The European Commission has formally launched infringement proceedings against Malta, alleging that the country is systematically obstructing the enforcement of European Union court judgments against its licensed gaming companies. This legal action, initiated with a letter of formal notice sent to Malta on June 17, 2025, accuses the Mediterranean nation of violating fundamental EU legal principles, particularly those related to jurisdiction and the recognition of judgments across member states under EU Regulation 1215/2012 (the Brussels I Recast Regulation).

At the heart of the dispute is Article 56A of Malta’s Gaming Act, popularly known as Bill 55, an amendment introduced in 2023. Critics argue that this legislation creates an impenetrable legal shield around the country’s online gambling sector, allowing Maltese courts to routinely refuse the recognition and enforcement of judgments issued by other EU member state courts against Maltese-licensed gaming companies, citing national public policy grounds. The Commission also believes that the legislation effectively discourages foreign litigants from pursuing legal action in Maltese courts against these entities, despite EU rules that would normally designate Malta as the appropriate jurisdiction based on the defendants’ domicile.

The European Commission stated that it “considers that the Maltese legislation, by effectively shielding the online gaming sector from cross-border litigation, undermines the principle of mutual trust in the administration of justice within the Union.” It added that this allegedly violates prohibitions on reviewing other member states’ judgments on their substance, exceeds the limits of public policy exceptions under EU law, and distorts the EU’s rules on jurisdiction. The legal action follows concerns raised by Austrian and German legal firms, who have been grouping gambling loss claims into lawsuits against Malta-licensed operators, some of which have resulted in foreign courts ordering these companies to refund player losses. This also follows two Maltese court decisions in February where courts ruled Austrian player claims unenforceable on the island, citing Article 56A.

Malta’s Response and Defence

Malta now has two months to formally respond to the Commission’s notice and address the concerns raised. Failure to provide a satisfactory response could result in the Commission escalating the matter by issuing a reasoned opinion, which could potentially lead to proceedings before the European Court of Justice (ECJ), ultimately culminating in a binding judgment. If Malta were then to still refuse to comply, financial penalties might be imposed.

Both the Malta Gaming Authority (MGA) and the Government of Malta have strongly rejected the allegations, maintaining that Article 56A does not impose a blanket ban on enforcing European judgments or shield companies from legal action in other EU courts. Instead, the MGA argues the provision merely codifies Malta’s long-standing public policy on online gaming matters and accurately reflects existing rules under EU law, specifically referencing the “ordre public” exception in the Brussels I Recast Regulation.

In a statement, the MGA affirmed, as reported by iGaming Times, that Malta “has consistently maintained the position that its gaming regulatory framework is in line with the principles established by the Court of Justice of the European Union.” The MGA also stated, as reported by iGaming Times, that “any unjustified restrictions - whether direct or indirect - on the freedom to provide services and the freedom of establishment within the EU internal market, run directly counter to the case law of the CJEU, and create a clear barrier to market access and trade within other Member States.” It further argued, as reported by iGaming Times, that “Allowing such restrictions ultimately hinders the proper functioning of the internal market and limits the ability of companies established in Malta and other Member States to offer their services freely.” The MGA highlighted that “For over 20 years, Malta has consistently challenged any unjustifiably restrictive approaches adopted, in line with Malta’s public policy in the online gaming sector.” Prime Minister Robert Abela has also defended Malta’s legal sovereignty in regulating its online gaming industry during diplomatic discussions.

Nationalist MEP Peter Agius, while welcoming the Commission’s move, has called for a more holistic response to the cross-border gaming dispute. He urged the Commission to also address third-party litigation funding groups, which he argued are driving collective legal actions against Malta-based operators and creating a “jungle” around these claims.

The formal infringement proceedings signify a deepening legal standoff between Malta and the EU over the interpretation of cross-border judgment enforcement in the online gambling sector. The outcome of this dispute could have significant implications for both Malta’s iGaming industry and the broader principles of mutual trust and legal harmonisation within the European Union.