Article 56A In Action: Malta’s Public Policy Shield Confirmed By The Courts – Gaming

A recent judgment of the Maltese courts has delivered the first
clear judicial endorsement of Article 56A of the Gaming Act,
confirming Malta’s position on the non-recognition of foreign
judgments that undermine the validity of gaming services provided
under a 
Malta Gaming Authority (“MGA”) licence.

Brief Overview

The case arose from an Austrian judgment ordering an
MGA-licensed operator, Virtual Digital Services Limited, to refund
approximately €488,000 to an Austrian player. The Austrian
court concluded that the operator’s services were unlawful
under Austrian gambling law because the operator did not hold a
local licence. The claimant sought to have that judgment recognised
and enforced in Malta under Regulation (EU) 1215/2012. The Maltese
operator resisted recognition, relying, among other grounds, on
Article 56A of the Gaming Act. The Court accepted this defence and
refused recognition.

Article 56A Applied

Article 56A, introduced in 2023, establishes as a matter of
Maltese public policy that courts must refuse to recognise foreign
judgments which negate the legality of gaming services lawfully
provided under an MGA licence.

The Court rejected arguments that Article 56A could not apply to
proceedings commenced before its enactment, holding that procedural
rules apply immediately to pending cases where no vested rights
have crystallised.

It also dismissed the contention that activities prohibited
under foreign law cannot qualify as legitimate under
“regulatory instruments” for the purposes of Article 56A.
The Court confirmed that the relevant regulatory instruments are
those forming part of Maltese law and MGA regulation – not foreign
gambling legislation.

No Conflict with EU Law

Importantly, the Court distinguished earlier cases in which
Article 56A had been disapplied. Those decisions concerned a
different EU regulation that contains no public policy exception.
By contrast, Regulation 1215/2012 expressly allows Member State
courts to refuse recognition on public policy grounds.

Since Article 56A operates squarely within that exception, the
Court found no conflict with EU law and no basis to disregard the
provision.

The existence of infringement proceedings initiated by the
European Commission against Malta was also held to be irrelevant.
Until ruled otherwise by the Court of Justice of the European
Union, Article 56A remains valid law and must be applied.

The Underlying Principle: Free Movement of Services

The Court grounded its reasoning in substance rather than form.
It identified the right of MGA-licensed operators to provide
services across the EU under Article 56 TFEU as a fundamental
element of Malta’s legal order.

Recognising a foreign judgment that strips effect from rights
conferred by Maltese law was held to constitute a manifest breach
of Maltese public policy. The Court stressed that it was not ruling
on the compatibility of Austrian gambling law with EU law, but on
Malta’s obligation, or lack thereof, to enforce regulatory
choices that negate its own licensing regime.

Beyond Article 56A

Recent jurisprudence shows that Article 56A is not the sole
basis upon which Maltese courts are refusing to recognise Austrian
player recovery judgments.

In a separate January 2026 judgment, the Maltese courts reached
the same conclusion by relying directly on EU law principles and
the public policy exception in Regulation 1215/2012, without
invoking Article 56A at all. That analysis focused on the primacy
of EU law, the free movement of services, and the validity of
licences issued by the MGA.

The Court also noted structural inconsistencies in the Austrian
regulatory framework and highlighted the conceptual contradiction
inherent in player recovery claims that allow losses to be
reclaimed while winnings are retained from the same allegedly
unlawful activity.

Conclusion

Maltese courts have now articulated a clear and consistent
position. Foreign judgments that fundamentally undermine the
legitimacy of Malta’s gaming licensing framework will not be
recognised or enforced. Article 56A provides a statutory basis for
this outcome where Regulation 1215/2012 applies. Independently of
that provision, Maltese public policy, which is rooted in EU law,
constitutional principles, and the free movement of services, leads
to the same result.

While EU infringement proceedings remain pending, the current
judicial approach offers clarity and legal certainty for
MGA-licensed operators operating cross-border from Malta.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.