New MGA boss and the status of the gambling protection shield

The prestigious Malta Gaming Authority has recently appointed a new chairman. Charles Mizzi will take the helm of the licensing authority. One of the issues he will have to deal with is the controversy surrounding Bill 55, the so-called Gaming Protection Shield, which is highly controversial in several EU countries. What is the current status of the law?

Charles Mizzi officially took up his new post at the Malta Gaming Authority (MGA) at the end of January. He replaces Charles Brincat, who stepped down after two years at the helm of the Authority. Mizzi has experience as a CEO, but comes from a different sector. Prior to his new role, he spent five years as head of the Residency Malta Agency, which enforces the rules governing residence permits in the country. This included dealing with the concerns of foreign investors.

At the MGA, he will also be dealing with legislation and regulations for businesses, but his main focus will be on gambling operators. One of his first areas of focus is likely to be Bill 55, which was passed in the summer of 2023 and protects Malta's gambling companies from foreign lawsuits.

The last we heard of the shield was a while ago: in late summer, the GGL took an official position on Bill 55 - the EU Commission had already been called in to examine the legality of the provisions. Is there anything new?

Mizzi and MGA look forward to working together

Charles Mizzi is highly praised in the MGA's press release on his arrival. During his tenure at the Malta Residency Authority, he has been instrumental in making Malta one of the most respected and sought after residency jurisdictions for investment. There is no doubt that he will do the same at the MGA.

Mizzi himself says: "I am honoured to have been given the opportunity to lead the Authority. I look forward to building on the successes of the past and, together with the team led by the responsible Minister and the Board of Governors, to strategise the Authority to further strengthen Malta's already strong position in this area and to add value for all stakeholders.

"Malta's Minister for the Economy, EU Funds and Lands, Silvio Schembri, congratulated Mr Mizzi on his appointment: "With his experience in managing a number of institutions and his contributions to major projects, Charles Mizzi is undoubtedly the right candidate to build on what has been achieved so far and to lead his outstanding colleagues within the Authority to further success."

The international press assumes that one of its main tasks is to strengthen or justify Law 55.

This law has proved controversial among other European stakeholders as many believe it is incompatible with European law. The Bill, also known as Article 56A of the Maltese Gambling Act, protects operators licensed in Malta from legal action from outside the EU arising from their gambling activities there.

And what about the gambling shield?

Law 55 is still in force. "The Maltese government defends its legislation as a guardian of the principle of free movement of goods and services within the EU. It is proposing a nuanced debate on the balance between national sovereignty and EU-wide regulation". This is according to international reports. Malta is even questioning whether local licensing regulations - such as those in Germany - are themselves compatible with European law.

"The Maltese gaming framework is fully compliant with EU law and is based on the freedoms granted to a company established in the internal market," the regulator said.

European regulators and governments have previously pointed to a decision made by the EU Commission in 2017: According to this, gambling could not be considered a service that should be available across Europe with an MGA licence. The European Commission stated that it would assess the compatibility of the gambling shield with EU law. Further information has been requested from the Maltese authorities.

No decision has yet been taken. Once the Commission has made a decision, the case may be referred to the European Court of Justice (ECJ). The ECJ has always been the final arbiter in disputes between European and national law.

Conclusion

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