The new Malta Gaming Regulatory Framework came into effect from 1st August 2018.
Various laws and regulations have been enacted to create a regulatory framework to cater for the activities licensed by the Malta Gaming Authority (“MGA”).
This new framework seeks to expand the iGaming regulatory scope by strengthening the MGA’s oversight and supervisory role to better achieve the regulatory objectives in line with European legislation.
Find below all the mains points of the overhauled Gaming Regulatory Framework.
The Remote Gaming Regulations, 2004 were repealed by the Gaming Act (the “Act”) which came into force in August of 2018, and which together with several other subsidiary legislation make up the Maltese Gaming Regulatory Framework.
The new Gaming Act elevated the jurisdictional profile of Malta from a regulatory perspective by strengthening the MGA’s supervisory role. Specifically, the compliance and enforcement functions to better achieve the regulatory objectives, in line with concurrent developments relating to anti-money laundering and combating the funding of terrorism.
The Act also split the role of what was previously known as the Key Official into various key functions to enhance direct scrutiny and targeted supervision controls.
It also strengthened the player protection framework by formalising the role of the MGA’s Player Support Unit (player support centre) as a mediator between aggrieved players and operators.
So now, Players can reach out to MGAs’ Player Support Centre directly for any problems they might be experiencing with an operator, licensed by the Malta Gaming Authority.
It also envisaged new and more effective processes for criminal and administrative justice.
The other important areas of focus included:
Consumer protection standards;
Responsible gaming measures;
Reporting of suspicious sports betting transactions in the fight against the manipulation of sports competitions; and
Objective-oriented standards to encourage innovation and development.
Learn more about The Gaming Act here.
Depending on the different categories of games, and depending on the risk they pose to consumer protection and integrity of the games and the operation, MGA adopted different Risk-Based approaches.
Risk-based regulation and supervision is the essence of the regulatory proposals.
The Gaming Act also brought about a transformation from vertical to horizontal regulation and licensing.
It reflected a readiness to embrace technology convergence across various channels of distribution of games.
Learn more in detail about the Player Protection Regulations here.
Simplification of Licensing Procedure (Two Licences)
As stated by the new regulatory approach, the multi-license system was replaced with a two-licence system:
B2C Gaming Service Licence; and
B2B Critical Gaming Supply Licence.
Both licences cover different types of activities across multiple distribution channels. This was primarily done to reduce unnecessary bureaucracy. Consequently, the requirement of a new licence per class of games was eliminated.
The description/definition of the various gaming services falling within the Gaming Licence is clearer and more precise than the previous definitions previously found in the Remote Gaming Regulations (online gaming regulations).
Duration of the Licence
Licences issued by the MGA are no longer issued for a period of 5 -years. The licence term has now been extended up to 10 years.
The regulations also provide for a licence with limited duration, leaving the term open for the Malta Gaming Authority to establish the gaming activities thereunder. This ‘limited duration licence’ is ideal to be used in a disaster recovery scenario.
Gaming Authorisations Regulations
The MGA is now in a position to provide different types of authorisations such as permits, approvals or certificates.
As per the consultation document issued in 2017, now there is a different regime for promotional games. It recognises that the provision of such gaming services is usually of secondary nature and in furtherance to a primary scope being generally independent of the provision of gaming services per se.
Get in-depth knowledge about Gaming Authorisations Regulations.
New Licence Fee
The new iGaming Regulatory Framework introduced an annual fixed Licence Fee of €25,000 annually, together with a variable Compliance Contribution fee depending on the gaming revenue generated.
The minimum payable Compliance Contribution ranges from a fee of €15,000 applicable to Type 1 Gaming Services providers to €25,000 applicable to Type 2 and Type 3 Gaming Services providers. A reduced Compliance Contribution fee of €5,000 is applicable to Type 4 for skilled games providers. Moreover, a maximum capping of either€375,000, €500,000 or €600,000, depending on the type of games offered shall apply. The variable compliance contribution fee is payable monthly.
Critical Gaming Supply providers are also subject to a licence fee depending on the revenue generated. In this regard, annual licence fees range between €25,000 and €35,000.
Providers of back-end services, or a control system whereby essential regulatory data is captured, stored or otherwise processed, are subject to a fee ranging between €3,000 and€5,000 annually.
Learn more about Malta gaming license cost and how to get it.
New Taxation Model for iGaming in Malta
In accordance with the new Gaming Act, all B2C Gaming Services operators are required to pay gaming tax amounting to 5% of the Gaming Revenue generated from Malta-based players.
Conversely, B2B Critical Gaming Supply operators are exempt from such gaming taxes.
Additionally, gaming companies are subject to a 35% corporate tax in Malta, either if they are companies incorporated and/or having management and control in Malta or companies deriving or raising income in Malta, together with the Compliance Contribution and Gaming Tax.
To know more about the corporate tax and income tax returns, read ‘A Guide To Malta Corporate Tax'.
The Malta Gaming Authority (MGA) is considered as a leader and a world-renowned regulator within the gaming industry.
The new Malta Gaming Regulatory Framework which came into force on the 1st August 2018 broadened the MGA’s regulatory capacity to supervise and to allow an intervention where required. This new framework covers all the activities licensed by the Malta Gaming Authority.