The intersection of national gambling regulations and European Union (EU) law remains a contentious legal battleground, as demonstrated by two recent court cases in Maltese Law Courts: TSG Interactive Gaming Europe Ltd vs. Gerhard Posch and European Lotto and Betting Ltd vs. Philipp Wahl. Both cases revolve around the enforceability of Austrian court judgments in Malta, raising significant legal questions about jurisdiction, recognition of foreign rulings and the enforcement of an EU judgement that goes contrary to public policy, and the principle of free movement of services under Article 56 of the Treaty on the Functioning of the European Union (TFEU).
TSG Interactive Gaming Europe Ltd vs. Gerhard Posch
The case centered on whether the Austrian court decisions, which ruled that gambling losses incurred by Posch should be refunded, could be enforced in Malta. TSG Interactive made three main legal arguments which centred around the jurisdiction & recognition of foreign judgments, the inability to enforce a judgement that goes contrary to public policy and had other regulatory considerations.
The company argued that under Brussels I Regulation (EU) 1215/2012, the Austrian courts lacked the authority to impose rulings affecting a Malta-licensed operator. Procedural violations were cited, particularly regarding Regulation (EC) 1393/2007 on the proper service of judicial documents across EU member states. TSG contended that enforcing the Austrian judgment would undermine Maltese order public by violating EU principles of service provision. It argued that Austrian gambling law, which restricts cross-border gaming services, contravenes Article 56 TFEU and prior European Court of Justice (ECJ) rulings on market access. Finally, the company highlighted that its gambling services were licensed under the Malta Gaming Authority (MGA), meaning any legal disputes should fall under Maltese jurisdiction. The company also provided the terms and conditions binding players to Maltese law and courts were presented as evidence of contractual adherence.
European Lotto and Betting Ltd vs. Philipp Wahl
The European Lotto case mirrored the arguments made in TSG Interactive, with the company objecting to an Austrian ruling allowing Wahl to reclaim gambling losses. The arguments presented were highly similar to the TSG Interactive case.
European Lotto challenged Austria’s restrictive gambling framework, arguing that it created an unlawful monopoly inconsistent with EU law. European Lotto argued that Austria’s restrictions effectively amounted to a de facto monopoly, with the state exercising excessive control over the gambling market without applying its laws in a consistent and non-discriminatory manner. The company asserted that Austria’s enforcement measures selectively targeted foreign operators, while local monopolies expanded their services through aggressive advertising, contradicting their stated consumer protection objectives.
Furthermore, the court examined whether Austria’s gambling regulations met the test of proportionality under EU law. European Lotto submitted that the Austrian framework failed this test because it did not strike a fair balance between protecting consumers and allowing fair competition. This argument aligned with prior ECJ rulings, where restrictions were upheld only when they genuinely addressed gambling-related harm rather than serving as a means of economic protectionism.=
The claim referenced case law, including Gambelli (C-243/01) and Placanica (C-338/04), which affirm that national restrictions must be proportional and systematically enforced. In Gambelli, the ECJ ruled that national restrictions on gambling services could only be justified if they genuinely pursued consumer protection or fraud prevention in a systematic and coherent manner. Similarly, in Placanica, the ECJ reiterated that a licensing regime that imposes unjustified restrictions on cross-border operators violates EU law unless it can be demonstrated that the restrictions serve legitimate public interest objectives proportionally.
The company underscored its MGA licensing, asserting that it fully complied with EU gambling regulations. The Austrian court’s decision was criticized for failing to consider the legitimacy of a Malta-licensed operator providing services across the EU.
Court Decisions and Rationale
The Maltese court approached the case by analyzing the procedural compliance of the Austrian judgment and its compatibility with Maltese and EU law. The ruling emphasized two primary considerations: procedural fairness and adherence to EU free market principles.
First, the court scrutinized whether the service of judicial documents had been conducted in line with Regulation (EC) 1393/2007. The court found significant procedural deficiencies, particularly the failure to ensure proper notification in compliance with EU law. This procedural defect alone provided sufficient grounds to reject the enforcement request.
Second, the court examined the substantive legal conflict between Austrian gambling laws and the principles of the free movement of services under Article 56 TFEU. The Austrian gambling framework, which imposes strict limitations on foreign operators, was found to be disproportionately restrictive and inconsistent with ECJ jurisprudence. The court referenced the Gambelli and Placanica rulings, reaffirming that national restrictions must be systematically applied and proportionate to their objectives. Since Austria’s restrictions on foreign gambling operators did not satisfy these criteria, the court held that recognizing the Austrian judgment would violate Maltese public policy.
In European Lotto and Betting Ltd vs. Philipp Wahl a similar ruling was reached, with the Maltese court determining that the Austrian judgment clashed with fundamental EU principles. It emphasized that the Austrian regulatory framework did not satisfy the proportionality and systematic enforcement standards required under Gambelli and Placanica.
Additionally, the court reinforced the importance of protecting the single market and preventing undue national restrictions on cross-border service providers. The ruling stressed that Austria’s gambling restrictions amounted to an unlawful monopoly and failed to demonstrate a coherent application of consumer protection justifications. The court’s analysis relied on previous ECJ decisions, noting that regulatory measures restricting cross-border services must be consistently enforced and proportionate to their objectives.
By emphasizing these principles, the Maltese court upheld the supremacy of EU law, asserting that national measures that contravene the free movement of services cannot be enforced across borders.
Conclusion
These cases reaffirm the growing legal tension between national gambling laws and the EU’s market freedoms. By rejecting the enforcement of Austrian judgments, the Maltese courts have reinforced the primacy of EU law over national restrictions that hinder cross-border service provision. The rulings also highlight the necessity for a more harmonized approach to online gambling regulation within the EU. As gambling-related litigation increases, the European Commission may need to revisit its stance on the compatibility of national gambling frameworks with EU legal principles.
Moving forward, these decisions may influence other EU courts facing similar disputes, setting a precedent for the protection of licensed operators within the single market. For industry stakeholders, the rulings provide reassurance that national restrictions inconsistent with EU law will not easily be enforced in other jurisdictions.
About the Author
This article has been authored by Dr Jeremy Mifsud Bonnici, Legal and Business Advisor.
