Online gaming ruling ‘major step ahead for Malta’

The European Court of Justice ruling against gaming monopolies in Germany has been welcomed by e-gaming consultants who described it as a “breakthrough” judgment which was a “major step forward for Malta”.

They insisted the decision would open up the doors for firms operating from Malta to penetrate the lucrative German market.

George Mangion, a director of an i-gaming consultancy company, said the ECJ ruling, unless appealed by Germany, was a great step forward, especially for those German companies that set up shop in Malta but had to be careful not to service German clients.

He said the development presented a number of opportunities for such clients.

In the same vein, Maria Chetcuti Cauchi, i-gaming and ICT partner at Chetcuti Cauchi Advocates, said the judgment was good news for the industry.

The ECJ landmark ruling handed down on Wednesday dealt a blow to EU member states that have been restricting their gaming and lotteries’ market to keep out the online gaming industry. It ruled that the German state monopoly on most forms of gambling was “unjustifiable” and had to end at once.

The court asked how monopolies could be justified on grounds of public safety when they were investing heavily in advertising their games. This judgment confirms the points raised by the Maltese industry throughout the years. Although access to the internal market was guaranteed by EU rules, gambling was not covered and each state was given the free hand to regulate.

Mr Mangion said opening up the German market was exactly the opposite of what was happening in South Africa which, like Germany, imposed a ban on online gaming. Even Australia imposed such a ban.

“The German companies which operate from Malta had to be very careful not to advertise in Germany. This decision will obviously push these German companies and help them grow in Malta and continue contributing to the economy,” he said.

Mr Mangion said Malta had to continue improving its regulation regime to fend off competition from other countries such as Italy, France, Spain and Denmark.

Dr Chetcuti Cauchi said the ruling upheld the stance that Malta had always sustained and promoted: that of free movement of services, including i-gaming services, among member states.

She referred to recent ECJ rulings saying that the principle of freedom of services could be limited, with the public interest coming into play. She explained that, unfortunately, this had led to a situation where the term “public interest” was “used and misused”.

While the latest ruling did not do away with the public interest exception, it was still a breakthrough decision as it set the parameters within which member states may limit i-gaming services on the basis of the public interest.

“In the present case, in fact, the court ruled that the public interest factor was not being applied fairly and in a consistent and systematic manner by the German federal states,” she said.

Dr Chetcuti Cauchi added that Maltese online gaming operators were highly regulated and strict measures were in place to ensure the services were provided at a high level of transparency, integrity and traceability for the benefit and interest of players and society alike.

When contacted, Malta Lotteries and Gaming Authority CEO Reuben Portanier said it was still early to make a detailed interpretation of the ruling as the regulator still had to go through the full judgment.

However, he said the ruling confirmed the authority’s stance since 2004 that the best way to protect consumers was by regulating online gaming “effectively and with responsibility”.