Reports of lawsuits against online casinos in which customers successfully recover lost stakes are now commonplace. Many of the gaming platforms involved offered their services under licence in Malta before the GlüStV 2021 came into force - and some still do. Now, the Maltese government wants to protect the local gambling industry from such claims with a new law.

As tagesschau.de recently reported, Malta is planning to change the law to provide a sort of protective umbrella over the local gambling industry. This would mean that Maltese courts would no longer enforce foreign judgments relating to the recovery of losses from online casinos and/or sports betting providers if the addresses in question are licensed in the country.

Wave of lawsuits to be stopped

The change in the law, introduced by Economy Minister Silvio Schembri, is apparently intended to stem a wave of lawsuits against the country's gambling companies that has been going on for months. It is not uncommon for six-figure sums to be claimed in such cases - and with regular success. According to the Tagesschau article, the claims are mainly being made by German and Austrian gamblers.

In fact, more and more law firms are focusing on this area of business. A lawyer interviewed by the Tagesschau news programme said there were more than 5,000 pending cases. The planned change in the law in Malta is likely to have far-reaching consequences for the many outstanding cases and also for future judgements.

Law firm managers are far from enthusiastic. Many voices are warning of breaches of EU law. Two lawyers from Germany and Austria have already lodged a complaint with the European Commission.

Many requirements originate from the time before the GlüStV 2021

Online gambling has been accessible in Germany for a long time, but was largely prohibited until 1 July 2021. With the entry into force of the new State Treaty on Gambling (GlüStV) at that time - and in fact already a few months before - online casinos or sports betting providers can apply for a licence valid throughout Germany and provide their services completely legally if they comply with the applicable regulations.

Many of the companies now licensed have been operating in the country before. In many cases, they were operating under a Maltese licence at the time. Their legal argument was that the Maltese gambling licence entitled them to offer their services in Germany despite the ban. This is because there is a freedom to provide services in the EU, which includes the right of a company to provide the service in another EU/EEA state using its own staff. There have been few consequences for either the gambling companies or the players.

Until today: For some years now, lawyers have increasingly been suing clients who lost a lot of money in the period prior to the GlüStV and claiming their losses back. The legal basis for this is the fact that the casino or sports betting offers were illegal before 2021. Therefore, the contracts between the players and the gambling companies would not be valid.

The same applies to companies that still offer their services in Germany under a Maltese licence. These addresses are also often sued for damages.

German politics puts pressure on

German politicians are calling for more commitment from the authorities here - especially the Ministry of Economic Affairs. They should insist that German and European judgments continue to be recognised by Maltese courts. Again and again, unobjective phrases are used: Malta is the "godmother of the gambling industry" - and general associations (prejudices) with money laundering and organised crime are made.

Malta's Ministry of Economic Affairs clearly rejects the criticism. The country is justified and determined to protect its gambling industry. The requirements that online casinos or sports betting providers have to fulfil in order to obtain a Maltese licence are very high, a spokeswoman for the authority told the Tagesschau. With the change in the law, one wants to give the providers the necessary security against unfounded lawsuits, which they deserve as licensed companies.

It is still open when the law will come into force. The resolution is currently in the parliamentary process.

Conclusion

The planned change in the law is causing quite a stir among German player protection groups and specialised lawyers. The federal government appears largely unconcerned. According to the Tagesschau, responsibility would be shifted to each other in various places. At least the Joint Gambling Authority of the Länder (GGL) has taken note of the events in Malta. It is not yet clear whether and how they will react.

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