Dutch lawyers add to criticism of Maltese gambling bill

Lawyers say the bill undermines Dutch jurisprudence.

The Netherlands.- Lawyers in The Netherlands have joined the voices criticising Malta’s controversial Bill 55, which introduces legal protections for Malta-licensed gambling operators.

The German gambling regulator, the GGL, has previously criticised the bill and the European Commission has announced that it will inspect its compatibility with EU law. 

Now Benzi Loonstein, a lawyer at Loonstein Advocaten, has written to the Dutch minister for legal protections, Franc Weerwind, to provide the law firm’s opinion on the bill. He writes that Bill 55 contravenes EU law on the enforcement and judgement of civil and commercial matters. He also accused Malta’s government of changing laws ‘in a non-transparent way’.

He wrote: “With this law, Malta actually wants to undermine Dutch jurisprudence (and that of other EU member states). The law is nothing more or less than a response to consumers’ choice to seek justice in their place of residence; a right guaranteed in EU treaties. 

“As a result of the law, the Dutch court would no longer be able to rule in disputes of Dutch consumers against these companies from Malta.”

The Netherlands opened a regulated online gambling market in October 2021, overseen by the national gambling regulator, the KSA. Loonstein says that Malta’s amendments to its gambling legislation would undermine the KSA’s work to enforce compliance with Dutch laws and pursue unlicensed operators illegally targeting the market

He said he was writing to Weerwind on behalf of complainants against Maltese gambling firms, saying that up to 500,000 Dutch people could have been affected by MGA-licensed companies.

He concluded: “We call on the Dutch government to stand up for the interests of this group of Dutch people and to ensure (via the European Commission) that Malta does not continue with the contempt of the Rule of law enshrined in the EU treaties.

“We also appeal to the government to ensure that companies that do not respect Dutch judgments lose their permits and/or are no longer eligible for a permit.”

Malta, the Malta Gaming Authority (MGA) included, has defended its legislation, which seeks to protect MGA-licensed gambling operators from prosecution for targeting other EU markets under Maltese licences. 

The MGA has denied the legislation breaches EU law, noting that the 2013 Recast Brussels Regulation allows a member state to refuse to recognise a legal judgement that does not match the principles of its own legal system.

It argues that Bill 55 is not intended to introduce new exceptions but to “enshrine into law the long-standing public policy of Malta in relation to the gaming sector”. It argued that the bill’s scope is “highly restrictive”, imposing limited conditions under which legal action cannot be taken against MGA-licensed operators rather than ruling out all prosecutions.

These conditions mean that an operator is only protected when its gambling operations are legal under Malta’s Gaming Act. As such, the bill would only affect lawsuits that conflicted with Malta’s own gambling regulations.

However, that could well rule out many of the prosecutions that regulators in other European countries may seek. That raises the question of whether Malta’s overall gambling legislation is compatible with European law. The MGA claims that it is, citing rules on the free movement of services across the EU.

Several European regulators and governments take a different view, noting that the EC had made an exception for the gambling sector in 2017.