Chambers Global Practice Guides – Gaming law 2024

Authors: Andrew J. Zammit & James Bartolo

Introduction

Current Outlook and Recent Changes

Provide a summary of current and expected sector developments. Highlight any recent trends that have impacted the market in your jurisdiction, for example, increased enforcement action, consumer protection, personal accountability of management, blockchain or cryptocurrency.

The regulatory framework applicable to online and land-based gaming in Malta is consolidated under the Gaming Act (Chapter 583 of the Laws of Malta) and Subsidiary Legislation (SL) 583.01 to 583.12, adopted under that law. The SL addresses various aspects of gaming operations, including the following:
• the establishment of the Malta Gaming Authority (MGA), its functions and powers;
• the protection of players, minors and vulnerable persons;
• the establishment of a vulnerable gaming fund;
• gaming licence fees;
• the requirement of a licence or authorisation for certain gaming activities;
• key functions;
• compliance and enforcement;
• regulations relating to gaming premises;
• regulations relating to advertisement;
• regulations governing gaming tax;
• the establishment of a social causes fund; and
• data retention.

The MGA issued several directives between 2018 and 2020, which are binding on licensees, providing additional guidance in relation to the interpretation and implementation of the laws and regulations. Additionally, the MGA has issued several guidance notes that provide guidelines on certain provisions, procedures, standards and methods, with the aim to improve proportionality, participation, openness, accountability, effectiveness and coherence.

Jurisdictional Overview

Online

Please give an overview that outlines if the following sectors are permitted, prohibited or restricted:
betting; bingo; casino; lotteries; fantasy sports; social gaming; and poker.
Please include any other relevant sectors.

Since the early 2000s, Malta has secured its position as a leading and well-regulated European remote gaming jurisdiction and is estimated to host around 10% of the world’s online gaming companies by trading volume.
The Gaming Authorisations Regulations provide operators in both the online and land-based sec-tors require a licence when providing or carrying out a gaming service, or providing a critical gaming supply from Malta or to a person in Malta, or through a Maltese legal entity, unless exempt. A licence is required to provide or supply any of these games, with the exception of social gaming:

• online betting;
• bingo;
• casino;
• lotteries;
• fantasy sports;
• poker; and
• social gaming.

A licence is not required for games that the MGA classifies as low-risk games. In such cases, a low-risk permit would be required. Such permit is only issued for a single event, expires as soon as the event is concluded, is non-transferable unless the MGA’s prior approval is obtained, and is non-renewable. Examples of low-risk games include non-profit games in which the stake does not exceed EUR5 per player and more than 90% of the net proceeds go to a good cause (charity, sports, education, etc).

Land-Based

Please give an overview that outlines if the following sectors are permitted, prohibited or restricted:
betting; poker; bingo; casino; gaming machines; and lotteries. Please include any other relevant sectors.

With the adoption of the 2018 regulatory frame­work, online and land-based gaming activities are now regulated by the same legislation on a horizontal basis, except that applicants applying for a land-based gaming licence are required to seek and obtain an additional approval for both the gaming devices they offer to consumers as well as the premises from which the licensed gaming devices are operated. Land-based bet­ting, bingo, casino, lotteries and poker are thus also permissible and regulated in the same man­ner as online games.

Legislative Framework

Key Legislation

Set out key legislation that applies to the gambling sector.

The key legislation that applies to the gambling sector is as follows:

The key legislation that applies to the gambling sector is as follows:
• the Gaming Act – Chapter 583 of the Laws of Malta;
• the Gaming Malta Fund Regulations – SL 583.02;
• the Gaming Licence Fees Regulations – SL 583.03;
• the Gaming Definitions Regulations – SL 583.04;
• the Gaming Authorisations Regulations – SL 583.05;
• the Gaming Compliance and Enforcement Regulations – SL 583.06;
• the Gaming Premises Regulations – SL 583.07;
• the Gaming Player Protection Regulations – SL 583.08;
• the Gaming Commercial Communications Regulations – SL 583.09;
• the Gaming Tax Regulations – SL 583.10;
• the Social Causes Fund Regulations – SL 583.11; and
• the Retention of Data (MGA) Regulations – SL 583.12.

Other supporting legislation and directives that apply to the gambling sector are as follows:
• the Prevention of Money Laundering Act – Chapter 373 of the Laws of Malta;
• the Prevention of Money Laundering and Funding of Terrorism Regulations – SL 373.01;
• the Consumer Affairs Act – Chapter 378 of the Laws of Malta;
• the Electronic Communications (Regulation) Act – Chapter 399 of the Laws of Malta;
• the Data Protection Act – Chapter 586 of the Laws of Malta;
• the Prevention of Corruption in Sport Act – Chapter 593 of the Laws of Malta;
• the Requirements as to Advertisements, Methods of Advertising and Directions applicable to Gambling Advertisements – SL 350.25;

Definition of Gambling

Set out the definition of gambling that applies in your jurisdiction.

The term “gambling” is not specifically defined in the Gaming Act. However, the activity of gam-bling falls within the operative term “gaming”, which is used in Maltese legislation. “Gaming” is defined as “an activity consisting in participating in a game, offering a gaming service, or making a gaming supply”.
A “game” is defined as “a game of chance or a game of skill”. In light of this, a “game of chance” means “an activity the outcome of which is determined by chance alone or predominantly by chance and includes but is not limited to activities the outcome of which is determined depending on the occurrence or outcome of one or more future events”. On the other hand, a “game of skill” means “an activity the outcome of which is determined by the use of skill alone or predominantly by the use of skill, but excludes a sport event, unless otherwise established by or under this Act”.

