This story is part of an investigation led by Investigate Europe, a journalism team which produces cross-border investigations. The project is being published with media partners in 10 countries, including Amphora Media (Malta), ARD (Germany), Delfi (Estonia) Die Zeit (Germany), EU Observer (Belgium), Il Fatto Quotidiano (Italy), InfoLibre (Spain), Irpi Media (Italy), the Observer (UK), Partizan (Hungary), Reporters United (Greece) and RTP (Portugal).
The world’s biggest gambling companies are using a little-known Maltese law, that nullifies court verdicts elsewhere in the European Union, to protect themselves from potentially having to pay out millions in legal claims.
Under a law known as Bill 55, Maltese courts can “refuse recognition and, or enforcement” of any foreign judgment involving companies registered on the island — namely, the scores of betting companies based there thanks to an already favourable corporate climate.
The law effectively shields owners of brands such as Pokerstars, Betsson and Unibet from judgements handed down abroad, of which there are an increasing number. Lawyers told Investigate Europe that Bill 55, described by one as a “sledgehammer”, violates EU law and is preventing thousands of successful claims issued in European courts from being paid out.
Crossborder gambling claims are on the rise in the EU, and Malta-based companies are the target of many complaints. “The amount of gambling losses being reclaimed all over Europe probably will, sooner or later, total €1bn,” said German lawyer Benedikt Quarch, whose firm is working on thousands of cases.
Given the stakes, pressure is now mounting on the European Commission to challenge the Maltese regulation, in place since 2023. Austria’s highest court, meanwhile, has urged the European Court of Justice (ECJ) to intervene and rule whether the Maltese regulation breaches EU law.
Authorities there and in Germany, Sweden and the Netherlands are dealing with a deluge of consumer complaints about illegal gambling, mainly around websites operated by Malta-based firms that national courts have assessed are unlicensed in their countries.
There are an estimated 50,000 ongoing claims in Germany and Austria alone, lawyers told Investigate Europe. Law firm G&L Legal in Vienna is itself dealing with over 15,000 cases, many concerning industry heavyweights in Malta.
Karim Weber is spearheading the firm’s work in the area. Austria’s Supreme Court has to date found in favour of his clients in hundreds of cases involving Malta-based companies. But Malta’s courts are yet to recognise any of the more than 200 cases the lawyer has asked them to enforce, leaving his clients — and the law firm — out of pocket.
Weber has claims totalling €18 million in cases involving only Flutter, the world’s largest online betting company, he said. Austria’s top court ruled in August 2021 that Weber’s client should be paid back all losses they had accrued on the Pokerstars site as its owner, TSG Interactive Gaming Europe, a Flutter subsidiary in Malta, did not have a national licence to operate in the country.
All transactions between players and the company were invalid, the court found, as Austrian law deemed Pokerstars was operating illegally. “If the contract is illegal, it is null and void,” Weber said. “It is the same as if you were to sell me two kilos of cocaine today. The contract would be null and void under civil law.” Flutter has disputed such verdicts and denies any wrongdoing.
Yet when the civil court in Malta was asked to enforce the ruling, judge Toni Abela, who spent much of his career in politics and was a former deputy leader of Malta’s Labour Party, denied the request in July 2023. The decision came weeks after Bill 55 was ushered through its parliament. The law was described by the government as part of a longstanding policy of “encouraging the establishment of gaming operators”.
“It was like a sledgehammer,” Weber recalled. “It was pushed through the Maltese parliament in three weeks with the consent of the opposition.”
Weber and Quarch have lobbied the European Commission to intervene. But despite writing a complaint back in 2023, the commission has so far only responded saying it is “assessing” the information.
The same answer was given to the German MEP Sabine Verheyen, a rare critic of the sector in Brussels, in April 2024. “I reproach the commission for not acting adequately. I think it is important for the commission to really do justice to its role as guardian of the treaties.” Investigate Europe got a similarly vague response for this article.
The apparent inaction reflects a general inertia around gambling in Brussels. There are no European laws governing the sector, in 2017 the commission decided to close a dedicated ‘Gambling Unit’ it had set-up, while a 2021 letter sent by 13 European regulators calling for common policies was quietly dismissed.
Austria’s Supreme Court, however, is hoping the ECJ will take action on Bill 55. In October 2024, Austrian judges sent a formal request to the top EU court, claiming that Malta’s failure to recognise its judgements breached EU law.
