In-Depth: Gambling Law

Authors: Andrew J. Zammit, Jackie Mallia, Nicholas Scerri & James Bartolo

1. INTRODUCTION

1.1 Definitions

Distinguish between the various types of gambling permitted in your jurisdiction – defining as applicable betting, gaming and lotteries. In this regard, classification of gambling products is an area of particular difficulty, since the terms ‘skill game’, ‘gaming’ and so on are sometimes used differently and treated differently as a matter of law. We ask authors to try to use terms in a uniform way, or at least to explain them so that a reader can compare ‘like with like’ against their own legal vocabulary. Also explain, if possible, how the following are defined in law – either as forms of betting, gaming or lotteries, or as separate products:

– fantasy betting
– pool betting
– spread betting;
– skill competitions, and competitive sports for prizes; and
– free prize draws.

Finally, discuss the distinction between speculative and hedging financial products (e.g., insurance and contracts for difference) and gambling products.

Is betting on the results of lottery draws (as opposed to entering the draw) regulated? Is betting on the result of the domestic national lottery permitted?

Andrew J Zammit, Jackie Mallia and James Bartolo[1]

Maltese law permits both online and land-based gambling, and the following forms of gambling are catered for: amusement games, casino gaming, commercial tombola games, commercial communication games, gaming devices, remote gaming, sports betting, the National Lottery and other lotteries, and non-profit games.

Gaming

Maltese law uses the term gaming to cover all gambling activities. The Gaming Definitions Regulations 2018 define gaming as any activity consisting of participating in a game of chance or a game of skill, offering a gaming service or making a gaming supply.

An operator provides a gaming service when it makes a game available for participation by players (whether directly or indirectly, and whether alone or jointly with others) as an economic activity.

On the other hand, a gaming supply is defined as a supply, directly or indirectly, of goods or services, in relation to a gaming service, which is either a critical, material  or ancillary gaming supply, but which does not include the provision of a key function, as outlined in Section III.

Authorisation is defined as a licence, approval, certificate, recognition notice or similar instrument issued by the Malta Gaming Authority (MGA or Authority), authorising a person to provide a gaming service, gaming supply or a key function.

Licence is defined as a gaming service licence or a critical gaming supply licence and may be issued as a singular or corporate group licence for each respective service.

A game of chance means an activity the outcome of which is determined by chance alone or predominantly by chance and includes activities the outcome of which is determined depending on the occurrence or outcome of one or more future events.

Skill games

A game of skill or skill game is defined as 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 Maltese law. The MGA has the sole discretion to determine whether an activity is classified as a game of chance, a game of chance and skill or otherwise, and specific rulings may be obtained from the MGA upon submission of a request outlining the proposed game in detail.

Skill games do not require a licence unless they are deemed by MGA to be controlled skill games, in accordance with the considerations outlined in the Sixth Schedule of the Gaming Authorisations Regulations.

The burden of proving whether an activity is a skill game (and therefore not licensable) or a controlled skill game rests on the party operating or promoting the activity.[2]

Fantasy sports

The only controlled skills game ruling[3] issued by the MGA so far addressed fantasy sports, classifying them as controlled skills games, and therefore licensable. The MGA ruling defined fantasy sports as:

[A] contest offered by means of distance communications, wherein players commit a consideration of monetary value, whether in the form of a stake, periodic subscription or the purchase of in-game items which provide an advantage to the player, to compete against other players for the possibility to win a prize of money or money’s worth.

A fantasy sport contest is one where the outcome is determined by the accumulation of the statistical results of the performance of a number of individuals competing in actual sporting events.

The ruling excludes from the definition of fantasy sports the forecasting of the score of sporting events, point spread, or the result of any other future occurrence of one or multiple events. Essentially, the winning outcome must be predominantly determined through the skill or knowledge of the player. The onus of proving the existence of all these factors rests entirely with the applicant.

Lotteries

The National Lottery is Malta’s main lottery. The operation of all National Lottery games is exclusively granted through a concession, which was last awarded to National Lottery plc in November 2021. Subsequently, the MGA granted the gaming licence in July 2022, valid for 10 years.[4]  The provision of online lotteries is also allowed under Maltese law, and in this respect a remote gaming licence would need to be obtained.