Definition of Land-Based Gambling

Set out the definition of land-based gambling that applies in your jurisdiction.

The general definition of “gaming” applies to all gambling/gaming, regardless of the channel of distribution adopted by the operator to reach its consumers. There is no distinction between online and land-based gaming, and thus the general definition covers both types of gaming.

Definition of Online Gambling

Set out the definition of online gambling that applies in your jurisdiction.

See Definition of Land-Based Gambling.

Key Offences

Provide a summary of each of the key offences that can be committed.

The major offences under the Gaming Act are outlined in the Third Schedule of the Act and include the provision of a service or supply without the necessary authorisation, aiding or abetting such provision, and failing to effect pay­ments to the MGA. Other key offences arising under other applicable laws include money laun­dering offences and data protection offences, both of which are directly relevant for gaming operators. Sanctions also apply to lesser offences, such as the breach of, or non-compliance with, oth­er areas of applicable legislation, including a breach of advertising regulations or compliance breaches.

Penalties for Unlawful Gambling

Provide a summary of each of the penalties for unlawful gambling.

Any person found guilty of undertaking unlaw­ful gaming activity as per the Third Schedule of the Gaming Act is liable to a fine of between EUR10,000 and EUR500,000, or to imprison­ment for up to five years, or to both a fine and imprisonment. As an alternative to criminal court proceedings, the MGA may, by way of agree­ment with the offender, and subject to the rec­tification of the breach, impose a penalty of EUR500,000 for each infringement, or a sum of EUR5,000 for each day of infringement or non-compliance, or any other administrative sanc­tions. Once such agreement is concluded, the offender’s criminal liability under the Gaming Act will be extinguished. The agreement will only be effective if it is accompanied by the payment of the sum due or the provision of sufficient secu­rity for its payment.

Any machine or other device, and any money used in the commission of the offence, will be seized and forfeited in favour of the MGA and may be appropriated in favour of the Malta Gam­ing Fund. In the case of a breach of any other regulatory instrument that is not outlined in the Third Schedule, the MGA may impose an admin­istrative penalty of up to EUR25,000 for every breach or non-compliance, or an administrative penalty of up to EUR500 for each day on which such breach persists. The MGA may impose fines for non-compliance in the following three main scenarios:

• to ensure that the licensee rectifies any default;
• to deter future non-compliance and thus ensure that Maltese licensees uphold high standards of behaviour consistent with regulatory requirements; and
• for the purpose of ensuring that any financial gain that the licensee may have made through non-compliance is eliminated.

On 26 November 2019, the MGA published an explanatory note on “Guiding Principles for the Application of Enforcement Measures”, setting out the principles that should guide the MGA in its application of enforcement measures when a breach occurs. This explanatory note lays down the aims that the MGA should be guided by in deciding the appropriate form of enforcement action; ie, in determining whether it should offer regulatory settlement or proceed with the commencement of criminal proceedings. It also lays down principles for the quantification of penalties.

Regulatory Authority

Identify the key regulatory authorities applicable to the gambling sector.

The Gaming Act established the main regulatory body responsible for the governance of all gaming activities (including land-based and remote gaming sectors) in Malta, the Malta Gaming Authority.
The MGA’s main functions include the issuance of licences, approvals, certificates and recognition notices, as well as the monitoring of the conduct of operators in the field. The MGA is also responsible for preventing, detecting and combating criminal activity in the gaming sector, and for ensuring that games are operated and advertised fairly and responsibly.

Regulatory Approach

Indicate your jurisdiction’s approach to regulation; for example, risk-based, prescriptive, etc.

The regulatory approach adopted by the MGA is risk-based and prescriptive. In August 2018, the Gaming Act and various subsidiary legisla¬tion came into force. This framework broadened the regulatory scope and increased the MGA’s oversight. It moved towards an objective-based regulatory approach, allowing for innovation and ensuring that the regulatory objectives are attained.

Recent or Forthcoming Changes

Outline recent or forthcoming changes.

In October 2021, the Malta Gaming Authority (MGA) invited stakeholders from the gaming industry, service providers, and other interest groups to express their views and provide feedback on the Revised Audit Service Provider Guidelines. After the consultation closed on 17 December 2021, the MGA began analyzing the feedback to finalize the Guidelines, with plans to publish the final version by the end of Q2 2022. On 11 November 2022, the MGA released a revised version of the System Audit Checklist, refining policies such as the AML Policy for B2C operators.
On 30 January 2023, the MGA issued the Policy on the use of Distributed Ledger Technology by Authorised Persons, providing guidelines on the acceptance of Virtual Financial Assets, Virtual Tokens, and Innovative Technology Arrangements. Subsequently, on 9 October 2023, the MGA released a new guidance note on changes in direct or indirect shareholding, and published amendments to the Player Protection Directive (Directive 2 of 2018) on 12 December 2023.
This year the MGA continued to update its regulatory framework, including providing guidance and procedures for submitting an Incident Report through the updated ‘Technical – Information Security Incident’ reporting instrument. On 15 April, the MGA published updated documents on the application process and requirements for Non-Profit Tombola and Lotteries, including a revised list of necessary enclosures for these applications. Updates to the Systems Audits / Reviews Processes followed on 27 May. On 4 June, the MGA introduced a new guidance manual for reporting Alternative Dispute Resolution (ADR) proceedings, outlining the procedures for submitting monthly ADR reports through the Licensee Portal. The following day, the MGA updated its guidance pages for the new Recognition Notice application and the Annual Maintenance Application. Further updates came on 25 June, with the publication of Revised Shared Conduct Requirements, and on 30 June, when the MGA streamlined the ‘Change in Personal Details’ application process. Finally, on 30 July, the MGA published a Notice concerning regulations for the exhibition of gaming devices.

