29 October, 2024

Company profile: Soft2Bet

Bill 55: Advantages and challenges for Maltese operators in the EU

Ohad Straschnov, Senior Compliance Director at Soft2Bet, explains how Bill 55 impacts Malta and the operators licensed on the island, and how Soft2Bet has addressed European regulation in some of the continent’s key markets over the past 18 months.  

The core of Bill 55

Malta’s Bill 55, introduced in June 2023, seeks to safeguard Malta’s gaming industry; a significant contributor to the country’s economy. The bill stipulates that judgments from foreign courts against Maltese gaming operators will not be recognised or enforced in Malta if they relate to legal activities under Maltese law. This provision directly addresses cases where operators face legal actions in other EU member states for offering online gambling services, which may be illegal or restricted in those jurisdictions. However, this legislation has drawn criticism and raised significant legal and operational challenges for Maltese operators within the European Union. 

Advantages of Bill 55 for Maltese operators

Bill 55’s primary advantage is the legal shield it provides Malta-licensed operators. While local courts will not recognise or enforce foreign judgments, operators can avoid significant fines or penalties from other EU countries. Secondly, Malta’s reliance on the EU’s free movement of services is reinforced under Bill 55. The bill allows operators to continue serving players across EU markets without fear of legal retaliation in each jurisdiction. This provides a legal foundation for cross-border services as long as operators comply with Maltese regulations. By insulating operators from legal threats across the EU, Bill 55 creates a stable environment for iGaming companies to grow. 

While Bill 55 offers protection within Malta, it does not shield operators from legal actions or financial penalties imposed by other EU states. This creates a complex legal landscape for Maltese operators, who must navigate conflicting regulations across different jurisdictions. 

Challenges brought by Bill 55

While Bill 55 offers numerous benefits, it has also attracted attention from the European Commission. Various EU countries argue that the bill undermines EU Regulation, which mandates the mutual enforcement of court rulings across EU member states. If the European Commission finds Bill 55 in breach of EU law, Malta could face demands to revise or revoke the legislation, exposing operators to foreign legal actions. 

Should EU member states challenge Bill 55, there is a risk that the issue could escalate to the European Court of Justice (ECJ). A ruling from the ECJ against Malta would likely weaken or nullify the protections offered by Bill 55, leaving operators vulnerable to penalties from foreign jurisdictions. 

Soft2Bet’s stance 

Bill 55 offers substantial advantages for Maltese operators. However, it also poses significant legal and operational challenges for Maltese operators in the EU. It remains to be seen how well operators can navigate these challenges, adapt to a rapidly changing regulatory landscape and contribute to ongoing dialogue on the future of online gambling regulation in the EU. 

The challenges posed by Bill 55 highlight the broader issue of the fragmented regulatory landscape for online gambling in the EU. There is a growing call for more harmonised regulations at the EU level to reduce conflicts between national laws and ensure a more consistent legal framework for operators across the EU.

It’s important to remember that Matla is a tier-one iGaming jurisdiction that offers a stable political and legal framework for operators and providers. However, as the European Commission and EU member states continue to call for a review of the Bill, Maltese operators will need to remain adaptable and proactive in responding to the evolving regulatory environment. This may involve diversifying their markets, investing in compliance infrastructure and engaging with policymakers.

Meanwhile, Soft2Bet keeps a close watch on these developments and will maintain its substantial presence in Malta. At the same time, we have also significantly expanded our regulatory footprint in the past few years, obtaining licences in various key EU markets such as Greece, Sweden, Denmark, Italy, Romania and others. Soft2Bet remains fully committed to maintaining a robust and comprehensive compliance strategy across all the markets in which we operate. By adhering to regulatory frameworks and industry standards, we ensure that our operations are not only fully compliant but also promote trust and integrity. 

This approach means we were able to quickly expand and launch B2C brands such as Betinia, Winota, Cadabrus, Light Casino, Yoyocasino and Campobet in highly regulated countries. This approach also goes hand in hand with our turnkey solutions for B2B partners. It enables swift expansion and launch into new markets, ensuring they are up and running within optimal timeframes.