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MGA Responds to GGL’s Statement Over Controversial Amendment

In a recent address against allegations claiming that the controversial Bill 55 violates the European Gambling Law, the Malta Gaming Authority (MGA) has clarified that the bill has only been introduced primarily to protect Malta-based gambling operators from legal proceedings and that the process will be carried on without any violation. However, the German Gambling Authority, Gemeinsamen Glücksspielbehörde der Länder, is the latest entity to put the amendment back under the microscope, saying that such a law should not comply with the European policy.

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MGA has responded to GGL’s concerns over Bill 55.

Malta is one of the most extensive and competitive regulated gambling jurisdictions worldwide. Operators and iGaming solution providers from around the globe want to get their hands on product certifications from the MGA and then commence their expansion across Europe. The competition and concentration of iGaming operators in Malta are so high that the country has become the global leader in that segment and houses about ten percent of the total online gambling operators active worldwide. The thriving gambling industry of Malta is home to over 300 iGaming companies, with a majority of them offering the best platforms for their players. Many renowned brands like Bet365, Betsson, Entain, Kindred, LeoVegas, Paddy Power, Tipico, and more have established or moved their operations to Malta to operate in a market where regulation may be strict, but the benefits are plenty compared to other regulated jurisdictions of Europe. The Maltese jurisdiction is the place to be for operators seeking an immediate boost in their credibility and reputation in the international gambling market.

The gambling market in Malta offers an efficient and stable regulatory environment designed in an operator-centric manner. Since the legislation favors licensed gambling operators, they do not have to tweak or eradicate their offers, which could be illegal in multiple regulated jurisdictions. In addition, Malta’s taxation is also beneficial for the iGaming operators while complying with the Organisation for Economic Co-operation and Development (OECD) standards, maintaining constant compliance with the European Gambling Laws. This taxation directive allows operators to retain a hefty chunk of their profits. This is another aspect that attracts the masses to Malta. However, in a recent development this month, a controversial amendment to the Gambling Law of Malta has been questioned by a few other European gambling regulators who believe that the modifications should not comply with the continent’s code. The controversial Bill 55 has raised many questions, and the latest entity to ask the same query is the German Gambling Authority.

As the online casino and sports betting markets in Malta are projected to grow by over seven percent over the next five years, resulting in a market volume of $16.73 million after five years, the MGA is spending time justifying Bill 55, claiming that there is no reason for it to violate any regulation. The amendment has made another operator-centric change, providing legal protection for iGaming operators based in Malta and operating in multiple regulated jurisdictions under specific circumstances. All Malta-licensed iGaming operators are eligible for this protection. The amendment also enables the courts in Malta to refuse recognition of legal enforcement and notices that are filed against any MGA-licensed operator if it meets the preset criteria. The Parliament of Malta cleared Bill 55 in June this year, two months after its proposal. However, the Gemeinsamen Glücksspielbehörde der Länder (GGL) is concerned regarding the operator-centric approach in this amendment. Regulators support directives that favor players more than the operators to maintain player safety standards.

What the GGL says

As soon as the Maltese Parliament approved Bill 55, GGL was the first regulator to voice its concern over the matter. Since June this year, Germany’s first central gambling regulator has not approved Malta’s decision for its domestic operators. There are several Malta-based operators present in Germany under a GGL-issued permit. It will be interesting to see how one of the strictest regulators in the world reacts next. As of now, it has released an official statement expressing concern over the situation.

“The GGL has the developments around the topic ‘Bill No. 55’ from Malta in view. We are of the opinion that this law is unlikely to be compatible with European requirements for the recognition of decisions (Regulation (EU) 1215/2012). However, the final assessment of this question is not the responsibility of the GGL. We have informed the federal states about our assessment and are also in contact with the relevant authorities.”

“We currently see no reason to take any further action, as the Federal Ministry of Justice has already approached the European Commission about this matter. We, therefore, assume that proceedings will be initiated accordingly. The protective shield intended by Malta relates exclusively to civil law claims of players, which the GGL is not responsible for enforcing. To what extent the reliance of a gambling provider on “Bill No. 55″ in civil law cases can also affect reliability under gaming law remains a question of the respective individual case.”

MGA’s immediate response

The MGA did not shy away from the matter and released an official statement to respond to the allegations and concerns raised by the GGL. The purpose of the Maltese regulator’s statement was to shed more light on the subject and maintain transparency about Bill 55. In the release, the MGA stated the nation’s intention.

“It is important to note that the Maltese law does not create additional or separate grounds for refusing to recognize or enforce judgments to those already established under EU regulations (Regulation (EU) 1215/2012). It is simply an interpretation of the order public grounds for refusal envisaged in said EU regulation. Moreover, the scope of the amendments enacted into law is highly restricted, and the law does not preclude any action whatsoever from being taken against a licensee. Therefore, not every judgment relating to the operations of gaming operators with a Maltese license would be in violation of Maltese public policy.”

“Article 56A sets out cumulative elements that must first be fulfilled before it can be triggered. The provisions shall only be applicable when the action – taken by an operator against a player or a player against an operator – conflicts with or undermines the legality of the Maltese framework and is related to an activity that is lawful in terms of the Gaming Act and the other regulatory instruments applicable to the Malta Gaming Authority’s licensees. The Maltese gaming framework, in turn, is in full conformity with EU law and is based on the freedoms afforded to an entity established within the internal market.”

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Author: James Richardson