Free prize draws

These types of games draws are exempt from requiring a licence in Malta, based on the principle that games of chance that do not require a stake to enable participation or do not envisage the possibility of a prize are classified as exempt.[5]  A gaming service or a critical gaming supply that is provided in relation to an exempt game does not require a licence or other authorisation.[6]

In the case of doubt, the MGA has the sole discretion to conclusively determine whether a game should be classified as exempt.[7] 

De minimis games

Directive 3 of 2019 came into force on 1 February 2019. This Directive was issued in order to establish which games classify as a de minimis exempt game in terms of the Second Schedule to the Gaming Authorisations Regulations. Pursuant to Article 5 of Directive 3 of 2019, a de minimis game shall be a game that satisfies all of the following criteria cumulatively:

a lottery or raffle-type game;

the value of the stake to participate in the game is not more than €1;

the value of the prize is not more than €100; and

the result of the game is not based on the outcome of another game.

The Directive provides that each person or organisation cannot organise more than 10 de minimis games in any calendar year, and that no more than two de minimis games may be organised in any calendar month.

1.2 Gambling policy

Is gambling generally prohibited in the jurisdiction? Or is it generally permitted subject to regulation? Or is it seen as an industry where licences are granted to encourage gambling (either remote or land-based)? If there are particular religious, historical or political reasons behind this policy, summarise very briefly.

Since the early 2000s, Malta has secured its position as a leading, serious and well regulated European remote gaming jurisdiction and is estimated to host around 10 per cent of the world’s online gaming companies by trading volume. Malta has continued its drive to innovate the legal framework to keep up with industry and technological developments, and in August 2018, a new legal framework was implemented to address market and technological developments and consumer trends, providing a modern, sophisticated and solid framework for the regulation of remote gaming operators based in Malta or seeking to target the Maltese market.

1.3 State control and private enterprise

To what extent is gambling owned and operated by the state rather than private enterprise? Mention if, for example, there are state-owned lotteries, and protections against private competition. Are the licences available limited to such an extent that an oligopoly or monopoly exists?

Gambling operations are not owned or operated by the state. However, the National Lottery may only be conducted under ministerial authority, or by any person in whose favour a concession is granted. Where government policy requires that certain gaming services may only be provided when in possession of a government concession, the MGA shall not issue a licence for the carrying out of such a gaming service unless the applicant is in possession of a relevant and valid government concession. This is the case for the country’s National Lottery, currently exclusively operated by National Lottery plc.

1.4 Territorial issues

Indicate whether gambling is regulated and licensed nationally or subnationally by states or municipalities, etc. Do particular localities have favoured status for gambling – for example, tourist islands or reservations where particular groups have autonomy?

Gambling is regulated and licensed nationally.

1.5 Offshore gambling

Describe the attitude of the authorities to offshore gambling operators who offer products to citizens of your jurisdiction. You should touch on the following:

-the ability and will of regulatory or law enforcement authorities to bring actions against foreign operators;

-the legal basis for acting against foreign operators; and

-mechanisms of control – advertising, control of access to internet and control of funds flow and payment providers.

The Gaming Act provides that where this Act or any other regulatory instrument prescribes an activity of whatever nature requires an authorisation to be performed, it shall be an offence to perform such an activity or to promote, aid, abet or otherwise facilitate such an activity unless it is duly authorised.[8]

If an operator is targeting Maltese players, is offering gambling from Malta or through a Maltese entity, and is not licenced by the authority but is authorised or licensed to operate under any European Union (EU) or European Economic Area (EEA) Member State or by any jurisdiction or territory approved by the MGA, such operator may apply for a recognition notice certificate issued by the MGA for legal and regulatory coverage to operate from or target the country.

