The European Commission has launched formal proceedings against Malta over a controversial law that shields licensed gambling operators based on the island from having to comply with court rulings issued in other EU member states.

According to a report by the Times of Malta, the Commission sees this Maltese legislation as breaching the EU Regulation on the recognition and enforcement of judgments in civil and commercial matters.

The law in question, adopted two years ago, was designed to protect Malta-licensed gambling companies from lawsuits filed by players from abroad seeking compensation for losses. The legislative change came in response to a rising number of legal challenges in countries like Austria and Germany, where courts have ruled against Maltese operators on the grounds that they lack proper licenses in those jurisdictions.

In essence, the Maltese law prevents enforcement of foreign rulings unless the operator is proven to have violated Maltese law. This effectively renders court decisions in other EU states unenforceable on the island when it comes to gambling disputes.

The European Commission argues that such a legal framework undermines judicial cooperation across the bloc. In its official statement, the Commission said:

“The Commission considers that the Maltese legislation, by effectively shielding the online gaming sector from cross-border litigation, undermines the principle of mutual trust in the administration of justice within the Union.”

Malta now has two months to formally respond to the allegations. If the matter cannot be resolved through dialogue, the Commission may refer the case to the Court of Justice of the European Union.

Separately, authorities in Japan have also approached Malta, requesting restrictions on access for Japanese residents to online casinos licensed on the island.