Introduction

Legal definition of ‘gambling’

What are the legal elements required for an activity to be regarded as gambling?

The gaming regulatory framework in Malta underwent a substantial overhaul in 2018. All primary legislation has been repealed and replaced with one primary act: the Gaming Act, Chapter 583 of the Laws of Malta, supplemented by other binding and non-binding instruments. Under the revised framework, an activity is regarded as ‘gaming’ if it consists of the participation in a game of chance or a game of skill, offering a gaming service or a gaming supply. This is only a recent development, as prior to the overhaul in 2018, an element of chance was mandatory for an activity to be recognised as gaming, and pure skill games were not recognised.

Chance

A game of chance is an activity the outcome of which is determined entirely or predominantly by chance, and includes activities the outcome of which is based on the occurrence or outcome of one or more future events. The degree of chance that is sufficient for an activity to be regarded as gaming is not expressly established.

Skill

A game of skill is an activity the outcome of which is determined entirely or predominantly by the use of skill, typically with the exclusion of sports events.

Gaming service

For an activity to be recognised as a gaming service under the Gaming Act, it must constitute an economic activity. The activity must be carried out for the purpose of making a profit, regardless of whether such profit is for philanthropic or other fundraising activities.

Gaming supply

The supply, directly or indirectly, of a good or service, in relation to a gaming service, is considered a gaming supply.

Note: Maltese law does not feature a definition of ‘gambling’. The latter term is solely used when referring to persons of a vulnerable nature who are known to have a gambling problem. In this article, we will refer to the term ‘gaming’ in order to maintain consistency with the Gaming Act.

Remote activity

With respect to remote or other cross-border activity, where is the wager deemed to take place?

The Gaming Act and other gaming regulatory instruments do not address the question as to where a wager is deemed to take place in the case of remote or other cross-border activity, nor has the matter been determined by case law to date.

Age restrictions

What is the minimum age for participating in lawful gambling?

The minimum age is generally 18 years. However, under the Gaming Act, the minimum age to play at land-based casinos is 25 years for Maltese citizens. While the old gaming rules set a different minimum age of 18 years for foreigners to play at land-based casinos, the law as it stands today is silent on the matter. The Gaming Premises Directive (Directive 2 of 2019), which came into force 1 February 2019, provides a minimum age of 16 years for visitors who do not intend to play during their visit, but who merely limit themselves to professional and, or academic endeavours.

Penalties

What are the penalties for offering unlawful gambling?

The applicable penalty differs depending on which provision of law has been breached. Criminal offences (listed in the Third Schedule to the Gaming Act) will, on conviction, typically become subject to a fine of between €10,000 and €500,000, or imprisonment of up to five years, or both a fine and imprisonment. For instance, if a game that requires authorisation is provided without the necessary authorisation, or if orders issued by the MGA are not adhered to, or if payment is not effected to the MGA or to players when this is lawfully due, this gives rise to a criminal offence in terms of the Gaming Act. Administrative fines not exceeding €25,000, or not exceeding €500 for each day in which the breach persists, or both, may be imposed in case of offences not listed in the said Third Schedule to the Gaming Act. When compared to the position under the old gaming regime, the existing penalties are substantially harsher.

Does the law penalise the gambler directly for participating in unlawful gambling?

Unlawful gaming constitutes a contravention affecting public order under article 338(ii) of the Criminal Code (Chapter 9 of the Laws of Malta). Applicable punishments include detention, fines, reprimands and admonitions (article 7(2) of the Criminal Code). Forfeiture of moneys involved in the unlawful gaming activity is also possible (article 344 of the Criminal Code).

Social and non-profit gambling

Are there exceptions for social gambling, or charitable or non-profit gambling?

Non-profit gaming, under the Maltese gaming system, also covers social and charitable gaming, and is defined as a game wherein more than 90 per cent of the net proceeds are forwarded to any entity with a charitable, sporting, religious, philanthropic, cultural, educational, social or civil purpose. A non-profit game wherein the value of the stake does not exceed €5 per player will be deemed to be a low-risk game, falling under the broader ‘other games’ category established in article 29 of the Gaming Authorisations Regulations (SL 583.05). A non-profit game classified as a low-risk game will be required to obtain a low-risk games permit (see question 10).