Following Brexit, entities operating in or from Malta by virtue of an authorisation issued to them by the UK Gambling Commission are still eligible to apply for recognition with the MGA. This is pursuant to the UK being a state that is deemed by the Maltese Authority to offer safeguards largely equivalent to those offered by Maltese law.[9]

Since it is not in the MGA’s regulatory scope to issue an exhaustive list of approved jurisdictions that may be targeted by MGA-licensed operators, in the case of B2C operators, each operator is expected to ensure that the targeting of any games to players based in any jurisdiction outside of Malta is so targeted in full compliance with the laws of that foreign jurisdiction. The MGA requires the terms and conditions of each licensee to state that it is the players’ responsibility to establish whether their gaming activity is legal according to the laws of the country where such player is based. In the case of B2B operators, the MGA will only allow the cross-border provision of these B2B services to B2Cs licensed by competent authorities within the EU or EEA, or in any other jurisdictions such that the B2B operator is satisfied that their end B2C customers are subject to regulatory supervision by their regulators.

2. LEGAL AND REGULATORY FRAMEWORK

2.1 Legislation and jurisprudence

Set out the basic legal framework applicable in the jurisdiction, identifying the main legislation and the area it covers. If particular cases have shaped the law, give details.

As of March 2021, the legislative framework governing gaming in Malta consists of the Gaming Act, Chapter 583 of the Laws of Malta and subsidiary legislation 583.03–583.12. The MGA has also issued a number of directives and guidance notes between 2018 and 2023 that are binding on licensees and provide additional guidance to operators in adopting and implementing the laws and regulations.

2.2 The regulator

Identify the regulator or regulators that govern the industries identified in the ‘Definitions’ section above (Section I.i).

The MGA is the primary regulatory body responsible for the governance of all gaming activities in Malta, and this includes both land-based and remote gaming sectors. Its main functions include the issuance of licences, approvals, certificates and recognition notices and the monitoring of the conduct of operators in the field. Furthermore, the MGA is responsible for preventing, detecting and combating criminal activity in the gaming sector, as well as ensuring that games are operated and advertised fairly and responsibly.

On 15 December 2023, the MGA announced the appointment of Charles Mizzi as the new CEO following Carl Brincat’s resignation.

2.3 Remote and land-based gambling

Does the legal system distinguish between remote (online) gambling and bricks-and-mortar (premises-based) gambling? What are the basic differences between the two forms of regulation? Alternatively, explain if one or both forms are prohibited.

While both remote and land-based gambling are permitted in Malta, there are some differences in the regulations that apply to each. By way of example, applicants for a land-based gaming licence are required to seek and obtain approval not only for the gaming devices used, but also for the premises from which the licensed gaming devices are operated. The Gaming Authorisations Regulations[10] provide that operators in both sectors require a licence, unless exempt.[11]

2.4 Land-based gambling

Describe the primary venues for land-based gambling in your jurisdiction:

-casinos;

-betting shops;

-amusement arcades or other places where gaming machines can be located; and

-lottery ticket sale venues.

Indicate whether, for example, such premises are limited in number, or confined to specific locations.

Casinos

Casinos are licensed by the MGA; however, obtaining such a licence is dependent on the applicant holding a specific concession from the government to operate the casino. There are currently four licensed casinos operating in Malta.

Betting shops and arcade centres         

Controlled gaming premises[12] such as betting shops and arcade centres must be licensed, and any person renting out or allowing another person to use premises as gaming premises must ensure that the lessee is in possession of a valid approval or licence. Controlled gaming premises differ from gaming premises (casinos) since the latter requires a government concession, whereas controlled gaming premises only need a licence from the Authority.

Bingo halls

Also known in Malta as tombola, these facilities offer the Spanish game of bingo. The numbers range from one to 90, and participants can win cash for the line, house or progressive jackpot. There are currently four approved bingo halls on the island.

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.[13]

2.5 Remote gambling

Briefly outline how operators can offer remote gambling (if at all). For some jurisdictions this will involve a discussion of the limited ability to offer gaming through remote tablets within premises, or geo-restricted gambling. For others this will include the location of servers in the regulated jurisdiction, with gambling being effectively exported to citizens in other jurisdictions.

Any person providing or carrying out a gaming service[14] or providing a critical gaming supply[15] from Malta or to any person in Malta, or through a Maltese legal entity, must possess a valid licence or be explicitly exempt from the requirement of a licence[16] under the Gaming Act or any other regulatory instrument.

