Malta has a nascent yet established industry concerning the online betting and casinos. In the past years this has been developed to become the envy of other EU states. With the enactment of the Lotteries and Other Games Act, 2001 this saw the start of a comprehensive legislative instrument thereby providing the necessary tools to implement effective regulation. The authority is responsible for the governance of all gaming activities in Malta including Amusement Machines, Broadcasting Media games, Casinos, Commercial Bingo Halls, Commercial Communication games, Horse racing, the National lottery, Non-Profit games and Remote Gaming. I took the liberty of entering the LGA website and downloaded its latest published accounts. The figures for 2007 showed a healthy revenue generation of eur 34,726,636 out of which it passed a net contribution to government, the hefty sum of €32million. This is a substantial contribution which no doubt has increased exponentially in 2010 when over 350 licences are now in play. All these licences are offering cross -border services to mainly European countries and include electronic slots, poker, bingo ,casino games and sports betting. Since the growth of this industry there has been a number of legal cases brought up by other E.U member states who protested against the incursion of Malta based companies offering betting services when the host country has its own national gaming monopoly. One can mention the ZeTurf case which involved a French owned horse betting company licensed in Malta mainly targeting French bettors. The French State regulator of horse betting PMU took the ZeTurf to court in a famous case which ended up with the Malta company having to obey the French ruling and close its site in Malta. Due to technical legal manoeuvring the decision to close down the site and to fine Bell Med its ISP could not be executed in the Malta courts following an appeal by ZeTurf. Naturally Malta insists that the provision of cross border gaming services over the internet should be protected by articles 43 and 49 of the E.U Treaty. This in brief provides for free and unrestricted provision of services in the single market. Obviously some E.U countries resist competition and have taken an active role to criminalise what they consider as unauthorised intrusion in their markets. There has been a string of important cases which ended up being decided at the European Court of Justice.
The ECJ has issued various decisions covering the provision of gaming services establishing for instance, in 2008 the Placanica case concerning an Italian court case which attempted to apply criminal charges to operators who abetted in the taking of online bets with a UK licensed online casino. In this case the ECJ ruled that national licensing procedures cannot be applied in a de facto discriminatory manner against foreign gaming operators. Another important case in Italy featured an operator in the Gambelli case, where the ECJ ruled that Articles 43 and 49 of the EC Treaty applied to gaming services. It is interesting here for the Malta based operators to note how in the Placanica case, the ECJ ruling emphasizes that regulation cannot be a smokescreen for discriminatory monopolistic practices mainly aimed to safeguard the national coffers. However, national governments still have considerable latitude to determine how and when to regulate the gaming sector, provided that measures to maintain public order such as the control of under –age gaming and money laundering aspects ( refer to the Liga Bwin –case ) . However the ECJ found in some instances that the measures taken by national governments which mainly aimed to protect their monopolies have not been enacted proportionately to the perceived social ills associated with gambling.
Countries such as Italy, France, Netherlands, Germany and Scandinavia countries have traditionally wielded a strong stance against the intrusion by foreign operators licensed in third countries and took immediate legal measures to stop them. On the other hand the Commission has warned such countries to lower their resistance to competition and a number of infringement notices have been issued. Again ECJ rulings continue to push the EU for equitable treatment between the member states. One expects that, as many EU states with quasi monopolies to protect and overdrawn budgets to maintain ( as we do in Malta ) , the result often ends up seeing Malta licensed operators being sued for entering their markets. One of the gambling companies which are licensed and regulated in Malta is the bet-at-home. Its offices in Austria were originally established in Wels (Austria) in 1999 by founders Messrs Jochen Dickinger and Franz Oemer.
The range of products has been extended to include dog racing, games, online casino and online poker. Customers can place bets by telephone or via the Internet. Last year it was sold to the Mangas gaming group, a prominent French enterprise in the range of online gaming and sports betting, run by Isabelle Parize, to which three other Malta licensed companies form part namely Betclic, Expekt and Everest Gaming. Back to Bet –at-home we note that the company is active in more than 25 countries . Regrettably its founders were prosecuted in Austria on 31 August 2009 (case C-347/09) .In fact criminal proceedings were initiated against Jochen Dickinger, and Franz Ömer concerning illegal gambling by an Austrian gambler who had lost 16.000 Euro within only 18 hours of playing on the site. The prosecution in Linz (Austria ) brought charges against the founders of bet-at-home, stating that the company violated the gambling regulations in Austria. Another charge has been instigated against Bank Austria Creditanstalt, because on its online banking website there was a link to the bet-at-home website. All this resulted since in Austria there are no licenses for online gambling operators and all licences are patronised by the State owned organisation Casinos Austria. This is the exclusive entity which is allowed to offer games of pure chance to Austrian citizens. It has been reported that the authorities had executed a search warrant at bet-at-home in Linz and allegedly found servers, on which games were be running. Naturally the company rebutted such claims and a decision is expected to be taken at an appeal level in the coming months. Commentators say that such a criminal charge is based on complete disregard to article 49 .It comes as no surprise that the EU initiated an infringement proceeding against Austria and one hopes that this will lead to a case being heard at the highest European Court of Justice later on this year. One can stop and question whether such a prohibition is justified for reasons relating to the public interest when in Austria rules a quasi-monopoly itself is actively pursuing a policy of expansion of games of chance, and employing intensive advertising .
Another recent case concerning a Malta registered company was that of Winner Wetten, a company located in Germany, accepting bets on behalf of an online betting service from servers based in Malta. It happens that this case involves an action in court in Cologne (Germany). The Court in Cologne asked whether the German Unified lander treaty banning remote gambling from foreign operators is compatible with the freedom of establishment and freedom to provide services provisions enshrined in the EU Treaty. The Cologne court considered North Rhine-Westphalia´s law on sports betting in force in 2006 to be inconsistent with the freedom to provide services as interpreted in the Gambelli ruling. In a positive move towards de-regulation one welcomes Advocate General (AG) Bot preliminary opinion in this case which is now standing before the Court of Justice of the EU. To conclude , this recent opinion confirms that the primacy of EU law over national gaming legislation does not allow for any exception or transitional period. Malta based operators will be pleased to hear that member States therefore have to cease from applying national gaming legislation that is not consistent with EU law.
