White Paper amending Malta’s Gaming Legal Framework issued by the Malta Gaming Authority

Posted on: 14 Jul 2017

Category: News

The much anticipated overhaul to Malta’s gaming regulations has finally been published. The proposed reform seeks to repeal all current legislation and replace it with a single Act of Parliament (“The Gaming Act”) together with subsidiary regulations, directives and MGA guidelines. It is expected that, as a result of this overhaul, many of the existing regulatory burdens will decrease and decision making by the MGA will become faster. Proposals include the improvement of best-in-class consumer protection standards, responsible gaming measures, risk-based approach to regulation, standards to encourage innovation and development and the further enhancement of the MGA’s  powers of compliance and enforcement. This proposed reform adopts a more progressive approach towards regulation to cater for innovative sectors.

The principal developments underpinning the White Paper’s proposals are:

  • The current multi-licence system will be replaced by a system of two licences: a B2C licence and a B2B licence.
  • For B2C licencees, a fixed licence fee of €25,000 will be payable every twelve months and a variable fee will be calculated on GGR. The fixed licence cost is welcomed by many casino operators who are, under the present model, forced to obtain several class 1 on 4 licences, pay gaming taxes and annual licence fees for each licence, and need to undergo audits for each of them. This is also welcomed by operators who offer different game verticals and offer various games to their players, such as casino, sports and poker. Under the new licencing framework these operators need only apply and hold on B2C gaming licence.
  • B2B licensees, who are game providers, will be subject to a fee ranging from between €25,000 to €35,000 per year, depending on GGR. On the other hand, providers of back-end services or control system will be subject to a fee of between €3,000 and €5,000 per year.
  • The new law promotes an objective-based regulatory approach.
  • The MGA’s regulatory scope will be widened to extend to oversight and intervention.
  • The MGA’s powers regarding compliance and enforcement will also be extended, in keeping with developments on AML and FT obligations.
  • The Key Official role will be divided into different key functions within a licensed activity, requiring approval from the MGA for direct scrutiny and targeted supervisory controls.
  • The player protection framework will be improved by the formalisation of the mediatory role of the MGA’s Player Support Unit.
  • New and more effective processes for criminal and administrative justice will be introduced, including appeals from decisions of the Authority to the Administrative Review Tribunal. (administrative and criminal offences will also be recognised separately).
  • A concept of an administration to protect distressed operations will be introduced and if required, assist in winding down the operation to protect jobs and player funds.
  • Automated reporting will be introduced, aiding in observing regulatory obligations and reinforcing the MGA’s oversight.
  • The MGA’s role in the fight against manipulation of sports competitions will be enhanced by introducing new obligations on operators to monitor sports betting and report suspicious bets.
  • The Authority is expected to take a positive view on cryptocurrencies, accepting them as a possible deposit and withdrawal option for players.
  • Taxation will be streamlined into one flow with two main layers;

(i)  B2B licensees will be exempted from gaming tax. This will increase Malta’s competitiveness as a hub for such service providers. Gaming tax previously payable as a fixed fee will be removed and will now be based on the gaming revenue generated by end customers based in Malta.

(ii)  B2C licensees will have to pay 5% on GGR derived from end customers located in Malta.

If you require any further information or wish to discuss these developments with us, you may contact us on [email protected]