The MGA may issue a gaming service licence (B2C) or a critical gaming supply licence (B2B), where both licences are issued with one or more of the below game types:

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, including roulette, blackjack, baccarat, poker played against the house, lotteries, secondary lotteries and virtual sports games.

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 his or her own risk by managing the odds offered to the player.

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, betting exchange and other commission-based games.

Type 4 gaming services: controlled skill games.[17] 

In instances where a game displays element that may be categorised under one or more of the game types, the MGA has complete discretion to categorise the game as the type it believes most closely reflects the nature of the game.[18]

Corporate group licences

Where more than one company within a corporate group would like to obtain a licence, an application for a B2B or B2C corporate group licence may be submitted to the MGA. A B2C corporate group licence may cover entities within the structure that provide critical gaming supplies solely to other entities within the same group. In such instances, an additional B2B licence would not be required by such entities. However, should entities within the B2C corporate group licence provide critical gaming supplies in or from Malta to entities outside of the corporate group, a separate B2B licence would be required. Corporate entities that are to be covered by the corporate group licence must:

• be established in Malta or another EU or EEA jurisdiction. For UK entities, these must have an establishment[19] set up within the EU or EEA;
• be at least 90 per cent owned by the same shareholder or ultimate beneficial owner[20];  and
• provide to the group a service related to gaming (whether critical, material or non-material).

Recognition notice

Any persons offering licensable games in or from Malta, or through a Maltese-registered entity without an authorisation issued in terms of these Maltese regulations, but under an authorisation issued by another Member State of the EU or EEA or a state deemed by the MGA to offer equivalent safeguards to those offered by Maltese law, may apply to the MGA to have that authorisation recognised in Malta through the issuing of a recognition notice. Once obtained, a recognition notice grants its holder the same benefits as an authorisation issued by the MGA for the purposes of providing a gaming service or critical gaming supply in or from Malta.[21]

2.6 Ancillary matters

Quite often regulatory regimes also license manufacturers of, for example, key equipment for the industry – such as casino tables or roulette wheels, gaming machines and computer software. If so, please describe briefly the range of ancillary materials that are licensed (and whether gambling operators must source their equipment and software from licensed operators).

Indicate whether individuals holding particular positions within a gambling operator must hold a personal licence or be otherwise approved by the regulator.

Junkets

Authorised persons holding a licence from the MGA or a concession from the government of Malta seeking to hold a junket event[22] are required to apply to the MGA for prior approval.

Amusement machines

Despite their exempt status, amusement machines cannot be placed on the market or made available for sale or distribution or use in any manner in any gaming premises unless the machine has been registered with the MGA, and any applicable administrative fees paid.

Low-risk games

Certain low-risk games, such as non-profit games where the value of the stake does not exceed €5 per player, merely require a low-risk games permit from the MGA. This permit is valid only for the singular event or events for which it is granted and expires once the event or events are concluded. Furthermore, it cannot be renewed or transferred without the MGA’s prior approval.

Cruise casinos

Cruise casino operators require a cruise casino permit from the MGA. However, this permit is only valid for a term not exceeding the time during which the cruise ship is moored at or within Maltese territory, and only in relation to registered passengers of the cruise ship. Cruise casino permits are non-transferable and limited to all cruise ships[23] except for vessels or aircraft flying or entitled to fly the flag of Malta, or registered in Malta, while the vessel or aircraft is navigating or flying outside and beyond the territorial waters of Malta.

2.7 Financial payment mechanisms

Indicate whether there are any specific restrictions on certain types of payment mechanism for gambling. In particular, we are seeing different attitudes taken by different regulators in relation to the use of cryptocurrencies, and Bitcoin in particular. If such tokens are permitted, briefly confirm this point, as it is important to a number of operators.

Authorised persons may only outsource payment processing services[24] to entities holding an MGA authorisation, whether by virtue of a corporate/singular gaming licence or recognition notice certificate.