Miguel Poiares Maduro, a former advocate-general at the ECJ, agrees, saying the commission should take legal action against Malta for failing to uphold EU law, with a so-called infringement procedure.
“EU law establishes the principle of mutual recognition between member states on judicial decisions,” he said. “It’s not up to the Maltese to define when their courts may not implement a decision from another member state.”
Under European law, any citizen can sue a company that was selling illegal services in one country in the courts where the ”harmful event occurred”. Online gambling, provided by companies that don’t have a license, is such an “harmful event”.
He finds it hard to explain to clients that despite winning their cases they are unlikely to get their money back. “There are definitely thousands of people affected by Bill 55 because it's a majority of the companies domiciled in Malta which do not pay.” He says there are around 20,000 active claims related to illegal gambling in Germany, while numbers are growing in the Netherlands and Sweden.
Across the EU, an estimated 70 percent of web-based betting was illegal by mid-2024, with 6,000 unlicensed providers targeting the region, according to Yield Sec, a marketplace analysis firm. H2 Gambling Capital, another consultancy, reckons the illegal share is more around 20 percent.
Methodologies differ, but the scale is alarming.
The possible financial implications of Bill 55 are not lost on Malta’s gambling industry, which accounts for around 12 percent of the country’s economic output.
“If a material proportion of player claims were successfully enforced either in Malta or any other jurisdiction, it could have a material adverse effect on our business,” wrote Flutter, whose brands also include Sky Betting and Paddy Power, in its latest annual report.
Betsson has described its “vulnerability to customers claims” while Kindred, which operates Unibet, said Bill 55 is “particularly important considering the increasing number of customer litigations in and subsequent enforcement efforts by Germany, Austria and the Netherlands".
The Maltese government and gambling regulator refused to be interviewed for this story.
Operators argue that as they are already registered in one member state – Malta – they have the right to operate in all EU states. In response to Investigate Europe, Flutter said Pokestars operates legally from Malta and with the “freedom of services across member states under EU law.”
“The court decisions being made under Austrian law are incompatible with these settled EU legal principles, which has been confirmed by the Maltese court in its judgment of 27 February 2025. As such, Pokerstars will continue to vigorously defend these cases in Austria and when brought before Maltese courts,” a spokesperson added.
'The industry does not want to be regulated by Europe, because Europe would be a lot stricter than national governments' - ex-CEO of Paddy Power
Some national laws say the opposite: a company must be licensed domestically, and pay taxes, to be able to operate.
This partly explains the opposing interpretations of Bill 55. It is amplified by the lack of EU-wide regulations.
Stuart Kenny, the founder and former CEO of Paddy Power, regrets not having pushed for more stringent control during his former job. But the industry is quite happy with the status quo, he says.
“The industry does not want to be regulated by Europe, because Europe would be a lot stricter than national governments. National governments are as addicted to the tax revenue as the addicts are addicted to online slot machines,” said Kenny from his home in Dublin.
“It is utterly preposterous that the EU has got involved in so many other health issues and rightly so but gambling has an opt-out.”
The absence of cross-border laws has created a patchwork of national policies across the bloc.
Finland has a state monopoly, and bans foreign providers from targeting its citizens. In Greece, the liberalisation of the market resulted in a private monopoly. Portugal, Spain, France, Italy and Germany try to authorise and tax licensed companies — and ban those who are not.
But it’s not always easy. Between 2021 and 2024, Spanish authorities fined 77 companies for illegal gambling activities – 75 were based abroad. Most in Curaçao, another tax-friendly jurisdiction favoured by the industry. The fines issued to the foreign-based firms totalled €350 million, but none have yet been paid, the government’s transparency portal indicates.
Within the EU, states like Malta, along with Cyprus and Estonia, meanwhile, actively try to attract companies through favourable legislation and low taxes.
“When we look at casino operators working offshore jurisdictions, place number one is Malta,” Quarch said. “So the illegal online gambling market from my point of view is a very interesting and unfortunate example of how law enforcement in Europe does not function.”
Additional reporting by Eurydice Bersi, Manuel Rico, Maria Maggiore and Marta Portocarrero.
Paulo Pena, Harald Schumann, Maxence Peigné are journalists at Investigate Europe.
Paulo Pena, Harald Schumann, Maxence Peigné are journalists at Investigate Europe.