Gaming companies in Malta under scrutiny: MEP Daniel Freund questions the European Commission on legality and transparency
Malta, long regarded as one of Europe’s key hubs for the online gaming industry, is once again under the spotlight in Brussels. , from the Greens/European Free Alliance group, has submitted a new to the European Commission, seeking clarity on two critical and controversial issues: the high concentration of gaming companies headquartered in Malta and the compatibility of the country’s gaming legislation with EU law.
This move comes as the formally launches an infringement procedure against Malta, challenging the legality of a recent legislative amendment seen as undermining the EU’s legal order in civil and commercial matters. Freund’s intervention comes at a time of institutional tension, with implications for both policy and the future of Europe’s iGaming framework.
Malta’s early regulatory advantage: a pioneering jurisdiction now facing competition
To understand the current concentration of licensed operators in Malta, it is essential to reflect on the country’s historical role. Malta was among the first European jurisdictions to establish a dedicated regulatory framework for online gambling. In a period when most EU Member States lacked clear rules – or adopted highly restrictive stances – Malta offered legal certainty, transparent licensing procedures and a robust institutional structure.
This regulatory advantage has attracted hundreds of European companies, leading to a significant concentration of operators holding a Maltese licence (there are currently 321 companies authorised in Malta). It was this foresight that laid the foundations for Malta’s emergence as a global leader in the iGaming sector. The current concentration of companies in the country is, therefore, not arbitrary, but the result of a long-term policy vision. However, this position of leadership now faces scrutiny. MEP Freund argues that such a high level of concentration may raise questions about competition, market fairness and the alignment of national legal frameworks with common European principles.
The MEP’s questions: EU funds and procedural transparency
In his official parliamentary question, Freund asks whether any gaming companies based in Malta have received EU funding – whether through direct channels or indirectly via intermediary bodies or national programmes.
He also questions why the Commission took almost two years to complete its legal assessment of Malta’s controversial gaming law amendment – commonly referred to as “Bill 55”. Freund demands full transparency, including access to written exchanges between the Commission and Maltese authorities, in order to shed light on the delay and the legal reasoning involved.
The legal controversy: Article 56A and Bill 55
At the heart of the dispute is a legislative amendment introduced in 2023, known as Bill 55, which added Article 56A to Malta’s Gaming Act (Chapter 583). This provision allows Maltese courts to reject the enforcement of foreign judgments related to disputes involving licensed gaming operators, where such judgments are deemed incompatible with Malta’s public policy.
According to the European Commission, this directly undermines mutual trust between national judicial systems and violates Regulation (EU) No. 1215/2012 – commonly referred to as Brussels I Recast – which guarantees the free movement of civil and commercial judgments across the EU. Brussels argues that Malta is misusing the “public policy exception” as a blanket shield for its licensed operators, inappropriately blocking cross-border litigation.
Malta’s position: defending its model and its role within the EU
In response to the infringement proceedings, the has issued a firm rebuttal. It insists that Bill 55 merely codifies a long-standing public policy approach already recognised under EU law. The MGA stresses that the provision does not prevent individuals from initiating legal action against licensed operators, either in Malta or abroad, nor does it block EU judgments wholesale.
Malta maintains that its gaming framework is fully consistent with European values, particularly the freedom to provide services and the freedom of establishment. The country’s “point-of-supply” model enables operators to provide gaming services across borders, subject to compliance with Maltese regulations and overarching EU principles. From the Maltese perspective, the Bill was necessary to protect the integrity of its legal system and licensed operators from what it views as unfair litigation, often brought by jurisdictions with more restrictive or ideologically driven approaches to gambling.
Cross-border litigation and emerging legal challenges
The legal backdrop to this controversy is a rising wave of lawsuits filed in countries such as Austria and Germany. Several national courts have ordered licensed foreign operators to reimburse player losses, ruling that those companies lacked proper authorisation under domestic law.
This trend has given rise to a new legal services industry across the EU, offering players free advice, litigation funding, and compensation schemes based on a growing body of favourable rulings. In response, Malta sees the Bill 55 amendment as a necessary countermeasure to ensure legal certainty for its operators and to defend its economic interests.
Legal scrutiny and regulatory leadership in the balance
MEP Freund’s intervention highlights a broader shift in Europe’s regulatory environment. The question is not simply whether a particular clause complies with EU law, but how Member States can maintain regulatory autonomy in a market that is increasingly integrated, digital and subject to cross-border enforcement.
Malta’s early leadership in this sector is now under pressure—not only from rival jurisdictions but also from legal developments at the EU level. Yet, the concentration of gaming companies in the country should not, in itself, be a cause for suspicion. Rather, it reflects the success of a regulatory framework that has served as a model for two decades.
What is at stake today is Malta’s ability to demonstrate that its approach remains both legitimate and aligned with the evolving legal and political landscape of the European Union.
What lies ahead: potential consequences and broader implications
Malta has until mid-August to respond to the Commission’s formal notice. If its explanation is deemed insufficient, the Commission may proceed to the next phase of infringement proceedings: issuing a reasoned opinion and, ultimately, referring the matter to the Court of Justice of the European Union (CJEU).
The outcome could have far-reaching consequences – not only for Malta’s legal framework, but for the future of regulatory diversity within the EU’s internal market. A ruling against Bill 55 could force Malta to revise or repeal the provision, exposing licensed operators to cross-border legal risk. Conversely, a favourable outcome for Malta would reaffirm the principle that Member States retain discretion to shape their public policy in sensitive sectors such as gambling.
Regulation, sovereignty and the future of gaming in Europe
Daniel Freund’s parliamentary question underscores the delicate balance between national sovereignty and supranational governance in the regulation of gambling. At the heart of the debate is Malta’s ability to defend a pioneering model that has enabled it to become a global iGaming leader, while ensuring compliance with EU law and institutional cooperation.
The months ahead will be pivotal. The European Commission’s next move – and any subsequent ruling by the Court of Justice – could redefine the boundaries of regulatory autonomy and judicial cooperation in Europe’s digital single market. What began as a question about gaming licences may ultimately determine how Europe governs one of its most dynamic and contested industries.
This article was first published in Italian on 15 July 2025.
