Southeast Asia News Desk

(AsiaGameHub) –   The European Court of Justice (ECJ) has issued a further setback to Malta’s efforts to defend its gambling legislation and licenses against challenges from other EU nations.

A preliminary ruling from the ECJ was released today concerning the conflict between German regulators and the Malta-based operations of Lottoland and Maltese officials.

The ECJ found that European Union law does not stop member states from prohibiting online services offered by operators from other member states.

This judgment supports Germany’s prohibition on online slot machines and lottery betting, affirming that players retain the right to seek compensation for losses from companies operating without a license or in violation of EU law.

The ruling addresses a protracted legal conflict between Maltese and German judicial bodies over the operations of companies based and licensed in Malta within other EU jurisdictions.

Initial disputes involved Malta challenging German court decisions, arguing that licenses issued by the Malta Gaming Authority (MGA) adhered to the principles of the Treaty on the Functioning of the European Union (TFEU).

Invoking TFEU provisions for “unrestricted services,” MGA licensees believed they could legally offer iGaming services, especially while Germany’s federal states and government remained deadlocked over terms for a new Interstate Gambling Regime.

After over ten years of arbitration and regulatory stalemate, Germany’s federal states implemented the Interstate Treaty on Gambling (GlüNeuRStV), which took effect on 1 July 2021, establishing a finalized framework to regulate and license online gambling.

DACH drama

The EU legal battles primarily involve two Malta-licensed firms active in Germany and one in Austria during the late 2010s and early 2020s. While the ECJ has previously offered opinions, this marks its first preliminary ruling—an authoritative interpretation of EU law.

The two companies in question regarding Germany are Tipico and Lottoland. The former was challenged by a former customer seeking to reclaim losses sustained between 2013 and 2020.

Tipico operated without a German license during that period, though it had applied for and later obtained one following the market’s re-regulation in 2021. In Lottoland’s instance, a customer sought to recover losses from 2019 to 2021.

The ECJ’s preliminary ruling directly concerns the Lottoland case, but its implications will undoubtedly influence ongoing litigation involving Tipico and Virtual Services Digital Limited—the latter being the company embroiled in Austrian legal proceedings.

The court explicitly ruled that Article 56A of the TFEU “must be interpreted as not precluding national legislation which imposes a prohibition on the organisation of online casino games, in particular slot machines, and of forms of betting such as online betting on the results of lottery draws”.

In essence, the EU’s highest court has declared Malta’s primary legal defense concerning its licensed companies’ activities to be invalid.

Bill 55 at the bat?

Malta has sought to protect its gambling sector through Bill 55, the common name for a 2023 amendment to its Gambling Act—specifically, Article 56A.

Bill 55 empowers Maltese courts to dismiss foreign legal orders against Malta-based and licensed firms that are compliant with Maltese law, even if they violate the laws of other EU member states where they operate.

Malta’s position rests on the EU principles of freedom to provide services and freedom of establishment, grounded in Article 56 of the TFEU.

Maltese courts contend that EU freedom of trade principles form the foundation of Bill 55 and justify the activities of its licensed gambling operators in countries such as Germany.

Does this ECJ ruling signify the end of these disputes? It is highly improbable.

The international legal clashes between Maltese and other EU courts are long-standing, and Bill 55 was specifically crafted to shield gaming businesses from foreign legal actions.

The ECJ has now delivered two rulings in 2026 that reinforce the right of Member States like Germany and Austria to ban cross-border gambling services and impose civil liability for violations—further weakening the legal protection afforded by Malta’s Bill 55.

Gambling contributes approximately one-tenth of Malta’s GDP, and the island faces emerging competition to its status as a global iGaming hub from locations like Estonia and the UAE.

As an EU member, Malta can invoke ‘public policy exceptions’ under the EU’s Brussels I Recast Regulation. This regulation is based on the mutual recognition and enforcement of legal judgments.

By citing this law, Malta argues that foreign court rulings which contradict its own regulatory framework should not be enforced within its territory, claiming this exception is relevant to its online gambling system.

Malta insists that Bill 55 is a necessary protective measure to prevent its domestic courts from being inundated by a surge of related litigation stemming from online gambling disputes, many of which EU courts have delegated to third-party claims firms—a pattern evident in the current caseload.

Therefore, Bill 5 effectively enshrines this stance into national legislation.