Types of Licences

Set out the types of licences that are applicable to gaming and gambling. Please note that personal licensing is now covered in new section 13 below.

A gaming service is defined as the availability for participation by players as an economic activity, whether directly or indirectly, and whether alone or with others. The MGA may issue the following licences.
A gaming services licence – a business-to-consumer (B2C) licence to offer or carry out a gaming service. A B2C licence may constitute any one or more of the following game types:

1. Type 1 gaming services – games of chance played against the house, the outcome of which is determined by a random number generator, and which includes casino-type games;
2. Type 2 gaming services – games of chance played against the house, the out­come of which is not generated randomly, but is determined by the result of an event or competition extraneous to a game of chance, and whereby the operator manages its risk by managing the odds offered to the player;
3. Type 3 gaming services – games of chance not played against the house and wherein the operator is not exposed to gaming risk, but generates revenue by taking a commission or other charge based on the stakes or the prize, and shall include player versus player games such as poker, bingo, a betting exchange and other commission-based games; and
4. Type 4 gaming services – controlled skill games.

A critical gaming supply licence – a business-to-business (B2B) licence to provide or carry out a critical gaming supply that is indispen­sable in determining the outcome of a game or games forming part of a gaming service, and/or is an indispensable component in the processing and/or management of essential regulatory data.

A corporate group licence – B2B or B2C corporate group licences may be issued to a corporate group that includes more than one company within its structure. This may be availed of where the entities concerned provide critical gaming supplies solely to other entities within the same group. In such instances, an additional B2B licence will not be required. However, if entities within the B2C corporate group licence provide critical gaming supplies in or from Malta to entities outside of the group, a separate B2B licence would be required. The entities that can be covered by the corporate group licence must be established in Malta or another EU/EEA jurisdiction.

In instances where a game may be categorised under one or more of the game types, the MGA has complete discretion to categorise the game under the specific type it believes closest reflects the nature of the game.

Availability of Licences

Are licences readily available?

Licences can only be purchased between entities that form part of the same corporate group.

Duration of Licences

What are the durations of the available licences?

A standard licence term, whether original or renewed, is ten years, whilst a recognition notice is valid for one year. A recognition notice is a notice issued by the MGA whereby an authorisation issued by another member state of the EU or EEA, or a state that is deemed by the MGA to offer safeguards largely equivalent to those offered by Maltese law, is recognised as having the same effect as an authorisation issued by the MGA for the purpose of providing a gaming service or gaming supply in or from Malta. Licences that require government concessions, such as for the operation of land-based casinos and the island’s national lottery, would be granted for ten years or such shorter period for which the concession is valid.
Where a gaming service or a gaming supply is by its very nature temporary, consists of a singular event, or a number of game instances linked to the same event, such service or supply shall be eligible to apply for a limited duration licence.

Application Requirements

What are the key application requirements for operators and suppliers?
What are the key differences, if any, between the application requirements for land-based and online operators?

Application requirements are similar in scope for remote and land-based operators. Prospective licensees must demonstrate that they are financially sound and capable of meeting the MGA’s requirements, and that they will comply with the applicable legislation. In this respect, all directors and persons performing key roles in the gaming company must be vetted by the MGA to ensure that they are fit and proper, based on a detailed disclosure set out in a prescribed form (Personal Declaration Form), which must be submitted through the MGA’s portal together with all supporting documentation. Direct and indirect shareholders holding more than 10% in the applicant company are subject to the same strict vetting process.
The MGA issued a Directive on Start-Up Undertakings in which any undertaking that qualifies as a start-up would be subject to less stringent compliance obligations for a certain amount of time. The qualifications to be deemed a start-up have recently been amended as per Legal Notice 266 of 2019, wherein an undertaking must not have generated more than EUR10 million of revenue in the 36 months prior to the application. These amendments came into effect on 1 January 2020.

Application Timing

Outline the timescale for licence applications.

Although no timeframes are officially issued by MGA, a new remote gaming licence application review generally takes between three to six months from date of submittion. There are five application stages where the MGA will assess whether the applicant and its key function holders are fit and proper to conduct gaming business in accordance with Maltese laws and regulations, whether the applicant is correctly organised and prepared to undertake its proposed business strategy, and whether the applicant satisfies all key operational and statutory requirements. The MGA will also consider whether the applicant has correctly implemented its technical infrastructure in accordance with its approved business plan and systems documentation. The five application stages are the following.

Although no timeframes are officially issued by MGA, a new remote gaming licence application review generally takes between three to six months from date of submitting. There are five application stages where the MGA will assess whether the applicant and its key function holders are fit and proper to conduct gaming business in accordance with Maltese laws and regulations, whether the applicant is correctly organised and prepared to undertake its proposed business strategy, and whether the applicant satisfies all key operational and statutory requirements. The MGA will also consider whether the applicant has correctly implemented its technical infrastructure in accordance with its approved business plan and systems documentation. The five application stages are the following.