The MGA policy on the use of distributed ledger technology (DLT) by authorised persons outlines the parameters whereby operators may accept virtual financial assets (VFAs) or virtual tokens, the latter within a closed-loop ecosystem. Applicants may also use innovative technology arrangements, such as smart contracts (contemplated by the Innovative Technology Arrangements and Services Act[25]) and DLT platforms. Authorised persons shall be required to submit a legal opinion signed by an advocate warranted in the EU or EEA confirming the nature of the DLT assets in terms of the Virtual Financial Assets Act (Chapter 590 of the Laws of Malta), as well as identifying any outsourced third-party service providers providing custodial wallet services or accepting VFAs from players (while allowing operators to deal solely in fiat currency).

3. THE LICENSING PROCESS

3.1 Application and renewal

Outline the process for applying for a licence, describing the role of the licensing authority, the eligibility requirements for applicants, the information applicants must provide to the licensing authority, the length of time required for the process, the approximate cost of the licence, the renewal procedure, etc.

The application process

The MGA does not provide any timeframes for reviewing and issuing gaming licences, however the efficiency of such a review greatly depends on the quality of documentation submitted and the complexity of the application.

Fit and proper

The MGA conducts a fit and proper exercise by assessing all individuals who are involved in the financing and management of the proposed operation

The MGA undertakes this exercise to ensure that all individuals concerned are competent to perform the functions allocated and also to provide the necessary assurances in the context of the prevention of money laundering and terrorist financing. All relevant persons must be able to satisfy a number of criteria, mainly honesty, integrity, reputation, competence, capability and good financial repute. The Authority also conducts probity investigations with other national and international regulatory bodies and law enforcement agencies.

Key functions

Key functions consist of important functions, roles or tasks carried out in connection with a gaming service or a gaming supply, and the roles that are considered to be key functions for both B2B and B2C operators are outlined in the Gaming Authorisations and Compliance Directive[26].

A person may be granted a certificate of approval to perform more than one key function, and the same key function may be provided by more than one person provided that no person may exercise key functions that are deemed to be conflicting with each other, in line with the Key Function Eligibility Criteria Policy[27]. An application for a key function certificate is subject to a fee of €50 per person, per role, and the certificate is valid for a period of three years, which may be renewed upon application to the MGA.

Business planning

The MGA conducts an in-depth analysis of the applicant’s business plan, which must consist of both a detailed narrative outlining the proposed business activities to be undertaken by the company and also three-year detailed financial forecasts of the proposed operations.

Technical and operational documentation

Through this stage, the Authority reviews a list of technical and operational policies and procedures relating to the applicant, as set out in the system documentation checklist[28].

Systems audit

Once the business plan and company policies and procedures have been reviewed, the MGA will invite the applicant to implement the operation on a technical environment in preparation for going live. Within the 60-day period, a system audit is carried out and operators may engage any approved audit service provider (ASP)[29] of their choice. Here, the live environment will be examined against the proposed application.

A company providing audit services may apply to the Authority to be added to the list of approved service providers. On 7 December 2022, the Authority issued a revised audit service provider policy, noting that ASPs may also be appointed to carry out systems reviews, statutory audits relating to audited financial statements, as well as agreed-upon procedures in accordance with the International Standard on Related Services 4400.[30]

Upon successful completion of the certification process, the MGA issues a 10-year licence to the licensee for the approved gaming operation.

Systems review

After the first year of operation, the licensee shall be required to undergo a systems review by an ASP on the live environment to demonstrate functionality and provide evidence of compliance with the provided checklist.

Compliance audit

Throughout the licence life cycle (10 years), a compliance audit may be requested by the Authority on a risk-based approach and as frequently as deemed necessary.

3.2 Sanctions for non-compliance

Outline the main offences and sanctions relating to breach of gambling law and licence terms. Indicate the range of sanctions available for operating without a licence and the sanctions for licensed operators who break the rules.

Also indicate if criminal liability may be attached to those involved in money transfers for gambling, those who advertise on behalf of operators, ISPs who permit access to gambling content and criminal liability for individual gamblers. 

