CJEU Opinion Casts Further Shadow Over Malta’s Bill 55

(AsiaGameHub) –   A fresh legal layer has emerged in the ongoing debate surrounding Malta’s Bill 55, following an opinion issued by an Advocate General at the Court of Justice of the European Union (CJEU).

Although the opinion from Advocate General Nicholas Emiliou does not explicitly mention Article 56A of Malta’s Gaming Act—widely known as Bill 55—it addresses the specific operational activities that the legislation was designed to shield.

“A sports betting operator that provides services within a national market without holding the necessary licence may be required to reimburse stakes received from players,” Emiliou stated, referencing a case involving Tipico.

While Tipico is headquartered in Malta, its primary customer base is in Germany, where it currently holds a leading market position.

The company is currently defending itself against a lawsuit from a former client seeking to recover losses incurred between 2013 and 2020. During that period, Tipico operated internationally under a Malta Gaming Authority (MGA) licence rather than a German one.

Under German law, providing sports betting services without a local licence renders the contract between the bookmaker and the player null and void, a principle the customer is using to justify their claim for restitution.

In his assessment, Emiliou remarked that, “from the perspective of German law, the claims brought by the consumer in question against Tipico appear, in principle, to be well founded.”

He noted, however, that Tipico argues it was prevented from obtaining a German licence due to “certain deficiencies” in the application process.

Following the implementation of the Fourth Interstate Gambling Treaty 2021 (GlüStV 2021), the company successfully obtained a licence from the newly established regulator, the Gemeinsame Glücksspielbehörde der Länder (GGL), and is now included on the authority’s “white list” of authorized operators.

Emiliou calls for nuance

German courts have struggled to determine how the European Union (EU) principle of freedom to provide services should influence their obligation to dismiss such consumer claims.

While Emiliou advocates for a nuanced approach, his overall stance appears to align more closely with the German judiciary than with Tipico’s position—and, by extension, the defensive stance adopted by Malta through Bill 55 in 2023.

The Cypriot diplomat concluded that EU member states maintain the right to mandate a local gambling licence, and that such requirements are compatible with the bloc’s laws regarding the freedom to provide services.

He argued that national courts are entitled to enforce these licensing requirements against operators lacking the proper authorization, even if those operators claim that procedural flaws prevented them from obtaining a licence.

Emiliou concluded: “The freedom to provide services does not preclude the German authorities from requiring a German licence to offer sports betting services in Germany, nor does it in general preclude operators which did so without the required licence from being subject to consequences under civil-law, such as the nullity of the contracts they concluded with their clients.”

He added: “The primacy of the freedom to provide services does not require national authorities to leave unapplied a licensing requirement which is, in itself, compatible with that freedom whenever an operator has been unable to obtain a licence through a non-discriminatory and transparent licensing procedure.”

No respite in Bill 55 battle

It is important to clarify that Emiliou’s opinion is not a direct ruling against Bill 55. Furthermore, determinations by CJEU Advocates General are legal opinions rather than binding judgments, which remain the sole purview of the CJEU itself.

Nevertheless, this opinion adds to the growing legal pressure against the core premise of Bill 55: the idea that Malta-licensed firms are shielded by Maltese law from regulatory and legal actions in other markets where they operate.

Germany and Austria have been particularly contentious jurisdictions in this regard. In Germany, a 2023 case involving Lottoland was also predicated on the firm’s lack of a local licence at the time of the customer’s losses.

Similarly, Austrian gambler Marek Ehrlich has been pursuing a claim of nearly €500,000 against the Malta-based firm Virtual Services Digital Limited, citing the same lack of an Austrian licence.

Although Ehrlich has received support from both Austrian courts and the CJEU, Maltese courts have refused to yield, invoking Bill 55 in February. The CJEU had previously also sided with the German position in the Lottoland case.

These disputes follow a 2022 lawsuit against the now-defunct Maltese entity Titanium Brace Ltd, which operated as DrückGlück in DACH markets. In that instance, an Austrian player sought restitution for losses incurred while the firm was unlicensed, and the CJEU’s determination again favored the Austrian perspective over the Maltese one.

With Maltese companies operating across numerous international markets and the gambling sector contributing roughly 10% of the nation’s GDP, policymakers and courts in Malta remain committed to using Bill 55 to protect this economic pillar.

Conversely, courts in other EU member states—and seemingly the CJEU itself—do not share this view. Similar concerns have been voiced elsewhere; for instance, Dutch legislators referenced Bill 55 during debates on gambling regulation last year.

Ultimately, the ongoing conflict between the courts of Austria and Germany, the Maltese judiciary, and the CJEU shows no signs of abating.