• A fit and proper exercise conducted on the applicant by assessing all information related to persons involved in financing and management, and on the business viability of the operation.
• Business planning – an in-depth financial analysis of the applicant’s business plan is conducted by the MGA.
• Operational and statutory requirements – the applicant is examined on the instruments required to conduct the business, including incorporation documents, the games, the rules, terms, conditions, policies and technical documentation of the gaming and control system. Applicants must also meet the established minimum issued and paid-up share capital requirements.
• System review – the MGA informs the applicant of the outcome of the application. Should the application be successful, the applicant will be invited to implement the operation on to a technical environment, in preparation to go live. A 60-day time limit is allowed for this technical roll-out. Once the process of certification is completed successfully, the Authority will issue a ten-year licence.
• Compliance review – after going live, a licensee must undergo compliance audits of its operations, which must be completed by an approved service provider within 90 days from the MGA’s notice.

Application Fees

What fees, if any, are associated with licence applications?

Licence application fees vary according to the licence/authorisation being applied for. A one-time, non-refundable administrative fee of EUR5,000 is payable to the MGA upon the submission of any application for a B2C or a B2B licence, for the renewal of such a licence or for a recognition notice. Gaming licence applications also include individual applications for Directors, beneficial owners and key function role holders, at EUR50 per person, per role. An application for a material supply certificate and requests for the addition of a new gaming vertical, the addition of a new delivery channel or major changes to an operator’s software and infrastructure involve a fee of EUR1,000. These specifications are found in the Gaming Licence Fees Regulations.

Ongoing Annual Fees

Outline the applicable annual fees.

Any person in possession of a gaming services licence issued by the MGA must pay a licence fee of between EUR10,000 and EUR35,000, depending on the class of licence held and the annual revenue levels. The fees are established in the Gaming Licence Fees Regulations.

Land-Based Gambling

Premises Licensing

Give a brief outline of premises licensing requirements.

Gaming premises must be licensed, and any person renting out or allowing another person to use the premises as a gaming premises must ensure that the lessee is in possession of a valid approval or licence. The Gaming Premises Regulations, which were published in July 2018, are applicable in this regard. The Gaming Premises Directive, which was published by the MGA and came into force on 1 February 2019, delineates further requirements to which gaming premises must adhere. The MGA has carried out several amendments to the 2019 Gaming Premises Directive to guarantee the proper functioning of the regulatory mechanisms applicable to gaming premises and controlled gaming premises. The amendments relate to different aspects of the Directive, including the provisions pertaining to the conversion of regular players into junket players, the identification of employees, the count procedure and the “No Objection Procedure” relating to the approval of controlled gaming premises.
Gaming premises’ operators are obliged to register all players upon entry into the gaming premises. These activities must be licensed and approved by the MGA and are not subject to any prescribed limitation in their number, although their physical location is subject to several rules. Any person renting out or allowing another person to use the premises as a gambling premises must ensure that the lessee is in possession of a valid approval or licence. Gaming premises operators are expected to make the possibility of self-exclusion readily available to every person and must provide assistance and guidance to any person who wishes to exclude themselves. More stringent regulations apply in relation to the self-exclusion of pathological gamblers. Casino licences are issued by the MGA but would be dependent on the applicant holding a concession from the government for such operation.
There is no limit on the total number of gaming premises for the Maltese islands. However, gaming premises are subject to several criteria obliging them to be located at a pre-set minimum distance away from schools, places of worship, and other gambling premises. There are also restrictions regulating the number of gaming devices within the licensed gaming premises to one gaming device per two square metres, and a maximum of ten gaming devices in any gaming premises. In terms of lottery ticket and sale venues, a valid permit is required to sell tickets for the national lottery. An application for this permit is to be made to the MGA by the proposed seller. There are currently approximately 240 “Maltco Lottery” points of sale across the Maltese islands.

Recent or Forthcoming Changes

Highlight any recent or forthcoming changes to the land-based gambling sector.

A new policy paper has recently been published on 28 May 2021, relating to the amending of the return to player minimum percentage (RTP). This proposed change was based upon the MGA’s consideration of eliminating the differences between the requirements applicable to land-based gaming premises operators and remote gaming operators. This elimination aids in establishing uniformity between both sectors. In order for this to be done, the amendment deals with the lowering of the existing minimum RTP percentage from 92% to 85%.
The MGA will also be publishing changes to the Player Protection Directive (Directive 2 of 2018) in light of committing to the protection of consumers, particularly minors and vulnerable individuals.

Online Gambling

B2C Licences

Give an overview of the use and application of B2C licences.

See section Type of Licences

B2B Licences (Suppliers, Software, Etc)

Give an overview of the use and application of B2B licences.

See section Type of Licences

Affiliates

Outline any measures in place to regulate the use of affiliates.

There are currently no measures in place to regulate the use of affiliates. In accordance with Directive 3 of 2018 (the Gaming Authorisations and Compliance Directive), outsourcing service providers such as affiliates shall be deemed to be acting for, and on behalf of, the licensee. In such cases, the licensee is responsible for the affiliate’s actions in so far as the activities concerned are covered by the licence issued by the MGA.
Notably, the Authority holds that when the service of the outsourcing service provider is constrained only to marketing and advertising activities, the regulatory framework that shall be adhered to is that of advertising. In light of this, the liability lies on the licensee to comply with such laws. However, when the outsourcing service provider conducts other activities that are related to the gaming service, this may differ. In fact, where the outsourcing service provider processes payments and handles player registration, the service provider shall itself be deemed to require a B2C licence, unless such services are only being completed on behalf of the licensee; in that case, they shall be considered to be enclosed within the authorisation of the licensee. In the latter case, the service provider would require approval of the service as a material supply.

White Labels

Outline any licensing and regulatory requirements that apply to the use of white-label providers.

