A DEEPER DIVE INTO THE STANDOFF WITH THE EUROPEAN COMMISSION
IGA Group has previously explored the complexities of Malta’s Article 56A. This article provides a further update and expanded analysis of the ongoing dispute.
Malta’s defence of its Article 56A amendment, also known as Bill 55, continues to generate controversy with the European Commission (EC). However, local lawyers firmly believe Malta has a strong case. This highly intricate disagreement centres on Malta’s interpretation of European law and legal experts suggest the prominent gambling hub could well succeed in disputing the EC’s formal warning, issued in June.
Gaming lawyers from Malta-based firms, including GTG Legal and financial services provider CSB Group, argue the EC may be exceeding its authority. Dr Terrence Cassar, a partner at GTG Legal, noted, “This is increasingly becoming more of a philosophical matter than a legal matter.” He elaborated that the Treaty on the Functioning of the European Union (TFEU) has a very specific scope and gambling has historically been intentionally excluded from the EU’s remit.
The Genesis of the Conflict: Article 56A
The crux of the dispute lies in Article 56A, an amendment introduced to Malta’s Gaming Act in 2023. This legislation aims to shield locally licensed operators from legal actions initiated by other European jurisdictions. Malta interprets the TFEU as providing for the free provision of services—such as online gambling—across EU member states, operating under a “point-of-supply” licensing model. Article 56A further strengthens this stance by allowing Maltese courts to refuse the enforcement of foreign judgments that clash with the legality of gambling services offered from Malta, leveraging the “public policy” exception outlined in the Brussels I bis Regulation.
The EC’s formal warning in June insisted that Malta must adhere to EU law and address its failure to acknowledge court judgments against Malta licence holders. A notable instance of this involves Malta’s refusal to enforce Austrian court judgments that ordered refunds to players who had gambled on sites not licensed locally in Austria. A Maltese Civil Court determined these Austrian judgments were contrary to Maltese public policy. The EC views Malta’s legislation as undermining the principle of mutual trust in the administration of justice across the Union.
Malta’s Robust Defence
Malta and its gambling regulator have steadfastly defended their position on the TFEU, asserting that Article 56A is a legitimate addition to its national laws. Dr Cassar clarified that Malta has no issue with locally regulated markets, provided they comply with Maltese gaming law. “Malta has had online gambling regulation since 2004, and with Article 56A, it was putting into writing what it always believed,” said Cassar. He added that a local licensing framework should only be imposed by a member state as an exception to the EU’s freedom to provide services, typically based on public health concerns.
The Maltese government does not dispute that operators must comply with local gambling laws throughout Europe. However, it argues that its own licensing laws could effectively override the laws of other countries in contentious matters. “Malta is saying it won’t recognise judgments from other countries because it goes against Malta’s public policy, and where the view would be that the other country’s regime is not compliant with EU law,” Cassar explained. “The fact that a licence is needed in a foreign country does not necessarily translate to that licence being legal in an EU context. It boils down to whether the laws of that particular country are justifiable from an EU point of view or not.”
Kyle Scerri, senior legal manager for commercial and financial services provider CSB Group, supports this view, stating Article 56A does not contradict EU law. The Malta Gaming Authority’s protection of the amendment “codifies into law Malta’s long-standing public policy on gaming matters.” He emphasised that EU law itself permits the refusal of recognition for a judgment if such recognition “is manifestly contrary to public policy” in the European Member state concerned.
The Road Ahead
If Malta fails to adequately respond to the EC’s June letter within two months, the case could be referred to the European Court of Justice (ECJ), potentially leading to a prolonged legal battle. This process, however, could be accelerated by an existing ECJ case (C-77/24) that is examining Malta’s stance concerning player loss cases in Germany and Austria. An update on this case is anticipated on Thursday, July 17, 2025. Its ruling, particularly regarding Article 45 of the TFEU, could directly influence Malta’s Article 56A.
Legal experts, including Dr Cassar, predict a final outcome could take at least two or three years. The ECJ’s ruling in the pending case could significantly impact Malta’s argument, especially if the court aligns with the EU’s interpretation of freedom of movement trade laws.
For more background on this developing story, please refer to our previous article: Malta’s Article 56A.
