Malta’s controversial Bill 55 regulation is drawing intensified scrutiny from European regulators and legal experts who argue the measure violates EU law by shielding gambling companies from court judgments issued elsewhere in the bloc.
The regulation, formally known as Article 56A of Malta’s Gaming Act, empowers Maltese courts to refuse recognition and enforcement of foreign judgments involving companies registered on the island. Since its passage through Malta’s parliament in June 2023, the law has effectively protected owners of major brands including Pokerstars, Betsson, and Unibet from judgments handed down in other EU jurisdictions.
Rising Wave of Legal Claims
Cross-border gambling litigation has surged across the EU, with Malta-based companies frequently targeted in consumer complaints. German lawyer Benedikt Quarch, whose firm handles thousands of cases, estimates gambling losses being reclaimed throughout Europe could eventually total €1 billion.
There are currently an estimated 50,000 ongoing claims in Germany and Austria alone, according to lawyers interviewed for this report. Vienna-based law firm G&L Legal is managing over 15,000 cases, many involving major Malta-domiciled operators.
Karim Weber, who leads G&L Legal’s work in this area, said Austria’s Supreme Court has ruled in favor of his clients in hundreds of cases involving Malta-based companies. However, Maltese courts have yet to recognize any of the more than 200 rulings Weber has sought to enforce, leaving clients without compensation.
“It was like a sledgehammer. It was pushed through the Maltese Parliament in three weeks with the consent of the opposition,” Weber said, describing how Bill 55 became law.
The Legal Basis for Claims
Austrian and German courts have frequently ruled that gambling contracts with Malta-licensed operators are null and void when those operators lack proper licensing in their jurisdictions. In one notable case from August 2021, Austria’s Supreme Court determined that all transactions between players and Pokerstars owner TSG Interactive Gaming Europe were invalid because the Flutter subsidiary did not hold an Austrian national license.
“If the contract is illegal, it is null and void. It is the same as if you were to sell me two kilos of cocaine today. The contract would be null and void under civil law.”
However, when Malta’s civil court was asked to enforce that ruling in July 2023, judge Toni Abela denied the request—just weeks after Bill 55 passed through parliament. The Maltese government described the legislation as part of a policy of “encouraging the establishment of gaming operators.”
EU Law Concerns
Miguel Poiares Maduro, a former advocate-general at the European Court of Justice, argues that Malta’s position breaches fundamental EU principles.
“EU law establishes the principle of mutual recognition between member states on judicial decisions,” Maduro said. “It’s not up to the Maltese to define when their courts may not implement a decision from another member state.”
He called on the European Commission to initiate infringement proceedings against Malta for failing to uphold EU law.
Austria’s Supreme Court has formally requested the European Court of Justice to intervene, claiming in an October 2024 submission that Malta’s failure to recognize its judgments violates EU law. The court is seeking a definitive ruling on whether Bill 55 breaches European legal principles.
Commission Response Under Scrutiny
The European Commission has faced criticism for its measured response to complaints about Bill 55. Despite receiving a formal complaint in 2023, the Commission has only stated it is “assessing” the information provided by lawyers and German MEP Sabine Verheyen.
“I reproach the Commission for not acting adequately. I think it is important for the Commission to really do justice to its role as guardian of the Treaties,” Verheyen said in April 2024.
The apparent inaction reflects broader regulatory gaps around gambling in Brussels. The EU has no harmonized gambling laws, and in 2017 the Commission closed its dedicated Gambling Unit. A 2021 letter from 13 European regulators calling for common policies was quietly dismissed.
Scale of Illegal Gambling Operations
According to marketplace analysis firm Yield Sec, approximately 70 percent of web-based betting in the EU was illegal by mid-2024, with 6,000 unlicensed providers targeting the region. Another consultancy, H2 Gambling Capital, estimates the illegal market share at around 20 percent. While methodologies differ, both assessments point to significant unlicensed gambling activity.
Quarch estimates there are around 20,000 active claims related to illegal gambling in Germany alone, with numbers growing in the Netherlands and Sweden.
“There are definitely thousands of people affected by Bill 55 because it’s a majority of the companies domiciled in Malta which do not pay,” Quarch said. “When we look at casino operators working offshore jurisdictions, place number one is Malta.”
Industry Stakes
The financial implications are substantial for Malta’s gambling sector, which accounts for approximately 12 percent of the country’s economic output.
Flutter Entertainment acknowledged the risk in its latest annual report, stating: “If a material proportion of player claims were successfully enforced either in Malta or any other jurisdiction, it could have a material adverse effect on our business.”
Betsson described its “vulnerability to customers claims” in company filings, while Kindred Group, which operates Unibet, called Bill 55 “particularly important considering the increasing number of customer litigations in and subsequent enforcement efforts by Germany, Austria and the Netherlands.”
Operator Defense
Gambling operators maintain they have legal grounds to serve the entire EU market based on their Malta license. In response to inquiries, Flutter stated that Pokerstars operates legally from Malta with “freedom of services across member states under EU law.”
“The court decisions being made under Austrian law are incompatible with these settled EU legal principles, which has been confirmed by the Maltese court in its judgment of 27 February 2025. As such, Pokerstars will continue to vigorously defend these cases in Austria and when brought before Maltese courts,” a Flutter spokesperson said.
This position reflects the fundamental legal dispute: operators argue their Malta registration grants them rights to operate throughout the EU, while national governments maintain that companies must be licensed domestically and pay local taxes to operate legally.
Regulatory Patchwork
The absence of EU-wide gambling regulation has created divergent national approaches across the bloc. Finland maintains a state monopoly and bans foreign providers. Greece’s market liberalization resulted in a private monopoly. Portugal, Spain, France, Italy, and Germany attempt to license and tax authorized companies while banning unlicensed operators.
Between 2021 and 2024, Spanish authorities fined 77 companies for illegal gambling activities, with 75 based abroad. The fines totaled €350 million, but none have been collected, according to government transparency data.
Meanwhile, jurisdictions like Malta, Cyprus, and Estonia actively attract gambling companies through favorable legislation and low tax rates.
Stuart Kenny, founder and former CEO of Paddy Power, expressed regret about not pushing for stricter controls during his tenure.
“The industry does not want to be regulated by Europe, because Europe would be a lot stricter than national governments. National governments are as addicted to the tax revenue as the addicts are addicted to online slot machines.”
Kenny added: “It is utterly preposterous that the EU has got involved in so many other health issues and rightly so but gambling has an opt-out.”
Path Forward
As legal pressure mounts, the gambling industry and European regulators await clarity from the European Court of Justice on fundamental questions about cross-border gambling services, regulatory sovereignty, and consumer protection within the EU single market.
Quarch characterized the situation as a failure of European law enforcement: “The illegal online gambling market from my point of view is a very interesting and unfortunate example of how law enforcement in Europe does not function.”
The Malta Gaming Authority and Maltese government declined to comment for this story.
Source: Investigate Europe
