The new regulation was implemented in response to several cases in which players from countries such as Germany, Austria, and the Netherlands sued operators over their past or ongoing activities in the European grey market.
Malta's grey-market gaming system may be significantly impacted by the Court of Justice of the European Union's (CJEU) ruling that players can rely on the laws of their home country when pursuing claims against operators who do not hold a local license.
#What the CJEU’s Latest Decision Means for Malta’s Gaming Industry
The CJEU asserts that, in most cases, the law of the nation where the damage occurred applies. This rule is applicable when players try to hold directors accountable for breaking national laws that forbid providing gambling services without a license. The court clarified that if a player loses money while playing online gambling with a business that is not licensed to operate in an EU member state, the loss is deemed to have occurred in the player's home country.
Malta's offshore gaming industry may be significantly impacted in the long run by the decision. At the moment, operators in Malta are shielded from responsibility resulting from operations licensed by the Malta Gaming Authority (MGA) by local legislation commonly known as Bill 55.
#What Triggered This Legislative Move?
The new regulation follows a series of cases where operators were sued by participants from nations like Germany, Austria, and the Netherlands for previous or current involvement in the European grey market. The new law was adopted based on a precedent set by a specific Austrian case.
In order to recoup his gambling losses, the client of Titanium Brace Marketing, a Maltese operator and a currently liquidated subsidiary of SkillOnNet, filed a lawsuit against the company's two directors in Austrian courts. The court found that Titanium was operating under Malta's offshore gaming system because it had a gambling license in Malta but not in Austria.
However, because Titanium had provided unlawful gaming in Austria, the client contended that the gambling contract was illegal and that the two directors had to be held personally accountable under Austrian law.
The directors argued that the harm happened in Malta and that the Austrian courts lacked jurisdiction. Additionally, they contended that Maltese law, which exempts company directors from personal liability for creditors, ought to be applied.
The intricate case set a precedent for the recent ruling by the CJEU, which is currently being challenged in European courts by states that disagree with it. The precedent and the new rule that followed, however, would encourage more players to file lawsuits to recoup losses related to illicit gambling in their home countries.
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