Why Malta Is Blocking A European Effort To Create Match-Fixing Prevention Standards

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Malta sports betting

A three-year project to adopt common standards to prevent match fixing across Europe is being blocked by Malta because it would destroy the country’s remote gaming regulatory authority.

The Council of Europe Convention on the Manipulation of Sports Competitions aims to “combat the manipulation of sports competitions in order to protect the integrity of sport and sports ethics in accordance with the principle of the autonomy of sport.”

It sets its objectives as:

Ensuring the fairness of sporting competitions is essential to the sports betting industry, and all the member nations of the Council of Europe support the convention except Malta.

The Council of Europe consists of 47 member states, including all 28 members of the European Union. The convention can only be ratified if it has unanimous approval.

The sticking point is the definition of illegal sports betting

Malta’s objection is based on only one clause in the 7,600 word convention; the definition of illegal sports betting.

The draft text issued in 2014 defined illegal sports betting as:

“Illegal sports betting” means any sports betting activity whose type or operator is not allowed under the applicable law of the jurisdiction where the consumer is located.”

The apparent blandness of the definition fails to take account of the unusual nature of the EU, where EU law has supremacy over national law.

Malta is one of the longest established international online gaming regulators. Under the Treaty for European Union, Malta holds that its licenses give operators the right to offer online gambling and sports betting in all other EU jurisdictions so long as those jurisdictions do not have a valid national law to restrict gambling.

Malta Gaming Authority Executive Chairman, Joseph Cuschieri explained the problem with the definition:

“This definition will effectively render illegal all operators who offer their services via their Malta Gaming Authority licence in other European states.”

In July 2014, Malta was so concerned over the proposals that it decided to refer the matter to the European Court of Justice (CJEU).

Parliamentary Secretary for Competitiveness and Economic Growth Jose Herrera said at the time:

“If ratified, this would mean that licensed gaming operators in Malta would be hindered from extending their operations abroad unless they abide by the laws of the other members states.”

Cuschieri added:

“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.”

The EU Parliament objects to Malta’s stubbornness

Last Thursday, September 15, the EU Parliament called on Malta not to block the convention.

Socialists and Democrats (S&D) MEP Silvia Costa said in a parliamentary question:

“Parliament stresses also that it is highly desirable for the EU and its Member States to be involved in the setting up of the monitoring system and in the development of operational cooperation within the framework of the convention as from its entry into force.”

She concluded:

“It should be noted that there is broad support from the Member States in favour of a quick entry into force of this convention, and that some are ready to ratify but are simply prevented from doing so because of EU internal procedural issues and the political opposition of one country (Malta).”

Malta will not give way on the issue

Remote gambling provides 11 percent of Malta’s GDP and employs around 8,000 people. It is not an issue on which Malta can back down. (It’s also of note that Malta is trying to lead the way on how daily fantasy sports is being treated in Europe.

Beyond the political issue there is also a legal issue as to whether the convention can be ratified legally if it contravenes EU treaties by giving national law primacy over EU law.

The EU parliament has in the past seen fit to pass resolutions that at minimum pay scant regard to EU treaties, and quite possibly ignore them completely, when issues of national interest have been involved (paywall).

The EU Parliament is not a legislative body in that its members cannot propose legislation, and its main formal power is the election of the President of the EU Commission and its ability to remove the Commission en bloc by passing a motion of censure.

Nonetheless it has considerable influence as the only directly elected institution in the EU. It can put Malta under considerable pressure, but it cannot overrule the country if it sticks to its guns.

Unless the Council accepts Malta’s demands to change the definition of illegal sports betting, Europe will lose a real opportunity to make a major change that will help ensure that sports bettors can make their wagers confident in the knowledge that they are betting on a fair game.