Government U-turn on Malta-licensed gambling companies due to pressure

The Malta Gaming Authority is seeking legal advice on the consequences of signing an agreement it has shunned since 2014 that would see the country adopting a new definition for illegal sports betting.

If signed, the Macolin Convention would mean sports betting websites offering their services from Malta to jurisdictions where it is outlawed would be considered ‘illegal’ under the new definition. This is a U-turn from the position adopted by the government through a new law in recent months.

The change in stance shows through a direct order contract for €22,750 from the Malta Gaming Authority to legal firm Van Bael & Bellis for the “Provision of legal expertise on the effects of Malta’s prospective signature (and ratification) of the Macolin Convention” issued on 5 March.

Currently, sports betting websites licensed with the Malta Gaming Authority are under no obligation to prevent players from countries in which gambling is illegal from making use of their websites, choosing instead to allow players to shoulder the responsibility for opting out.

In 2021, international advisors aiding the Maltese government in preparation for the then-upcoming decision by the Financial Action Task Force on whether to place Malta on the grey list had advised the government to adopt the convention as a sign of good faith, along with a to-do list consisting of a number of reforms.

Malta was greylisted by the FATF on 16 June 2021, with the decision to take the country off the programme of increased monitoring coming 12 months later.

A recent analysis by The Shift showed how new gaming licence registrations halved that year compared to the previous year.

The change in stance comes at the heels of a newly introduced gaming Bill enacted last June. The Gaming Amendment Act introduced a number of changes to the previous Gaming Act meant to “codify in law the longstanding public policy of Malta encouraging the establishment of gaming operators in Malta.”

The law states that no legal action may be brought against a Maltese-licensed company or its officials in relation to the provision of online gaming services licensed by the MGA. The Bill states that the Maltese court should refuse recognition or enforcement of any sentence or decision taken by a foreign court in this regard.

The new law has raised eyebrows in the EU, with the European Parliament and the European Commission asking the government for more information on a law that could be deemed anti-competitive.

Van Bael & Bellis is an international law firm headquartered in Brussels and London specialising in EU and national competition, EU trade, customs and regulatory law, known for working with government bodies and international trade associations.