Jul 17 / 2014
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Malta contests ECJ’s definition of illegal betting

Announcement was made recently by parliamentary secretary for competitiveness and economic growth Jose Herrera that Malta would be contesting the ruling of the European Court of Justice over the Council of Europe’s draft convention on sports competitions. The convention stated that illegal bets in sports should be those bets considered illegal by a country’s consumer legislation. Malta feels that this definition of illegal betting “hinders the free movement of services within the EU.”

Parliamentary Secretary Jose Herrera said that Malta agrees with the aims of the convention which were primarily to combat manipulation yet he feels that  “this definition would inevitably influence Malta’s gaming sector, and consequently Malta is seeking the ruling of the ECJ because if ratified, the new definition would hinder the free movement of services” .

The draft convention describes as “any sports betting activity whose type or operator is not allowed under the applicable law of the jurisdiction where the consumer is located.” which the Council of Europe is set on changing. The Council of Europe sources were quoted as stating this definition is  an “inappropriate encroachment into the Maltese betting industry”.

Herrera is concerned that if this draft is ratified it could lead to licensed Maltese operators being limited from extending their operations abroad unless they abide by the laws of the other member states.

If the ECJ declares that the draft convention is not compatible with EU laws – namely the free movement of services and the free market– the Council of Europe would be prohibited from ratifying the convention unless it is amended.

Insisting that Malta’s reservations focus solely on the definition of illegal sports betting – and not the objectives of the council – Herrera argued that due to the fact that Malta’s reservations were not addressed in the Convention, the government will seek the ECJ ruling.

LGA chairman Joseph Cuschieri also stated that the interference in sports betting by this convention is “unacceptable” and he stated that the LGA will not allow anything to interfere with growing Malta’s gaming sector.  “Ever since Malta implemented rules on remote betting, in line with the laws regulating the free market an operator registered in Malta could operate across Europe with one licence, that of the LGA.

Since the financial crisis, countries have been intent on implementing certain licence frameworks to tax these gaming operators. These frameworks are basically saying that even though a gaming company has a licence in Malta, it would need another licence to operate across Europe.”

Dr Herrera advised that Malta also sought legal expert advice on the matter at hand. In May, Malta had moved proposals for the disposition to be amended. It had clearly stated its intentions throughout negotiations and even sent explanations to the European Commission in writing. However, the definition stayed in the same format.

He said the country’s objections were three – that the definition related exclusively to licencing and operator regulation, which was not the aim of the convention, that the definition went against EU treaties and regulations on free movement of services, and that the definition would harmonise industry regulations at a European level when the EU had no such regulations and this could impact on future EU regulations in the sector.

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