Malta Gaming Authority publishes Guidance Document on Brexit Impact

The Malta Gaming Authority (“MGA”) has published a guidance note (“Guidelines”) laying out the impact that the United Kingdom’s (“UK”) exit from the European Union (“EU”) will have on regulatory affairs within the remit of the MGA. These Guidelines apply to entities established in Malta and operating in the UK, with a UK licence but without a Maltese Licence, or entities established in the UK providing services and supplies within Malta.

They set out transitory measures to ensure minimal impact on regulatory efficiency and ongoing business. In essence operators have 12 months from the effective date when the EU acquis is no longer applicable to the United Kingdom to bring their operations in line with these Guidelines.

Who is Affected?

UK entities holding a Maltese licence

Since according to Article 10 of the Maltese Gaming Authorisations Regulations a person is only eligible to hold a Maltese gaming licence if such person is established within the European Economic Area (“EEA”), after the UK’s exit from the EU  any persons and entities established in the UK and holding an MGA licence will no longer meet this requirement.

This means that such entities will need to transfer that MGA licence to a person established in the EEA or re-domicile to an EEA country.

Entities holding a recognition notice to provide a gaming service, or a critical gaming supply in or from Malta

Pursuant to Regulation 22 of the Gaming Authorisations Regulations the MGA may issue a recognition notice whereby it recognises and relies on licences issued by another EU or EEA authority in order to allow entities to provide a gaming service or a critical gaming supply in or from Malta without the requirement to obtain a MGA licence.

Following the UK’s exit from the EU, the validity of existing recognition notices or prospective applicants of the recognition notice will be impacted. The MGA has confirmed that it will process all applications for a recognition notice submitted prior to the actual effective date when the EU acquis is no longer applicable to the UK however all recognition notices issued will only be valid for the twelve-month term of validity of that recognition notice. Once the term lapses, they will not be renewed.

Therefore, after the UK’s exit from the EU, all entities wishing to continue operating in or from Malta would need to either apply for a licence with the MGA, or apply for a recognition notice in relation to any other EU/EEA licence they may have, for it to be recognised accordingly by the MGA.

The provision of a service and/or supply without the necessary licence or recognition notice constitutes a criminal offence under the Gaming Act (Chapter 583 of the Laws of Malta).

Next Steps

Duly authorised operators will not have to do anything during the transitory period i.e. for 12 months from the actual effective date when the EU acquis is no longer applicable to the UK.

Following the expiry of the above described transitory period, operators intending to continue operating in or from Malta have the following options:

1. Licence holders may either:
   a) transfer their MGA licence from the UK person holding that licence to another company within the same corporate group, which is located in the EEA, subject to the MGA’s prior approval; or
   b) redomicile to an EEA country and duly notify the MGA within thirty (30) days.
2. Operators holding recognition notices who wish to continue to operate in or from Malta must either:
   a) apply for a licence with the MGA under a Maltese or EEA company, or
   b) apply for a recognition notice in relation to any other EU/EEA licence they may have.

Regulatory matters not impacted by Brexit

Notwithstanding the above, the UK’s exit from the EU will not impact the following which continue to be valid:

• The MGA’s recognition of random number generator or game certificates issued according to UK standards;
• The MGA’s acceptance of UK licensed and regulated credit, financial and payment institutions for the purpose of holding player funds;
• The MGA’s acceptance of the use by licensed entities of UK licensed and regulated payment methods;
• The MGA’s acceptance of essential components located in UK territory (without prejudice to the position that may be taken by the European Commission, the European Data Protection Supervisor, and the Information and Data Protection Commissioner in Malta); and
• The MGA’s approval for licensed operators having offices in the UK, including key function holders performing their duties from the UK.

Gaming and gambling operators are advised to be aware of any other potential consequences resulting from Brexit, falling outside the remit of the MGA, including, but not limited to, matters relating to data protection, immigration, duty and copyright.

For further information about how GVZH Advocates can help you with your online gaming legal requirements, kindly contact us on gaming@gvzh.mt.