EU and Malta Face Potential Legal Dispute over Online Gaming Regulations
In a landmark case, the European Court of Justice (ECJ) in Luxembourg is set to rule on the controversial issue of online gambling, with potential far-reaching implications for the industry across the European Union.
The case, identified as C-440/23, pits Malta's efforts to protect its gambling sector against Germany's consumer protection arguments. At the heart of the dispute is Bill 55, a Maltese law passed in June 2023, which protects Maltese-licensed operators against foreign claims related to gambling losses.
The ECJ is examining claims by a German lawyer who is seeking repayment of gambling losses from two Maltese-licensed operators. The lawyer asserts that the contracts with German customers were void because the firms were not authorized to operate in Germany. The Maltese court handling the dispute referred the question to the ECJ for guidance, transforming a private debt case into a test of principle.
The Malta Gaming Authority (MGA) has defended Bill 55, stating it reflects established principles and the authority of courts to reject foreign judgments that clash with public policy. However, the European Commission has launched infringement proceedings against Malta, arguing that Bill 55 is contrary to the EU principle of mutual recognition of judgments.
Nicholas Emiliou, representing Malta, stated that a claim for reimbursement due to illegal gambling does not constitute an abuse of EU law. In a preliminary opinion on September 4, 2025, Advocate General Emiliou supported that German courts have jurisdiction, German law applies, and losses by players in illegal online casinos can be reclaimed without being considered abusive. This could lead to a wave of refund claims against online gambling operators in Germany, increasing legal uncertainty for the industry and potentially reshaping the regulatory landscape in the EU concerning online gambling.
The Maltese operators argue that it is Germany's restrictive market rules, and not their activities, that clash with European law. The MGA argues that country-level restrictions violated the case law of the CJEU and create a barrier to market access and trade.
As of the current hearing, the answer to whether the German ban on online gambling violates EU law is purely hypothetical. A broad ruling could have far-reaching implications, while a narrow one might be limited to the dispute at hand.
The verdict of the ECJ will mark the next chapter in the increasingly tense relationship between Malta and Brussels regarding the future of online gambling. The outcome could set a precedent for other EU countries with restrictive online gambling regulations and their interactions with operators licensed in more permissive jurisdictions.
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