Zoe Sharp
The Malta Gaming Authority (MGA) is seeking legal guidance on the potential consequences of signing an agreement known as the Macolin Convention. The country had been refusing to ratify the said agreement since 2014, objecting to the definition of “illegal sports betting”. But it seems that the pressure imposed by the European Commission and Parliament on the Maltese regulator was enough to make it consider signing the Macolin Convention.
Assuming the Macolin Convention gets ratified, sports betting platforms that operate from Malta and cater to the needs of punters from jurisdictions where sports betting is prohibited would be deemed illegal. Currently, MGA-licensed sports betting sites are not required to prohibit users from jurisdictions where sports betting is illegal from using their services. Instead, it is the players’ responsibility to opt out.
A contract awarded by the Maltese gambling watchdog to the legal company Van Bael & Bellis, headquartered in Brussels and London, demonstrates the country’s change in stance. The contract, issued on March 5 this year, is valued at €22,750 and aims to secure legal expertise on the potential consequences for Malta’s gambling industry if it signs the Macolin Convention. The law firm boasts expertise in EU and national competition law, EU trade, customs, and regulatory law. It is known for its collaboration with various government entities and international trade associations.
The change in perspective coincides with the recent introduction of a gaming bill known as the Gaming Amendment Act. Enacted this June, the legislation includes several reforms to the previous Gaming Act. The new law aims to make prosecuting Maltese gaming companies from abroad almost impossible. The bill also states that if a foreign court issues a verdict against an MGA licensee, the Maltese court should dismiss it.
Malta Introduces New Gaming Legislation Which Stirs Up Controversy among EU Officials
The proposed legislation has attracted the attention of the European Union (EU). The European Parliament and the European Commission asked the Maltese government to provide further clarification on the legislation after concerns were raised that the new law could be deemed as anti-competitive.
In 2021, international advisors recommended Malta signing the Macolin Convention as a gesture of goodwill. At that time, the Financial Action Task Force (FATF) was still wondering whether to put Malta on its grey list. On June 16, 2021, the country was greylisted. As a result, Malta’s reputation was significantly hit, and the number of new license gaming registrations dropped by 50%, as reported by The Shift.
The proposed gaming bill aims to help the country regain its strong position on the iGaming market and attract the attention of prospective registrants. Furthermore, the Malta Gaming Authority announced that it will soften its approach to misbehaving operators and suspend licenses only in a pinch.
But according to several German and Austrian lawyers, the Gaming Amendment Act violates the European Rule of Law by blocking EU residents’ fundamental rights. The lawyers represent individuals who sue MGA licensees for illegally offering gambling services in Germany and Austria. In response, the MGA said that German and Austrian law firms were advertising the option for players to sue Malta-based operators in an effort to claim back their losses.