background
Malta wants to protect gambling companies from claims for damages from abroad. The effects on German player protection would be far-reaching. The federal government appears clueless, the EU is examining a complaint.
The Maltese government plans to change the law to protect the domestic gaming industry from lawsuits from abroad. Economics Minister Silvio Schembri introduced the project to Parliament. Gambling regulation in the country is to be expanded to include a requirement: Maltese courts should no longer enforce judgments from abroad against companies and their management if they have a Maltese gambling license and comply with local regulations.
Malta is apparently reacting to a wave of lawsuits from abroad. In particular, players from Germany and Austria have recently complained more and more frequently against gambling providers based in Malta. Civil courts now regularly order the companies to reimburse the plaintiffs for gambling losses suffered. The proceedings often involve five- and six-digit amounts.
Online gambling was banned in Germany for a long time
In Germany, online gambling was largely banned for years, with exceptions in Schleswig-Holstein. The legal situation only changed almost two years ago. Since then, companies have been able to apply for a license to legally offer virtual slot machine games for money on the Internet to customers from all over Germany. However, many gambling companies have been active in this country for much longer. That means: they offered online casinos for the German market when it was still forbidden. Their justification was that gambling licenses from Malta, among others, would have entitled them to do so.
Although authorities and courts have repeatedly rejected this, the lucrative business ran largely undisturbed for years. In addition, it was hardly possible for players to recognize that the numerous German-speaking online casinos on the Internet were illegal games of chance. Banks processed the payments, major Bundesliga clubs and even the German Football Association were already advertising sports betting providers that also offered online casino games for real money on their platforms.
Aftermath for time of illegal offers
All of this had few consequences for the gambling companies. The supervisory authorities did not succeed in stopping the illegal business, public prosecutors remained inactive. The federal states finally agreed to legalize the online gambling market from summer 2021. Since then, licenses have also gone to companies that were previously active in the black market.
However, the time before legalization is not completely over yet. For several years, lawyers have been suing gambling companies in civil courts on behalf of their clients, who are often addicted to gambling. They argue that the offer was illegal in Germany at the time, meaning that the gaming contracts between the customers and the companies were void. Since the providers have violated the legal prohibition, the losses from this period must be reimbursed.
Thousands of procedures in Germany
The first judgments in which the plaintiffs were right caused a stir. More and more law firms and start-ups are discovering the topic as a new business field. István Cocron estimates that more than 5,000 proceedings are currently pending nationwide. The lawyer has been working in the field for several years, and according to his own information, his law firm is currently handling around 1,400 cases.
While the courts initially judged inconsistently, the gambling companies are now regularly losing in court. Several higher regional courts have also ruled accordingly.
The proposed law from Malta could have far-reaching effects on the many open and future procedures. Cocron and many of his colleagues see this as an attack on consumer protection. Malta is about giving the gambling companies time to throw a spanner in the works. In his view, the project clearly violates EU law.
Two lawyers from Austria and Germany have already lodged a complaint with the EU Commission. This was first reported by the Times of Malta newspaper. A spokeswoman for the EU Commission confirmed at the request of the ARD Capital Studiosthat the complaint will be examined.
federal ministries refer to each other
While the issue is causing a stir among player protectors and lawyers, the federal government has so far been largely clueless. At the request of ARD Capital Studios several federal ministries refer to each other and see the responsibility of the other. The joint gaming authority of the federal states announced that they had already taken note of the planned change in the law. “The effects of this planned regulation on player protection in Germany cannot be assessed at this point in time.”
The former left-wing politician Fabio De Masi calls for more commitment from politicians. In particular, the Ministry of Economics should push for Malta to continue to recognize court decisions from Germany and Europe. De Masi describes Malta as the “godmother of the gaming industry” and reminds that the industry has repeatedly attracted attention in connection with money laundering and organized crime.
A spokeswoman for the Maltese Ministry of Economic Affairs rejected criticism on request. Malta is determined to protect its gambling sector. The regulatory standards are high in Malta and the law should give the licensed providers the necessary security against unfounded challenges. It is still unclear when the law will come into force. It is currently under parliamentary procedure in Malta.