There are currently no measures regulating requirements that apply to the use of white-label providers. Similar to affiliates, white-label providers are deemed to be intermediaries. In accordance with Directive 3 of 2018, outsourc¬ing service providers such as white-label provid¬ers are deemed to be acting for, and on behalf of, the licensee. In such cases, the licensee is responsible for the actions of the white-label providers in so far as the activities concerned are covered by a licence issued by the MGA in favour of that white-label service provider.

Technical Measures

Are there technical measures (eg, IP blocking) to protect consumers from unlicensed operators, avoid breaches or protect payments?

There are currently no technical measures, such as IP blocking, in place to protect consumers from unlicensed operators.

Recent or Forthcoming Changes

Outline recent and forthcoming changes to online gambling.

A survey was conducted in April 2020 by the MGA, among its licensed operators, in light of assessing the impact that the COVID-19 pan¬demic has had on the gaming sector. This sur¬vey revealed that the B2C sector, especially the operators handling Type 2 games, was affected the most. Due to this, considerations arose with respect to plans in investing in this sector; in fact, some even thought about postponing such plans.

In July 2020, the Financial Intelligence Analysis Unit (FIAU) and the MGA published a revised version of the Implementing Procedures Part II for the Remote Gaming Sector. The chang­es carried out addressed amendments to the Prevention of Money Laundering and Fund­ing of Terrorism Regulations (PMLFTR) and to the Implementing Procedures Part I, as well as reflecting the realities that FIAU and MGA offic­ers have been encountering in the course of supervisory activities. The most salient revisions made to the Implementing Procedures Part II are the following:

• providing further guidance on customer due diligence (CDD), such as on the verification of customers’ identity, the carrying out of ongoing monitoring, dealing with customers who are politically exposed persons (PEPs), and the requirements that persons acting as money laundering reporting officers (MLROs) are expected to meet;
• clarification on the obligations of subject persons when the customer is not willing to provide the same with the necessary information and/or documentation required as part of CDD;
• further elaboration on risk factors that are to be taken into account by subject persons, such as on the involvement of affiliates;
• the extension of the licensees’ own anti-money laundering and countering the funding of terrorism (AML/CFT) obligations to physical establishments used to extend licensees’ customer reach;
• the provision of targeted guidance on corporate licensees; and
• the inclusion of case studies based on actual cases analysed by the FIAU’s Intelligence Analysis Section.

Responsible Gambling (RG), Also Known as Safer Gambling (SG)

RG Requirements

Outline key responsible gambling requirements.

Maltese gaming legislation and regulations provide for a number of responsible gaming requirements, aimed at protecting minors and vulnerable persons from unscrupulous operators. The Responsible Gaming Foundation was set up in Malta in 2014, which has launched several projects and initiatives in this regard. A National Gambling Helpline (1777) was launched by this Foundation in 2015. Furthermore, in addition to Directive 2 of 2018 (the Player Protection Directive), the MGA imposes requirements ranging from strict advertising and marketing regimes to the possibility of self-exclusion.
In May 2020, the MGA published a consultation paper to gather feedback on the “Suspicious Betting Reporting Requirements and Other Sports Integrity Matters”, aimed at safeguarding the integrity of sports and sports betting. A guidance paper was subsequently issued in this regard, advising all MGA licensees on matters relating to sports betting integrity.

Gambling Management Tools

Identify key gambling management tools in your jurisdiction.

Gambling management tools adopted by the MGA are focused principally on obligations placed on operators to assist players with determining whether or not they are problem gamblers, making leaflets or other material regarding organisations that assist problem gamblers readily available to players, and ensuring that there are procedures in place to enable players to exclude themselves from playing for a definite or indefinite period of time.
In March 2019, the MGA issued a preliminary market consultation (PMC) document to request information pertaining to the possibility of implementing a unified self-exclusion system to be applied to the regulated gaming industry in Malta, across gambling operators, irrespective of the channel.

Recent or Forthcoming Changes

Outline recent and forthcoming changes.

The Malta Gaming Authority (MGA) introduced changes on 1 October 2021 to strengthen sports betting integrity. These changes updated the Suspicious Betting Reporting Requirements, extending the obligation to report suspicious betting to licensees offering critical gaming supplies related to sports betting. The Authority also began directly alerting operators about suspicious betting activity. This alerting process helps operators by raising awareness, enabling them to review their systems, and ensuring they stay informed about betting risks. For the MGA, the changes enhance monitoring and provide a more comprehensive view of sports betting risks, supporting efforts to combat match-fixing and corruption.

Anti-money Laundering (AML)

AML Legislation

Outline key AML legislation and any AML guidance relevant to the gambling sector in your jurisdiction.

The Prevention of Money Laundering and Funding of Terrorism Regulations oblige online gaming operators to conduct high levels of CDD, with the risk of steep penalties for non-compliance.
The MGA has issued a new directive dealing with the Key Function of the Prevention of Money laundering and the Financing of Terrorism. Directive 3 of 2020, which came into force on 20 July 2020, obliges B2C licensees to have at least one of the key function holders vested with the key function of the prevention of money laundering and the financing of terrorism. This key function holder must also be an FIAU-registered MLRO in accordance with the procedures laid down in the directive.
The FIAU is the Maltese government agency responsible for the combating of money laundering and financing of terrorism. It has published two sets of implementing procedures in terms of the PMLFTR, applicable to land-based casinos and the remote gaming sector. These implementing procedures focus on specific areas of the PMLTFR and their application at an industry-specific level, in order to highlight those aspects of money laundering prevention that are of most relevance to the industry, and to ensure they are understood and interpreted consistently by all Maltese licensees or other licensed operators based in Malta.

