ECJ Upholds Germany’s Position Against Maltese Gambling Operators

(AsiaGameHub) –   A preliminary judgment supports the German regulator’s position that European Union law does not preclude it from prohibiting gambling operators licensed in Malta.

Luxembourg.- The European Court of Justice (ECJ) has delivered a further opinion that opposes Malta’s efforts to shield its igaming companies from legal action in other EU member nations. A preliminary ruling concerning German regulators, Maltese authorities, and the Malta-based branches of Lottoland indicates that EU law does not stop individual member states from banning online gambling services that originate from other parts of the Union.

This verdict contradicts Malta’s contention that such bans violate the EU principle of the free movement of services. It strengthens Germany’s limitations on online gambling and bolsters the arguments of consumers pursuing compensation for losses sustained while using unlicensed operators that lacked the necessary authorization.

While the ECJ ruling specifically addresses the Lottoland case, it carries potential consequences for other active legal disputes, such as those involving Tipico in Germany and Virtual Services Digital Limited in Austria. The Lottoland litigation was initiated by a player requesting a refund for losses suffered between 2019 and 2021, the period during which Germany commenced the regulation of online gambling.

The court specified that Article 56A of the Treaty on the Functioning of the European Union does not prohibit national laws from outlawing online casino games, slot machines, or lottery betting, effectively nullifying Malta’s primary legal defense.

Nevertheless, these conflicts remain unresolved. In 2023, Malta updated its Gambling Act via Bill 55, enabling Maltese courts to reject foreign judgments against operators based in Malta, as long as those companies adhere to Maltese law, regardless of whether they violate regulations in other EU jurisdictions.

Malta maintains that this amendment is based on the EU principles of the free movement of services and trade. Furthermore, it cites the Brussels I Recast Regulation, which oversees the mutual recognition of legal judgments, asserting that foreign rulings that clash with its internal legal framework should not be executed locally.