The Court of Justice of the European Union (CJEU), the EU’s top court, issued a major ruling on January 15 that could affect Malta’s grey market gambling model. The court observed that players can use the laws of their home country when suing operators that do not hold a local licence. The decision follows a wave of player claims in several European countries seeking repayment of gambling losses linked to unlicensed operators, most of which were licensed in Malta.
CJEU Sides with Austria in Offshore Gambling Litigation Against Malta-backed Operators: Quick Summary
- The CJEU observed that players can rely on the laws of their home country when suing operators without a local licence. The decision could weaken legal arguments used by offshore gambling hubs, including Malta, to serve players across Europe.
- The ruling came from an Austrian case involving Titanium Brace Marketing, a Maltese provider linked to SkillOnNet that is currently in liquidation. A customer sought to recover gambling losses and argued the contract was invalid because the operator did not hold an Austrian licence.
- The CJEU stated that under the Rome II Regulation, local law from the country where the damage occurred applies, which, in this case, is the player’s place of residence. The decision could encourage more players to file lawsuits, increasing pressure on Malta’s framework.
Home Country Law to Apply in Player vs Offshore Gambling Trials, Rules CJEU
The Court of Justice of the European Union, in a landmark judgement on Thursday, January 15, observed that in online games of chance, a player may rely on local laws when suing offshore operators. The ruling questions the legal approach used by offshore gaming hubs in Malta and other jurisdictions that cater to customers across Europe.
Traditionally, these hubs have relied on the EU principle of free movement of services to support flourishing cross-border online gambling industries. The top court’s decision coincides with the filing of multiple litigations in markets such as Germany, Austria, and the Netherlands.
In September, Nicholas Emiliou, an Advocate General of the CJEU, observed that players seeking compensation against offshore gaming operators in their home countries do not violate EU norms. The CJEU’s recent ruling reiterates that EU laws have been designed to protect the interests of citizens.
The court wrote:
[A] player may, as a general rule, rely on the law of his or her country of residence when bringing an action to establish liability in tort or delict on the part of the directors of a foreign provider that does not hold the required licence.
The decision was based on a case involving a customer of Titanium Brace Marketing, a Maltese provider and a subsidiary of SkillOnNet, which is currently in liquidation. The customer sued the company’s two directors in Austrian courts to recover his gambling losses.
Titanium held a gambling licence in Malta but did not have a licence in Austria, the court said. The customer argued the gambling contract was invalid and that the directors were personally responsible under Austrian law. He said Titanium offered illegal gambling in Austria, and the directors were liable for that activity.
The directors challenged the litigation, arguing that Austrian courts lacked the jurisdiction to hear it. They said the harm occurred in Malta, not Austria, and claimed that Maltese law should apply instead of Austrian law. They added that under Maltese law, company directors cannot be held responsible to creditors.
Court Says Rome II Regulation Sets the Default Rule for Where Damage Occurs
The CJEU stated that the Rome II Regulation is the relevant framework in this type of dispute. It found that, for non-contractual obligations based on tort or delict, the applicable law is usually that of the country where the damage happens. The court said the regulation also covers claims seeking director liability linked to national bans on offering gambling without a licence.
The court observed that in online gambling loss claims, the damage is “deemed to happen where the player is habitually resident.” In this case, the player lived in Austria, so Austrian law would generally apply.
The court added:
[W]here it is clear from all the circumstances of the case that the tort or delict is manifestly more closely connected with another country, the Rome II Regulation allows the court seised to depart from the general rule and to apply the law of that other country.
The ruling could have long-term repercussions for Malta’s offshore gaming sector, for which the government promised to create high-value during the 2026 budget speech. Operators in Malta are currently shielded by a local law often referred to as Bill 55, which protects B2C gaming businesses from liability related to their MGA-licensed activity.
That law has been controversial and is being challenged at the European level. The CJEU’s decision may lead to more player lawsuits across Europe aimed at recovering losses from unlicensed gambling activity. The ruling is expected to influence how future cases are argued in national courts across the EU.