AML Requirements

What AML requirements exist in your jurisdiction?

As an EU member state, Malta has implemented all EU directives regulating the prevention of money laundering. Malta is part of MONEYVAL (the Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism), which was established in September 1997 by the Committee of Ministers of the Council of Europe to conduct self, and mutual, assessment exercises of the anti-money laundering measures implemented. The principal sources of Maltese law on money laundering are two statutory instruments, namely the Prevention of Money Laundering Act (Chapter 373 of the Laws of Malta) augmenting other provisions found in the Criminal Code (Chapter 9 of the Laws of Malta) and the PMLFTR (SL 373.01).
The EU’s Fourth Anti-Money Laundering Directive (“4AMLD”) classifies gambling operators as “subject persons”, which means that gaming operators are required to comply with stringent reporting and procedural obligations. The 4AMLD was transposed into Maltese law, and gaming operators became subject to risk-based AML obligations as from 1 August 2018.
The 4AMLD takes the form of a minimum harmonisation directive and sets out minimum standards that must be met by transposing national legislation, while affording member states the option to exceed this standard and vary in the implementation thereof. Whilst the 4AMLD lays down an obligation for B2C operators to apply CDD measures for single transactions amounting to EUR2,000 or more, Malta applies this threshold on the basis of a rolling period of 180 days.
Further to the transposition of the 4AMLD, an Anti-Money Laundering Unit was set up within the MGA, with the purpose of conducting AML/CFT supervisory assessments of licensed operators through inspections carried out both on-site and off-site. Reports of findings are subsequently forwarded to the FIAU.
Any operator found guilty of the offence of money laundering could be exposed, on conviction, to a fine not exceeding EUR2.5 million, and its officers could be exposed to imprisonment for a period not exceeding 18 years, or to both a fine and imprisonment. The court may, inter alia, also order the forfeiture to the government of the proceeds or of property with a value that corresponds to the value of such proceeds, whether such proceeds have been received by the person found guilty or by the company.

Recent or Forthcoming Changes

Outline recent and forthcoming changes.

On the 6th of April 2022, the ‘Financial Intelligence Analysis Unit’ (“FIAU”) published a new Guidance Note on Common Issues related to the Money Laundering Reporting Officer (“MLRO”). Such issues include:

1. Independence and Autonomy: MLROs must be independent and free from conflicting duties, ensuring they can perform their role without external influence.
2. Conflicts of Interest: MLROs should avoid roles that could compromise their objectivity, such as holding other senior roles like CEO.
3. Outsourcing & Employment: Some functions cannot be outsourced, and MLROs must ensure they understand which activities can be delegated.
4. Knowledge & Expertise: MLROs must possess sufficient AML/CFT knowledge and meet specific qualifications or experience criteria.
5. Personal Liability: MLROs are personally accountable for AML compliance, facing potential legal risks if they fail in their duties.
6. Record Keeping: Proper documentation is essential, ensuring that all AML processes and decisions are traceable.

These clarifications guide MLROs in ensuring compliance with AML/CFT obligations.

Advertising

Regulatory/Supervisory Agency

Identify the relevant regulatory/supervisory agencies.

See section Regulatory Authority.

Definition of Advertising

What is the definition of advertising in your jurisdiction?

Advertising is defined as text, images, sound or any other medium transmitting information that is designed to promote, directly or indirectly, the goods, services, image or brand of a person pursuing a licensable gaming activity. For the avoidance of doubt, this also includes product placement and any emerging advertising techniques.

Key Legal, Regulatory and Licensing Provisions

Identify the key legal, regulatory and licensing provisions.

The key provisions can be found in the Gaming Commercial Communications Regulations, 2018; Legal Notice 247 of 2018; and SL 350.25, entitled “Requirements as to Advertising, Methods of Advertising and Directions applicable to Gambling Advertisements”. The MGA issued the Commercial Communications Guidelines as part of its mission to prioritise player protection and responsible gaming. These legal instruments lay down the basis for acceptable advertising practices in respect of gaming services. The MGA also set up a Commercial Communications Committee, the role of which is to review commercial communications issued by gaming operators in Malta and assess any possible breaches.

Restrictions on Advertising

Referencing any relevant legislation or guidance, highlight any restrictions on advertising in the gaming and gambling sector.

The prohibitions and restrictions on advertising generally provide those advertisements must not portray, condone or encourage behaviour that is criminal or socially irresponsible or that could lead to financial, social or emotional harm, or directly or indirectly encourage antisocial or violent behaviour.
Authorised gaming operators are permitted to advertise and market their products and/or ser-vices, subject to various restrictions aimed at protecting minors and vulnerable persons. The same restrictions apply to persons providing any service to, or acting in collaboration with, licensed and authorised persons offering a licensable game. The above-mentioned regulations and guidelines also prohibit the portrayal of gaming as socially attractive, or suggestive of enhancing personal or professional qualities, or a way of gaining control, superiority, recognition or admiration. The portrayal of gaming in the context of toughness/resilience, or as being indispensable or taking priority in life is also illegal. Furthermore, advertisements must not suggest that solitary gaming is preferable to social gaming, nor that skill can influence the outcome of a game that is purely a game of chance and cannot provide false information about the chances of winning or exploit cultural beliefs or traditions about gaming or luck. Operators can-not make reference to instantly available consumer credit services, or other ways of providing credit to players.
The sending of unsolicited communications is prohibited, as is the sending of solicited communications to persons who have requested to stop receiving such communications, or who are undergoing a period of self-exclusion.
Advertisements must clearly display the name of the relevant gaming company responsible for that advertisement, and a reference must be made in the advertisement to the fact that the company holds a valid licence issued by the MGA or another licensing authority duly recognised in Malta. Advertisements made via social media account portals held by the gaming company itself or third parties are subject to the same restrictions.
Gaming advertisements cannot be issued or distributed in any public places or on any means of public transport in Malta, but this does not apply to advertisements displayed or broadcast within authorised gaming premises, locations frequented mainly by tourists (including airports, seaports, hotels and holiday complexes, excluding bars and restaurants), conferences/events specifically organised by the gaming sector, the premises of operators, or newspapers or magazines, amongst others.
The regulations also provide that responsible gaming messages are to be prominently displayed within all advertisements, and that advertisements must not be directed towards minors or vulnerable persons, must not encourage these persons to play a game, must not feature minors or appeal to these persons in any way, nor exploit the susceptibilities, aspirations, credibility, inexperience or lack of knowledge of these persons, nor present gaming as a sign of maturity or move to adulthood.

