Government said. It confirmed that a formal reply to the Commission would be submitted within the required two-month timeframe and reaffirmed its commitment to maintaining open and constructive dialogue.

Despite the scrutiny, both the MGA and the Maltese Government maintain that Malta’s regulatory framework remains legally sound and fully aligned with EU principles – especially in its treatment of cross-border services in the digital economy.

Image: European Commission building / Pexels