Non-profit games operators must obtain a low-risk games permit from the MGA under the Gaming Authorisations Regulations. The applicable requirements are less demanding than those pertaining to other gaming operators.

Regulatory authorities

What entity regulates land-based and remote gambling, and what are the regulator’s powers?

The entity that regulates gaming in Malta is the MGA. The major reform to Malta’s gaming legal framework involved significant widening of the MGA’s powers in respect of this sector. Its main powers, emanating from article 7 of the Gaming Act, may be summarised as follows:

  • issuing of gaming licences or other authorisation;
  • ensuring that those involved in gaming operations are fit and proper persons;
  • monitoring the conduct of operators;
  • preventing and combating criminal activity in gaming;
  • ensuring that gaming is operated and advertised fairly and responsibly;
  • investigating player complaints and assisting in the resolution of disputes between players, or between players and operators;
  • advising the Minister on gaming regulations;
  • advising the government on the formulation of policies connected with the gaming sector;
  • issuing of fines, contributions, administrative fines and other dues;
  • collecting gaming device levy, gaming tax and other money;
  • developing strategies to achieve the objectives set by the MGA or by the government of Malta;
  • collaborating with other local and foreign bodies;
  • imposing the necessary conditions in conformity with EU law and Malta’s international obligations;
  • ensuring international obligations relative to the gaming sector are adhered to;
  • establishing common standards in the gaming sector;
  • monitoring advancements in the educational sector;
  • issuing policies, reports, consultation papers and binding instruments;
  • creating entities whose functions are necessary for the attainment of its objectives; and
  • requesting any kind of information from its authorised persons, applicants or any other person.

The MGA is empowered to do such other things that it considers necessary for the attainment of its objectives and the performance of its functions.

Anti-money-laundering regulations

Are gambling licensees considered financial institutions for purposes of anti-money-laundering and similar financial services regulatory requirements or are they otherwise subject to such requirements?

Gaming licensees are considered subject persons under the Prevention of Money Laundering and Funding of Terrorism Regulations, SL 373.01 of the Laws of Malta, and are thus subject to comply with anti-money laundering obligations. Among others, a licensee must apply customer due diligence measures when carrying out a single transaction or multiple transactions that cumulatively amount to or exceed €2,000 (article 9(1) of the Prevention of Money Laundering and Funding of Terrorism Regulations).

Land-based gambling

Types

What types of land-based gambling are permitted in your jurisdiction, and is gambling regulated at a national or subnational level?

Gaming is regulated at a national level. The new legal framework is no longer sector-based (land-based gaming, remote gaming etc) as was previously the case but rather is principle-based. The simplified two-tier system comprises a business to consumer (B2C) licence and a business-to-business (B2B) licence. The two latter licence categories cover different types of gaming activities:

  • Type 1 - games of chance played against the house, the outcome of which is determined by a random generator;
  • Type 2 - 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 - 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/or
  • Type 4 - controlled skill games.

Maltese law also provides for other games, which will not require a B2C or B2B licence, but would require a different form of authorisation from the MGA:

  • low-risk games;
  • cruise casinos; and
  • amusement machines.

The new law allows operators to have a single licence, rather than require multiple licences as was the case under the previous multi-class system, and which previously limited land-based gaming offerings to the following:

  • casino games;
  • commercial bingo games;
  • gaming devices;
  • sports betting (racecourse betting and sweepstakes);
  • lotteries; and
  • non-profit games.

In view of this, the provisions regulating one kind of activity are spread throughout the regulations rather than contained in one section of the law, and there is no specific provision in the gaming regulations expressly laying down which types of land-based gaming are specifically permitted in Malta. However, the Gaming Authorisations Regulations do provide that where a B2C licence is obtained for the purpose of operating casino games, approval of such licence will be conditional on a concession being granted by the government.

Establishment licensing

Please describe the licensing criteria to operate land-based gambling of each type or classification. Does your jurisdiction limit the number of available licences?

B2C and B2B licences

Licensing criteria are determined by whether the offering is a gaming service (B2C) or a gaming supply (B2B), and this is irrespective of whether the offering is land-based or remote. The MGA may require from the applicant any information, documentation or assurances as may be necessary or relevant for the MGA to examine and determine the suitability of the applicant to hold a licence, depending on the licence category or type of game and, or services that the applicant intends to offer. Where the gaming service falls within more than one of the four game types referred to above, the MGA will have full discretion to categorise the game in the type it considers best reflects its nature.