Sanctions/Penalties

Outline the sanctions/penalties for infringing advertising regulations.

If the MGA determines that a particular advertisement is in breach of legislation, it may order its modification, retraction or termination. The MGA may also take any administrative action it deems necessary, including the issuance of sanctions. Furthermore, where the MGA deems it necessary, it may also instruct the licensee to suspend the advertisement until it reaches a final decision. The Court of Magistrates, in its criminal jurisdiction, is competent to take cognisance of any offences committed in this respect. However, criminal proceedings cannot be undertaken without the sanction of the MGA. The prescriptive period in relation to actions in breach of advertising regulations is six years.
Advertising Recommendations by the MGA in Light of the COVID-19 Pandemic
With regard to the COVID-19 pandemic, the MGA has taken into consideration all relevant developments and is constantly proposing adequate and proportionate measures, also bearing in mind the distress the pandemic has caused among players and operators. The MGA has reiterated the fact that operators are bound by their obligations pursuant to the Commercial Communications Regulations to ensure that all commercial communications are socially responsible, especially in light of the current situation. Any direct or indirect reference to COVID-19, or any related circumstance, would be considered to amount to a breach of this regulation.

Acquisitions and Changes of Control

Disclosure Requirements

Set out the headline disclosure requirements for acquisitions and change of control of gaming and gambling companies.

Article 37(2) of the Gaming Authorisations and Compliance Directive (Directive 3 of 2018) requires operators licensed by the MGA to notify the Authority of any change in direct or indirect qualifying shareholding within the licensee, no later than three working days after. All the documentation required by the MGA as part of the notification process for the approval of the new qualifying shareholder must be submitted to the Authority within 30 days of the change in share-holding taking effect. Changes in shareholdings in a licensee representing less than 10% of the operator’s issued share capital, either directly or indirectly, will not require the Authority’s approval.
If the MGA takes the view that the change in direct or indirect shareholding has the effect of prejudicing the fitness and propriety of the licensee, or otherwise hinders its suitability for a licence, it may order the licensee to reverse the transaction, reverting to the status quo ante within a timeframe established by the MGA.

Change of Corporate Control Triggers

Identify any change of corporate control triggers.

Gaming licences are not transferable, unless between entities forming part of the same corporate group. However, in the case of a change of corporate control, the continuance of the licence will be subject to the MGA’s vetting and approval of the new owners, and of any incoming directors and/or key function holders.

Passive Investor Requirements

Identify any change of corporate control triggers.

Gaming licences are not transferable, unless between entities forming part of the same corporate group. However, in the case of a change of corporate control, the continuance of the licence will be subject to the MGA’s vetting and approval of the new owners, and of any incoming directors and/or key function holders.

Passive Investor Requirements

Set out any requirements for passive investors in acquisitions or changes of control.

Passive investors are caught by the general change of control rules outlined above.

Enforcement

Powers

What powers of enforcement do regulatory bodies have?

The enforcement measures that the MGA can adopt are as follows:

• an order directing the authorised person to do something, or to refrain from doing some­thing, or to otherwise correct its conduct and/or operations;
• a warning, directing the authorised person to do, or refrain from doing, something in the future;
• adding, removing or amending conditions attached to the authorisation held by the relevant authorised person;
• in the case of a breach that does not con­stitute an offence under the Gaming Act,
• imposing an administrative penalty in terms of Article 25(3) of the Gaming Act;
• in the case of a breach that does constitute an offence under the Gaming Act, filing a report to the Executive Police for the com­mencement of criminal proceedings; and
• suspending or cancelling a licence.

Sanctions

How are sanctions enforced? Is there a history of enforcement in your jurisdiction?

The MGA has, in various situations, also suspended and cancelled a licence in cases of breach. In fact, pursuant to Article 7(1) of the Gaming Compliance and Enforcement Regulations (SL 583.06), the Authority has the right to commence a formal investigation when it suspects that there is a breach of any applicable regulatory instrument or in the case that it believes that such authorised person is no longer fitted to hold such authorisation. In light of this, a notice of suspension or cancellation is to be served on the authorised person.
Further to this, suspension or cancellation of the authorisation is not to affect any obligation(s) of the authorisation holder for anything done or omitted to be done, or for any amounts due that may have already been accumulated, prior to the date of suspension or cancellation.

Financial Penalties

How are financial penalties calculated and enforced?

