Navigation of the Law and Regulation on Games and Gambling in Malta – Games
Over the last 20 years, Malta has established itself as the pre-eminent European jurisdiction for distance gambling and gambling. Malta’s success in online gambling is largely due to its legal environment. In 2001 it amended its gambling laws to take into account the possibility of gambling or gambling via remote communications and in 2004, it became the first member state of the European Union to has adopted detailed regulations for online gambling. It has continued its efforts to innovate the legal framework to keep up with industry and technological developments. In August 2018, a new legal framework was implemented to address market and technological developments and consumer trends, providing a modern, sophisticated, and robust framework for the regulation of remote-based gaming operators. in Malta or seeking to target the Maltese market. In addition, the Malta Gaming Authority (“MGA”) is constantly striving to clarify legal issues as they arise and provide much needed legal certainty by regularly issuing guidance documents.
THE ACT OF THE LOGOGUE
The Malta Gaming Act (“Gaming Act”) came into force, along with a number of regulations on August 1, 2018, replacing the previous legal regime. The result is a tiered framework: an act of Parliament, supported by subsidiary legislation and other binding and non-binding instruments that together provide flexibility in the application of the law. Obligations on gambling operators are set out in subsidiary legislation and instruments published by the MGA that allow for the amendment of more technical requirements without recourse to parliament.
LICENSE UNDER THE ACT OF LOGOGUE
The Maltese regulatory regime divides operating licenses into two classes: B2B and B2C as follows:
B2B Critical Gaming Supply License |
B2C Gaming Service License |
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These two classes of licenses apply to both remote and land-based businesses and cover the provision of different types of gaming services across various distribution channels. A second level of authorization is required for the approval of each specific gaming vertical along the individual distribution channel (eg, land-based and / or online) proposed for use under the license as follows:
B2C licenses |
TYPE 1: Home gambling, the outcome of which is determined by a random generator, including casino games (roulette, blackjack, baccarat, home poker) lotteries, side lotteries and virtual sports games;
TYPE 2: Gambling played against the home, the outcome of which is not randomly generated, but is determined by the outcome of an event or competition foreign to the game of chance, and by which the operator
manages his or her own risk by managing the odds offered to the player;
TIP 3: Gambling that is not played against the home and where the operator is not exposed to the risk of gambling, but generates revenue by taking a commission or other fee based on the stakes or prize, and includes gambling player-to-player games such as poker, bingo, betting, and other commission-based games;
TIP 4: Controlled Skill Games such as fantasy sports.
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As a result of the simplification of the license introduced by the Gaming Act, operators can bring new games to market faster and more efficiently. Operators shall notify the MGA of minor changes to their operations, such as the addition of new games to the gaming verticals of their license and the addition of a URL for the provision of the service (s). of their games. This is done through an easy-to-use online portal made available by MGA to applicants and licensees.
MGA authorization is required for changes that could cause a significant change in the licensee’s risk profile, such as the addition of a new game vertical or a new distribution channel.
Simplification of license categories has also resulted in a “single license operator” scenario, with the exception of operators offering both B2C and B2B services and those who choose to structure themselves differently. The period of validity of the license is ten years under the Gaming Act.
THE APPLICATION PROCESS
SKILL GAMES
The Gaming Act defines “gaming” as participating in a game, offering a gaming service, or conducting a gaming supply. “Gaming” covers both gambling and skill. “Skill game” refers to an activity, the outcome of which is determined solely or predominantly by the use of skill, but excluding sporting events. The MGA determines the ranking of the game based on criteria including the structure of the game and the number of variables built in a contest to delete the elements of chance. It is up to the operator / promoter of a skill game to demonstrate that they meet the criteria. The MGA also has the power to determine whether a game is a controlled game of skill, the only type of “game of skill” licensed under Maltese law. A game of skill that is not subject to such a decision does not require a license.
LICENSE FEES
The Gaming Act brought with it not only a change in license categories, but also changes in license fees and gaming taxes. The Gaming License Fees Regulations 2018 provide for: (1) a fixed license fee payable by operators each year in advance and (2) a variable monthly fee (known as the – “Compliance Contribution”) payable only by B2C operators. B2C operators are also responsible for paying a 5% tax on gross income generated by Malta-based players although the size of the market means that this does not represent a significant burden. The Compliance Contribution is calculated on the basis of the gross gaming revenue generated by the operator in question for operations carried out under its Maltese license. This has reduced costs for larger B2C operators using multiple gaming providers while creating a barrier for start-ups. They have been helped by a twelve-month moratorium on the payment of the Compliance Contribution to alleviate their financial burden at a time when they need to invest significant funds.
GROUP LICENSE
As well as an individual MGA license, a group (or “corporate”) license covering the activities of several related companies can now also be obtained, provided that each of them is established in the EU or the EEA and is owned. of at least 90%. from the same ownership.
KEY ROLE
There is now no requirement to appoint a person within the operator’s organization to the role of chief official. Now, licensees must identify those people within their organization responsible for the core business management of the operator, known as “key people.” They do not need to be resident in Malta but must be approved by the MGA and available to meet the MGA upon request. The main key functions are the following:
- the role of chief executive,
- the management of the operator’s day-to-day gaming operations, including the management of the operator’s financial obligations, the management of risk strategies and fraud prevention;
- compliance with the obligations of the operator, including obligations related to responsible gambling, player support, marketing, and sports integrity;
- the legal affairs of the operator, including dispute resolution;
- compliance with applicable data protection and privacy legislation;
- the prevention of money laundering and terrorist financing;
- operator’s technological affairs; u
- internal audit.
With regard to preemies and national lottery operators, there are additional functions that need to be fulfilled.
With amendments to the Gaming Authorizations and Compliance Directive, which entered into force in October 2021, the MGA clarified that a license applicant company must identify and be approved before obtaining the respective license, -at least the people who will be responsible for the chief. the role of the executive, the role of compliance and the role of money laundering on the application. The other roles must be appointed and approved within 6 months of the issuance of the license.
FOREIGN LICENSES
The Gaming Act allows suppliers and operators established in Malta to operate under a license issued by a regulator in another EU or EEA member state, or a third country that the MGA is deemed to offer safeguards in largely equivalent to those under Maltese law. A company holding such a license and operating in Malta must apply for a Notice of Recognition from the MGA. Once a Notice of Recognition is issued by the MGA, that foreign license has the same legal effect as an authorization issued by the MGA. A company that obtains a Notice of Recognition is also required to pay a gambling tax in Malta on the gross income generated by players based in Malta. A Notice of Recognition is also required for those licensed suppliers and operators who although not established in Malta must take up business from Malta with their EU or EEA license.
CONCLUSION
The new legal framework has provided a robust, logical and technology-neutral basis on which to regulate the gambling industries. To reach its potential, law enforcement is critical to focusing on MGA. Overall, Malta’s revision of gambling laws has been a success. It has achieved three policy objectives at the same time: (1) minimal disruption to industry; (2) a more solid and simplified legal framework, and (3) a provision for emerging technologies. Reduce red tape while increasing the supervisory effectiveness of the MGA and increase Malta’s attractiveness as a jurisdiction in which it operates.
The content of this article is intended to provide general guidance on the subject. Specialist advice on your specific circumstances should be sought.