The MGA may take the below enforcement measures:

-an order directing the operator to do, refrain from, or correct conduct or operations;

-a warning directing the operator to do or refrain from doing something in the future;

-a condition to any authorisation;

-an administrative penalty in terms of Article 25(3) of the Gaming Act for breaches that are not an offence against the Gaming Act[31]; 

-an executive police report for breaches against the Gaming Act, and without the possibility of offering a regulatory settlement in lieu of criminal proceedings in line with Article 25(1) of the Gaming Act; and

-suspension or cancellation of authorisation.

The Third Schedule to the Gaming Act outlines a list of criminal offences that include, inter alia, the provision of a service or supply without the necessary authorisation, aiding, abetting or otherwise such a provision, or failing to effect payments to the Authority when lawfully due. Any person found guilty of a breach stipulated in the Third Schedule is liable to a fine of between €10,000 and €500,000 or imprisonment for up to five years, or both.[32] 

4. WRONGDOING

Outline whether and how issues relating to money laundering, organised crime and match fixing are dealt with by the regulator or other law enforcement bodies. Since this is a complex area, it may be sufficient to indicate, for example, that licensees must take steps to prevent crime and other wrongdoing, and any significant developments or initiatives from the regulator or other law enforcement bodies.

Match fixing

Both B2C and B2B operators are to notify the Authority of any instances relating to suspicious betting. The Authority has also introduced an alerting process whereby licensees are alerted about any suspicious betting activities. This process is beneficial to licensees since it ensures operators are aware of suspicious betting activities on the MGA’s radar, allows operators to review and enhance their own monitoring systems and increases awareness of risks being faced across the sector.[33]

Money laundering and the funding of terrorism

The Financial Intelligence Analysis Unit (FIAU) is the Maltese enforcement body tasked with the responsibility for preventing money laundering and countering terrorist finance. The Prevention of Money Laundering and Funding of Terrorism Regulations (PMLFTR)[34], introduced in 2018, subjects gaming operators to the obligation of conducting higher levels of customer due diligence based on risk analysis and imposes steep penalties in the case of non-compliance.

The FIAU has published two separate sets of implementing procedures in terms of the PMLFTR applicable to both land-based casinos and the remote gaming sector.[35]  These implementing procedures focus on specific areas of the PMLTFR and their application at an industry-specific level.

In April 2021, the FIAU in collaboration with the MGA and the Malta Financial Services Authority published a document entitled ‘The Business Risk Assessment’, providing high-level key findings about business risk assessments carried out by subject persons in line with their obligations under the PMLFTR and FIAU Implementing Procedures.[36]

5. TAXATION

Set out whether the taxation of gambling is based on profits (i.e., net win from gaming) or turnover. Do rates depend on the type of gambling?

Briefly place gambling taxes in the context of other taxes on corporates – for example, corporation tax and sales tax.

Do gamblers pay income tax on winnings?

All B2C operators are subject to a gaming tax calculated at a rate of 5 per cent on the gross gaming revenue generated from the said gaming services generated by Maltese players during the relevant tax period. This tax is levied on the gaming revenue, as defined, 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. Gaming devices levies range between 12.5 and 30 per cent.

Operators are obliged to pay a compliance contribution as well as other applicable licence fees to the MGA. 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.[37]

Based on Malta’s full-imputation system, upon 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 the dividend was paid.

Value added tax (VAT) is applied at the standard rate of 18 per cent on every taxable supply of goods, services or importation, with lower rates applicable to certain sectors. Two sets of guidelines[38] have been published  in relation to the previous gambling VAT exemption, which became effective on 1 January 2018, and provide a specific list of exemptions applicable to particular gaming activities, wherein these VAT exemptions are exemptions without credit.[39] 

6. ADVERTISING AND MARKETING

Is the advertising of gambling opportunities permitted in the jurisdiction? Distinguish between advertisements for gambling within the territory and advertisements for offshore gambling and whether there are penalties for breach of advertising and marketing rules.

Authorised gaming operators are permitted to advertise and market their products and services subject to various restrictions aimed at protecting minors and vulnerable persons.[40] The same restrictions apply to persons providing any service to, or acting in collaboration with, licensed and authorised persons offering a licensable game.

Should the MGA determine that there has been a breach of advertising or marketing rules, it is empowered to order the modification, retraction, termination of the respective advert or marketing instrument, or any administrative action it deems necessary, including the issuing of administrative sanctions such as fines.

