Joseph Borg, Senior Advisor, has written an article in the European Gaming Lawyer, Autumn edition entitled Malta’s change in attitude.  Joseph addresses Malta’s change in attitude in European fora.

Malta has been known by the industry for being a “friendly” jurisdiction – one which recurrently opposes unreasonable laws enacted by fellow EU member states who breach the principles of the Treaty; one which continuously voices its views in favour of open and balanced

gaming regulatory regimes in front of the Council of the European Union and in the European Court of Justice (CJEU).

However, the recent withdrawal of its Request For Opinion, which had been filed by Malta with the CJEU on 8 July 2014, in regard to the compatibility of the Council’s Europe Convention on the Manipulation of Sports Competitions with the EU Treaties, pursuant to Article 218(11) TFEU, has somewhat raised some eyebrows.

Malta had submitted the Request for Opinion to obtain an opinion on whether the definition of “illegal sports betting” was consistent with the objectives of the Treaty. The withdrawal of this Request for Opinion, coupled with the sudden light approach taken by Malta towards laws enacted by other Member State, is a sign that something has changed in Malta’ s attitude. As of late, Malta has favoured the approach to laws notified through the Technical Regulation Information System (TRIS) rather than taking the more confrontational route by filing reasoned opinions which automatically delayed the implementation of such laws.

Does this mean that Malta has changed its position? According to the Malta Gaming Authority (MGA), absolutely not! In its press release relating to the withdrawal of its Request For Opinion relating to the Council’s Europe Convention on the Manipulation of Sports Competitions, it categorically stated that its position on the Convention remains unchanged. While maintaining its full support with respect to main objectives of the Convention which is to prevent the manipulation of sports results, it still believes that the definition of ‘illegal sports betting’ goes beyond the scope of the Convention and does not contribute to fight against match fixing.

However, my understanding is that in the coming months and perhaps years, Malta will focus more on achieving its objectives through dialogue and negotiations rather than by embarking on holy wars with its fellow EU Member States. This doesn’t mean that it will not file reasoned opinions when another Member State proposes a law that is blatantly in breach of the principles of the Treaty. As a matter of fact, Malta has filed reasoned opinions on the laws proposed by Hungary and Portugal. In the same way, it will not stop intervening in CJEU cases to voice its concerns. In fact, Malta kept intervening and from my understanding it will keep intervening in such cases, in the foreseeable future.

Malta has always been open to co-operation with other jurisdictions, particularly with respect of fraud, money-laundering and match-fixing. The recent case implicating a number of Italian operators licensed in Malta and Italy, who were allegedly involved in money-laundering and other criminal activities, is just one of a series of instances where Malta offered and factually provided assistance to its counterparts in other jurisdictions. However, Malta’s perceived ‘belligerent’ attitude in various EU fora over the past 10 years has, to some extent, side-lined and perhaps isolated Malta from its fellow Member States in such fora. Probably the new approach is also a result of a change in attitude adopted by other Member States towards Malta. Now that many of them have started regulating and gaining experience in regulating online gaming, they have realised that Malta was not doing such a bad job after all. They also recognise  the needs of the industry and understand Malta’s arguments better since  they are now experiencing these issues themselves. Keep in mind that most of the Member States which are now regulating online gaming and opening up to foreign operators, used to look at online gaming as the devil in disguise less than 10 years ago.

Will this change in attitude work? It is hard to say, at this stage. The way the gaming regulatory climate has developed in Europe did not allow Malta to maintain the same attitude. Member States have opened up significantly to online gaming but there is no way that they will start recognising each other’s licenses in the foreseeable future. Perhaps, the best that can be achieved at this stage is to agree on a set of common standards to make it easier for operators to comply with the national regulatory regimes across Europe. This would significantly make life easier for operators and allow them to compete with other operators who are not licensed and regulated in Europe.

The industry in Malta hopes that this change in attitude produces something tangible. What the industry does not expect, however, is for Malta to become weak on the international sphere. It expects Malta to remain vociferous, even if with a different tone when compared to the past, but still there to promote best practices and uphold the freedoms of the treaty. Let’s hope the new philosophy works, for the growth of the jurisdiction, the good of the industry and the benefit of consumers.