Financial penalties are enforced as certain, liquid and due money claims against the licensee, through the normal enforcement procedures available under Maltese law. These generally consist of the filing of a claim by way of special summary proceedings in the Maltese courts, and the issuance of the relevant precautionary warrants against the assets of the licensee to secure the sum due pending the outcome of the judgment. Once a favourable judgment is obtained by the MGA, an executive warrant is issued against the licensee to recover the sum due, together with any relevant interest and eligible legal costs.

Tax

Tax Rate by Sector

Please state the gambling tax rates in your jurisdiction, by sector, as applicable.

Any gaming service subject to the requirement of a licence, carried out from Malta or to any person in Malta, is subject to a gaming tax cal­culated at the rate of 5% on the gross gaming revenue (GGR) generated from said gaming ser­vices during the relevant tax period. This tax is levied on the gaming revenue, as defined in the Gaming Tax Regulations, 2018, Legal Notice 248 of 2018, generated by operators from end cus­tomers located in Malta.

There is also a gaming levy imposed on gam­ing devices, calculated on the aggregate gam­ing revenue generated during the relevant tax period. The rates of this gaming levy depend on the type of gaming service offered. The gam­ing levy imposed in relation to gaming devices deployed within gaming premises in the provi­sion of Type 1 and/or Type 2 gaming services is 30%, while that imposed on gaming devices deployed within gaming premises in the provi­sion of Type 3 and/or Type 4 gaming services is 12.5%. The levy on gaming devices deployed within controlled gaming premises in the provi­sion of Type 1, Type 2, Type 3 and/or Type 4 gaming services is 15%.
Operators are obliged to pay a compliance con­tribution to the MGA, as well as other applica­ble licence fees. The compliance contribution is determined by the gaming revenue generated by the licensee under its MGA licence and is calculated in accordance with the Gaming Licence Fees Regulation based on the type of gaming service or critical gaming supply offered. A Maltese company holding licences in several jurisdictions would not account for the com­pliance contribution imposed by the MGA for those activities conducted under its non-Malta licences. Player winnings are generally exempt from taxation in Malta, provided that the gaming activities are not undertaken with such frequen­cy by the player as to be deemed to constitute a trade, business, profession or vocation. Maltese resident and domiciled companies are subject to tax on their worldwide income, minus permitted deductions, at the standard corporate tax rate of 35%.
However, based on Malta’s full-imputation system, upon the receipt of a divi­dend, shareholders of a Maltese company may claim a refund of all, or part, of the tax paid in Malta at the level of the company, depending on the type and source of the income from which such dividend was paid. Specific tax advice should be obtained in each case.

Value Added Tax (VAT)
VAT is applied at the standard rate of 18% on every taxable supply of goods, services or importation, with lower rates applicable to cer­tain sectors. Two sets of guidelines have been published by the Maltese government in relation to the previ­ous gambling VAT exemption. These guidelines became effective on 1 January 2018 and provide a specific list of exemptions applicable to par­ticular gaming activities. Therefore, in contrast to the previous regime (where a blanket exemption was applicable to all gaming activities), VAT will apply under the current framework, unless the particular gaming activity is specifically exempt. The VAT exemptions applicable to the respective gaming activities are exemptions without credit.

Types of Authorisations and Licences

Set out the types of personal authorisations and licences that are applicable to individuals
Are licences readily available? What are the durations of the available licences?

In accordance with the Gaming rules, key function certificates are issued for individuals holding key roles within the company. These roles are in accordance with Part II of the Gaming Authorisations and Compliance Directive.

Application Process

What are the key application requirements for directors, owners or senior management?
What are the key application requirements for shareholders, including disclosure thresholds?
Outline the timescale for applications.
What fees, if any, are associated with applications?

1. Directors, owners and senior management: any individuals applying for directorship and /or key function roles are required to submit a Change in Personal Details Application through the personal timeline of the ‘Licensee Relationship Management System’ (LRMS).
2. Disclosure thresholds: such applications are required for shareholding individuals / beneficial owners holding 10% or more, whether directly or indirectly, in the licenced entity.
3. Timeframes: MGA does not issue timescales for any type of application. The duration of an application review depends on the completeness of the Personal Declaration Form, and accuracy of the documentation.
4. Fees: for key function roles, there is an administrative fee of 50 euro per person, per role. For beneficial owner application, no additional fees are required (other than the 1500 euro application fee for the Change in Structure Notification).

Ongoing Annual Fees

Outline the applicable annual fees.

A Key Function Certificate is renewed every three years, at an administrative fee of 50 euro per person, per role.

Ongoing Requirements

Outline the ongoing requirements for, including headline licence conditions and expectations of, personal authorisations and licences.

The key function role holders need to accumulate certain Continuous Professional Development (CPD) hours, in line with the MGA ‘Policy on the Eligibility and Ongoing Competency Criteria for Key Persons’.

Personal Sanctions

What powers of enforcement do regulatory bodies have?

In accordance with the ‘Guiding Principles for the Application of Enforcement Measures’, the enforcement measures which the Authority may take, consist of issuing an order or a warrant, or adding, removing, or amending conditions attached to the authorization held by the relevant Authorized Person. In the case of a breach which is not an offence against the Gaming Compliance and Enforcement Regulations (S.L. 583.06), impose an administrative penalty in terms of article 25(3) of the Act. In the case of a breach which is an offence against the Act, and without prejudice to the possibility of offering a regulatory settlement in lieu of criminal proceedings in line with article 25(1) of the Act, file a report to the Executive Police for the commencement of criminal proceedings. The authority may also suspend or cancel a license, as the case may be.