Brussels, Jan 16: Europe’s top court has ruled that online gamblers can rely on the laws of their country of residence when suing operators that lack a local licence, a decision that could have far-reaching consequences for Malta’s grey-market gambling industry.
The Court of Justice of the European Union (CJEU) said the applicable law in such disputes is generally that of the country where the harm occurred, rejecting arguments by operators that losses should be governed by the law of the country where they are licensed or based.
In online gambling cases, the court clarified that financial losses are deemed to occur at the player’s place of residence if the operator does not hold a valid local licence there.
“If a player loses money gambling online with a company operating in an EU member state where it does not hold a license, the loss is treated as occurring in the player’s place of residence,” the court said.
The ruling could significantly undermine Malta’s long-standing offshore gaming framework, under which many operators are licensed in Malta but serve customers in other EU countries without local authorisation. Those operators have relied on Maltese legislation known as Bill 55, which shields business-to-consumer gambling companies from liability arising from activities licensed by the Malta Gaming Authority (MGA).
“Local legislation often referred to as Bill 55… shields all B2C gaming businesses from liability arising from activities licensed by the Malta Gaming Authority,” the court noted, while indicating that such protections may not prevail in cross-border disputes.
The decision follows a series of lawsuits brought by players in Germany, Austria and the Netherlands seeking to recover losses linked to gambling services that were not licensed in their home countries. A precedent-setting case from Austria played a central role in shaping the ruling.
In that case, a customer sued Titanium Brace Marketing, a subsidiary of SkillOnNet, and sought to hold its directors personally liable for gambling losses. The player argued the contract was invalid under Austrian law because the operator was offering illegal gambling in Austria, despite holding a licence in Malta.
The directors countered that Austrian courts lacked jurisdiction and that Maltese law should apply, as it does not impose personal liability on company directors. The dispute ultimately contributed to the CJEU’s broader clarification on jurisdiction and applicable law.
Legal experts say the ruling could open the door to a new wave of claims across Europe, particularly against operators active in grey markets without local licences. The decision is already facing legal and political pushback from some jurisdictions concerned about its impact on national gambling frameworks and regulatory autonomy.
For Malta’s gaming sector, a key pillar of its economy, the judgment raises fresh questions about the sustainability of its offshore licensing model in an increasingly fragmented European regulatory landscape.
