The European Court of Justice (ECJ) has dealt another blow to Malta’s defence of its gambling laws and licences from the challenges of EU member states.
An ECJ preliminary ruling was published earlier today regarding the dispute between German authorities and the Malta-headquartered divisions of Lottoland and Maltese authorities.
The ECJ concluded that EU law does not prevent member states from banning online services provided by other member states.
The ruling backs up Germany’s ban on online slot machines and betting on lottery outcomes, and states that players have a right to sue for losses incurred at companies which are unlicensed or were otherwise breaching EU law.
This decision relates to a long-running dispute between Maltese and German courts regarding the activities of Malta-based and licensed companies in other EU markets.
Original disputes saw Malta contest the judgement of German Courts, on the grounds that Malta Gaming Authority (MGA) licences had abided to the principle of terms of Treaty on the Functioning of the European Union (TFEU).
Under TFEU terms granted to “unrestricted services”, MGA licences believed that they could offer iGaming services, in light of Germany’s Bundslander (states) and Bundestag (federal government) being unable to settle on the terms of the new Interstate Gambling Regime.
Following more than a decade of arbitration and regulatory deadlock, Germany’s federal states enacted the Interstate Treaty on Gambling (GlüNeuRStV), effective 1 July 2021, finalising terms to regulate and licence online gambling.
DACH drama
The EU disputes chiefly relate to two Malta-based and licensed companies active in Germany and one active in Austria during the late 2010s and early 2020s. The disputes have been subject to ECJ opinions, but this is the first preliminary ruling – an official interpretation of EU law.
The two German-facing firms in question are Tipcio and Lottoland. The former faced a legal challenge from a former customer who attempted to claim back losses accrued between 2013-2020.
Tipico did not hold a licence during this time, though it had applied for one and subsequently secured one after the German market was re-regulated in 2021. In Lottoland’s case, a customer was attempting to claim back losses accrued between 2019-2021.
The ECJ preliminary ruling relates to the Lottoland case, but its impact will doubtless affect the legal disputes involving Tipico and Virtual Services Digital Limited – the latter being the firm involved in Austria-related litigation.
The court specifically determined that Article 56A of the TFEU “must be interpreted as not precluding national legislation which imposes a prohibition on the organisation of online casino games, in particular slot machines, and of forms of betting such as online betting on the results of lottery draws”.
This essentially means that the highest court of the EU has labelled Malta’s main legal argument around the activities of its licensed companies invalid.
Bill 55 at the bat?
Malta has been ringfencing its gambling industry via Bill 55, the colloquial name for a 2023 amendment to the country’s Gambling Act – Article 56A to be exact.
Under Bill 55, Maltese courts are able to reject orders against Maltese-based and licensed firms which are otherwise complying with Maltese law – but may not be complying with the laws of other EU member states where said companies are active.
The Maltese argument hinges on the principles of EU freedom of business and freedom of movement, based on Article 56 of the TFEU.
Maltese courts argue that EU freedom of trade underpins Bill 55 and the activities of its licensed gambling companies in countries like Germany.
So, does the ECJ ruling mean that these disputes are over? Highly unlikely.
The international legal spats between Maltese and other EU courts are long-running, and Bill 55 was developed for the explicit purpose of protecting gaming businesses from overseas court actions.
The ECJ has now issued two determinations in 2026 reinforcing the right of Member States such as Germany and Austria to prohibit cross-border gambling services and attach civil liability to breaches — further eroding Malta’s legal shielding under Bill 55.
Gambling accounts for around one-tenth of Malta’s GDP, and the island is seeing some budding challenges to its status as an international iGaming hub in the likes of Estonia and the UAE.
As an EU member state Malta can seek ‘public policy exceptions’ under the EU’s Brussels I Recast Regulation. The law relies on the mutual recognition and enforcement of judgments.
Citing this law, Malta asserts that foreign rulings which conflict with its regulated framework should not be enforced domestically. Malta argues that this exemption is applicable to its own online gambling regime.
Malta maintains that Bill 55 provides a necessary safeguard to protect its domestic courts from being overwhelmed by a wave of reflective litigation linked to online gambling disputes, many of which have been assigned by EU courts to third-party claims firms – a trend reflected in the current volume of cases.
As such Bill 55, in effect, codifies this position into national law.