7. YEAR IN REVIEW

Give details of any significant developments in case law, legislation, enforcement and the market.

On 24 August 2023 the Authority issued a public statement clarifying its position on the controversial Bill 55, stating that such a provision shall only be applicable when the action (whether taken by an operator against a player or vice versa) conflicts or undermines the legality of the Maltese framework.

On 8 November 2023 the MGA introduced the Environmental, Social and Governance (ESG) Code of Good Practice, assisting remote gaming firms in adhering to optimal standards and sustaining a stance conducive to adequately addressing the changing demands of key stakeholders in the industry. Despite not mandatory, the MGA strongly encourages all licensees to adopt the ESG Code.

8. OUTLOOK AND CONCLUSIONS

Outline any developments in gambling law that are likely to impact on the law and practice in your jurisdiction. Examples might include a challenge to the national laws from the European Commission, new legislation, a pending or recently decided court case, or the emergence of a new form of gambling.

In addition to the various new policies and directives issues by the MGA as described earlier, on 1 February 2023, the Authority issued a public consultation proposing an Authorised Application Managers Regulation and Policy Document. Following the closure of this period (15 March 2023) and the issuance of such Regulation and Policy, to take ownership of MGA-related application submissions, any third parties engaged by licensees or proposed licensees would need to apply to the MGA to be authorised to act as application managers.

The MGA is also currently working closely with relevant stakeholders to finalise the Policy on Minimum Capital Requirements. The proposed policy aims to uphold the financial viability of remote gaming operators, preserve the integrity of the gaming sector, and remain attuned to contemporary circumstances. 

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[1] Andrew J Zammit is the managing partner, Jackie Mallia is a senior associate and James Bartolo is an igaming advisor at GVZH Advocates.

[2] Gaming Authorisations Regulations 2018, Article 7.

[3] Ruling issued in terms of Regulation 8 of the Gaming Authorisations Regulations, issued on 1 August 2018.

[4] National Lottery (Continuation of Concession and Licence Terms) Ruling, Directive 1 of 2019.

[5] Gaming Authorisations Regulations 2018, Second Schedule Section 1(c).

[6] Gaming Authorisations Regulations 2018, Article 5(1).

[7] Gaming Authorisations Regulations 2018, Article 5(2).

[8] Gaming Act, Chapter 583 of the laws of Malta, Article 13.

[9] Gaming Authorisations Regulations, Article 22.

[10] Subsidiary legislation 538.05 of the Laws of Malta.

[11] In accordance with the Second Schedule of the Gaming Authorisations Regulations.

[12] Gaming Definitions Regulations, Subsidiary Legislation 583.04 of the Laws of Malta.

[13] Directive 1 of 2019 (MGA), Article 7.

[14] That is, making a game available for participation in by players, whether directly or indirectly, and whether alone or with others, as an economic activity (Article 2, Gaming Definitions Regulations, Subsidiary Legislation 583.04 of the Laws of Malta).

[15] Supply and management of material elements of a game; and/or supply and management of software, whether as a stand-alone  or  as  part  of  a  system,  to  generate, capture, control or otherwise process any essential regulatory  record  and,  or  the  supply  and management of the control system itself on which such software resides (First Schedule, Gaming Authorisations Regulations).

[16] The following games are each deemed to be exempt: a game of skill that does not require a stake to enable participation or does not envisage the possibility of a prize; a game of skill that requires a stake to enable participation and offers the possibility of a prize, unless the MGA issues a ruling determining that such a game of skill is a controlled skill game; a game of chance that does not require a stake to enable participation, or that does not envisage the possibility of a prize, unless otherwise determined by the MGA in a binding instrument; a de minimis game; a licensable game on board any vessel flying or entitled to fly the flag of Malta or registered in Malta while said vessel is navigating outside the territorial waters of Malta; and Second Schedule to the Gaming Authorisations Regulations, Subsidiary Legislation 583.05 of the Laws of Malta.

[17] Article 8, Gaming Authorisations Regulations, Subsidiary Legislation 583.05 of the Laws of Malta.

