Ruling reverberates
A new ruling by the Court of Justice of the European Union (CJEU) poses a potential threat to Malta’s iGaming industry.
major implications for Malta’s grey-market gambling framework”
Industry insiders on Thursday warned of “major implications for Malta’s grey-market gambling framework” after the CJEU ruled that players filing suits against operators lacking local licenses are lawfully covered by their country of residence.
According to reports, the ruling applies to cases in which gambling firm directors are sued by players for breaking national laws that prohibit such firms operating without licenses.
The CJEU stated if a player loses money to an unlicensed online gambling firm operating in an EU member state, it will be treated as occurring in the player’s place of residence.
Austria precedent
The news follows multiple cases where players from Germany, the Netherlands, and Austria have sued gambling firm operators to recover their gambling losses.
In the latter country, an Austrian sued two directors of a currently-in-liquidation subsidiary of Maltese B2B gaming provider SkillOnNet, and reportedly set the precedent for the adoption of the new law.
According to the CJEU court, SkillOnNet subsidiary Titanium held a gambling license in Malta but not in Austria. The player argued that the two directors should be personally liable under the laws of Austria, because Titanium had unlawfully offered gambling in that country.
The two executives contended that the Austrian courts lacked jurisdiction because the harm allegedly occurred in Malta, and that Maltese law should apply, “which does not impose personal liability on company directors for creditors.”
the damage occurred where the player resides
The CJEU’s ruling, however, that the damage occurred where the player resides, meant in this case Austrian law and courts have jurisdiction and the man, who is seeking to recover around €18,500 ($21,000) from Titanium, may sue for damages under Austrian law.
Challenges
While the EU court’s ruling opens the door to hundreds of similar suits, it is currently facing legal challenges at the European level from other iGaming hubs that disagree with the decision.
Maltese business media also cited the Malta Gaming Authority (MGA) as describing the CJEU’s ruling as “definitely impactful” but “neither groundbreaking nor unexpected.”
According to the MGA, the judgment does not eliminate legal defences, such as Malta’s Bill 55, which instructs Maltese courts not “to recognise or enforce foreign judgments that would undermine a Maltese gambling license.”
