(AsiaGameHub) –   Concerns that a flood of players might seek to recover losses from Maltese operators have grown stronger following the latest ruling by the Court of Justice of the European Union (CJEU).

The CJEU has sided with the view that contracts between players residing in Germany and operators without a license in the country are fundamentally void.

Prolonged legal disputes between Malta and the EU member states of Germany and Austria over numerous compensation claims have escalated over the past decade, requiring a determination from the Attorney General of the CJEU.

In a preliminary ruling requested by Malta’s First Hall of the Civic Court, the EU court outlined that players may be entitled to claim back losses from operators not licensed in the country. The European Court held that Article 56 TFEU – an EU law governing restrictions on the provision of unrestricted services – does not take precedence over national laws related to online gambling disputes.

The latest ruling will be a setback for Malta’s legislative framework, as it continues to face cases against operators regarding compensation for former customers of unlicensed entities.

At the time the relevant activities took place in Germany, the country’s regulatory frameworks had not yet been finalized by the Bundestag, Germany’s federal government. Since then, the framework has shifted due to the Glücksspielneuregulierungsstaatsvertrag (GlüNeuRStV), the online gambling regulatory framework launched in July 2021.

However, the EU’s preliminary ruling stated that a change in German lawmakers’ approach to the gambling sector did not invalidate the prior prohibition in place when the wagers were made.

That said, the CJEU’s ruling is somewhat unsurprising and continues the trend away from Malta, given a previous opinion by Advocate General (AG) Nicholas Emiliou of Cyprus, which noted: “A sports betting operator that offers services in a national market without the required license may be required to refund the stakes collected from players.”

This was in relation to a long-running German dispute challenging Tipico Malta’s online gambling license over loss recovery for the period between 2013 and 2020.

Malta has yet to enact Bill 55 in the specific case ruled on by the CJEU, which involved Lottoland and two German players.

Even so, Malta could still rely on the law as a shield against EU regulations and domestic frameworks in EU markets.

Whether this will provide an effective shield for Maltese operators remains to be seen, however, given key developments from the latest EU ruling stating that Article 56A of the TFEU “must be interpreted as not precluding national legislation which imposes a prohibition on the organization of online casino games, in particular slot machines, and of forms of betting such as online betting on the results of lottery draws.”

Germany’s regulator, the GGL, has been one of the most vocal critics of Maltese operators being shielded from European law.

The GGL has pursued the case with the European Commission, arguing that the bill needs to be reassessed, along with its alignment with EU frameworks.

Previously, the GGL stated: “We are of the opinion that this law should not be compatible with European requirements for the recognition of decisions (Regulation (EU) 1215/2002).

“However, the final assessment of this question is not the responsibility of the GGL. We have informed the federal states of our assessment and are otherwise in contact with the relevant authorities.”