Article 56A of chapter 583 of the laws of Malta : a critical appraisal

Abstract

Unlike other sectors, the gambling industry remains unharmonised at European Union level. This regulatory gap has led to divergent national regimes across Member States – some liberalised, others highly restrictive. From 2017 onwards, the European Commission also deprioritised the gambling sector, halting enforcement and infringement actions. This created further space for Member States to impose restrictive structures that may not have withstood scrutiny in other legal areas. Austria and Germany, for example, adopted monopolistic models prohibiting foreign operators from offering services in their jurisdictions. Yet, consumers in these countries – particularly Austria – have exploited these restrictions by freely using Maltese-licensed platforms, enjoying their winnings, and later seeking refunds for losses through their domestic courts. These courts, applying national law, ruled in favour of the players. The resulting judgements are then sought to be enforced in Malta under the principle of mutual recognition of judgements, now governed by the Brussels I Recast Regulation. In response, Malta introduced Article 56A into its Gaming Act, providing that such foreign judgements shall not be recognised or enforced when they contradict Malta’s public policy. Rather than creating a new legal defence, Malta codified an existing one – the public policy exception under Article 45(1)(a) of the Recast Regulation. Despite this, Article 56A has faced criticism and legal challenges. Its opponents argue that Malta is stretching the limits of the public policy exception, particularly given its undefined scope under EU law. This dissertation explores the legal validity of Article 56A by analysing parliamentary debates surrounding Bill 55 and two landmark Maltese judgements, supported by broader analysis of EU law principles and the interpretation of the public policy exception under the Recast Regulation. It ultimately argues that Malta did not bypass EU law but rather crystallised an EU-sanctioned exception in response to perceived abuses within the fragmented EU gambling landscape.