[18] First Schedule, Gaming Authorisations Regulations, Subsidiary Legislation 583.05 of the Laws of Malta.

[19] The setting up or the acquisition of a legal person, including through capital participation, or the creation of a branch or representative office in the territory of a party, with a view to creating or maintaining lasting economic links, Trade Deal to Article 10 of subsidiary legislation 583.05.

[20] Corporate group definition, Gaming Definitions Regulations, Subsidiary Legislation 583.04.

[21] Article 22, Gaming Authorisations Regulations, Subsidiary Legislation 583.05 of the Laws of Malta.

[22] A Type 3 gaming service event, with specific start and end dates, which, in view of its nature, profile and prestige can induce high quality players to such gaming premises to compete in said event, and which has been specifically approved as such by the Authority.

[23] These cruise ships must be passenger ships used for pleasure voyages with a minimum of three ports of call in three different jurisdictions, which may or may not include Malta, having amenities that include lodging, facilities for all passengers and a minimum capacity of 150 passengers. Article 30, Gaming Authorisations Regulations, Subsidiary Legislation 583.05.

[24] This shall refer to the acceptance of deposits from customers, the processing of withdrawals, and in general the control over the relevant payment accounts and the contractual arrangements entered into with credit, financial or payment institutions which process payments on behalf of licensees. Whilst such services should only be obtained from licensed institutions within the EU/EEA or from an equivalent jurisdiction (as may be approved by the Authority from time to time) and subject to the Authority’s approval, the services offered by such institutions themselves shall not be deemed as outsourcing given that in the absence of such service, the authorised person would not be in a position to perform the service in-house.

[25] Chapter 592 of the Laws of Malta.

[26] Article 6(1) and (3) of the Gaming Authorisations and Compliance Directive.

[27] https://www.mga.org.mt/app/uploads/Policy-on-the-Eligibility-and-Ongoing-Competency-Criteria-for-Key-Persons.pdf

[28] https://www.mga.org.mt/app/uploads/MGA-F-001-System-Documentation-Checklist-v5.xlsx

[29] Current approved system and compliance auditors are BDO Technology Advisory Ltd; Capstone Assurance Ltd; Deloitte Services Ltd; eCOGRA Ltd; FACT Technologies Ltd; Finanz-Audit Ltd; Gaming Associates Europe Ltd; GCS Assurance Malta Ltd; Global Lab Ltd; GLI Europe; Grant Thornton; iTech Labs Italia SRL; KPMG; Kyte Consultants Ltd; Malpep Ltd; MAZARS Consulting Ltd; Nouv Audit Ltd; PriceWaterHouseCoopers; QUINEL Ltd; Radix Technologies Ltd; RSM Malta; Slovenian. Institute of Quality and Metrology, Ljubljana.

[30] International Standard on Related Services (ISRS) 4400.

[31] Third Schedule, Gaming Act CAP 583.

[32] Chapter 583 of the Laws of Malta, Gaming Act, Article 23(1).

[33] Updated Measures for Sports Betting Integrity, October 2021.

[34] Subsidiary Legislation 373.01of the Laws of Malta.

[35] Implementing procedures may be accessed via the following link: https://fiaumalta.org/consultation-publications/#implementing-procedures

[36] The Business Risk Assessment, April 2021.

[37] Gaming Licence Fees Regulations, Subsidiary Legislation 583.03 of the Laws of Malta.

[38] Entitled (1) ‘Guidelines on Item 9 of Part Two of the Fifth Schedule to the VAT Act’ and (2) ‘Guidelines for the determination of the taxable value of gambling and betting services’. These guidelines may be accessed via the following link: https://cfr.gov.mt/en/vat/guidelines_to_certain_VAT_Procedures/Documents/19.%20Guidelines%20on%20Gambling%20and%20Betting%20Actiivities.pdf.

[39] Fifth Schedule, VAT Act, Chapter 406 of the Laws of Malta.

[40] Advertising and marketing is governed by (1) the Gaming Commercial Communications Regulations, Subsidiary Legislation 583.09, and (2) as to Advertisements, Methods of Advertising and Directions Applicable to Gambling Advertisements, Subsidiary Legislation 350.25.