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- White Paper amending Malta’s Gaming Legal Framework issued by the Malta Gaming Authority
White Paper amending Malta’s Gaming Legal Framework issued by the Malta Gaming Authority
The much anticipated overhaul to gaming regulations has finally been published. The proposed reform will seek to repeal all current legislation and replace it with a single Act of Parliament (“The Gaming Act”), in conjunction with subsidiary legislation, directives and MGA guidelines. In this way, regulatory burdens will decrease and decision making by the MGA will become faster. Proposals include the improvement of best-in-class consumer protection standards, responsible gaming measures, risk-based approach to regulation, standards to encourage innovation and development and further empowering the MGA with regards to compliance and enforcement. This proposed reform adopts a more progressive approach towards regulation to cater for innovative sectors.
The main features which the White Paper proposes are as follows:
- The current multi-licence system will be replaced by a system of two licences: a B2C licence and a B2B licence.
- A fixed licence fee of €25,000 is due every twelve months and a variable fee is calculated on GGR for B2C licensees. B2B licensees, who are game providers are subject to a fee ranging between €25,000 and €35,000, depending on GGR. On the other hand, providers of back-end services or control system will be subject to a fee between €3,000 and €5,000 per year.
- A move towards an objective-based regulatory approach
- The regulatory scope will be widened to extend the MGA’s oversight and provide for intervention
- The MGA’s powers regarding compliance and enforcement will also be extended, in keeping with developments on AML and FT obligations.
- The Key Official role will be divided into different key functions within a licensed activity, requiring approval, for direct scrutiny and targeted supervisory controls.
- The player protection framework will be improved by the formalisation of the mediatory role of the MGA’s Player Support Unit.
- New and more effective processes for criminal and administrative justice will be introduced, including appeals from decisions of the Authority to the Administrative Review Tribunal. (administrative and criminal offences will also be recognised separately).
- A concept of an administration to protect distressed operations will be introduced and if required, assist in winding down the operation to protect jobs and player funds.
- Automated reporting will be introduced, aiding in observing regulatory obligations and reinforcing the MGA’s oversight
- The MGA’s role in the fight against manipulation of sports competitions will be enhanced by introducing new obligations on operators to monitor sports betting and report suspicious bets.
- The Authority is expected to take a positive view on cryptocurrencies accepting them as a possible depositing and withdrawal option for players.
- Taxation will be streamlined into one flow with two main layers.
- B2B licensees will be exempted from gaming tax, which will increase Malta’s competitiveness as a hub for such service providers. Gaming tax previously payable as a fixed fee will be removed, and will now be based on the gaming revenue generated by end customers based in Malta. B2C licensees will have to pay 5% on GGR derived from end customers located in Malta.
We shall be keeping you abreast of regulatory developments surrounding the gaming industry in Malta. Given our specialisation in this sector we are well positioned and prepared to assist our clients migrate to the new licencing system in a seamless manner when the relevant processes are set-out by the Malta Gaming Authority.
If you require any further information, please do not hesitate to contact Mr. Kris Baron or Mr. Nigel Zarb.