A person is not eligible to hold a licence issued by the MGA unless established in the EEA.

The MGA shall refuse to grant a licence in any of the following cases:

  • if the application is not submitted in accordance with the established form;
  • if the applicable fees have not been paid;
  • if the MGA, in its reasonable discretion, is not satisfied that the applicant, and all relevant persons, are fit and proper;
  • if the MGA is of the reasonable opinion that the game the applicant intends to offer does not satisfy the minimum requirements of fairness for their respective game types;
  • if it transpires that any information submitted to the MGA is false, misleading, inaccurate or incomplete in a material respect; or
  • if the MGA, in its reasonable discretion, is not satisfied that the applicant: is capable of sustainably financing the gaming service or supply; has the necessary competence, technical know-how and resources to carry out the gaming offering; has a business model to carry the gaming offering in a viable way which is compliant with applicable regulatory instruments, will comply with all regulatory requirements applicable to licensees of the relevant category and with any additional requirements that the MGA considers, on the basis of a risk-based approach, necessary to impose on the applicant, which requirements may include but are not limited to financial safeguards, protection of players and, or the implementation of any policies and procedures.
B2C gaming service

Any person in possession of a B2C licence (excluding a limited duration licence) must pay to the MGA a licence fee, comprising:

  • a compliance contribution, payable for each and every licence period (see question 15); and
  • the non-refundable fixed annual fee of €25,000, or €10,000 with respect to operators providing solely a Type 4 (controlled skill game) gaming service.
B2B gaming service

Any person in possession of a B2B licence constituting the supply and management of material elements of game (under paragraph 3(a) of the First Schedule of the Gaming Authorisations Regulations) will pay to the MGA, in advance, for 12 running months following the issue of the licence and every anniversary thereof, throughout the duration of the licence, a licence fee that shall range between €25,000 - €35,000, or with respect to operators supplying Type 4 gaming supplies, a fee of €10,000.

Any person in possession of a B2B licence constituting the supply and management of software or of the control system itself on which such software resides (under paragraph 3(b) of the First Schedule of the Gaming Authorisations Regulations) will pay to the MGA, a fee within the range of €3,000 - €5,000.

Low-risk games

A low-risk games operator will acquire a low-risk games permit, in the case of:

  • non-profit games wherein the value of the stake does not exceed €5 per player;
  • commercial communication games (games the purpose of which is to promote the sale of goods or services, and the payments required to be made only serve to acquire the promoted goods or services, and not to participate in the game), wherein a single event will not award a prize exceeding €50,000, and also wherein a series of commercial communication games will not cumulatively exceed €100,000 in prizes during any calendar month, and not more than €500,000 during any calendar year; and
  • limited commercial communication games (games the purpose of which is to promote the sale of goods or services and which includes a stake) with a stake that does not exceed €2 per player, and the value of the prize does not exceed €250.

A low-risk games permit is non-renewable and non-transferable, and is valid for a singular event for which it is granted.

Cruise casinos

An operator of a cruise casino will acquire a cruise casino permit from the MGA. This permit, which is non-transferable, 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 regard to registered passengers of the cruise ship.

Amusement machines

An operator may only make an amusement machine available for use if registered with the MGA by means of the applicable procedure, despite such gaming service holding the status of an exempt game.

Exempt games

When a game qualifies as an exempt game under the Gaming Authorisations Regulations, it will not require a licence or other authorisation; however, the MGA may establish appropriate regulatory conditions where and to the extent it deems fit and appropriate.

There are no provisions under the Maltese gaming regulatory regime that limit the number of available licences.

MGA power to refuse authorisations

In addition to the causes for refusal to grant a licence as specified earlier, the MGA may refuse to grant such authorisations if:

  • the MGA believes that the gaming offering is not compliant with the regulatory instruments;
  • the MGA believes such authorisation may pose a risk to the reputation of Malta or to the public interest; or
  • insufficient information requested by the MGA has been provided.
Director, officer and owner licensing

Must individual directors, officers or owners of licensees also be licensed or reviewed for suitability?

Yes, such persons must be reviewed for their suitability. The process entails a fit and proper assessment thereof by the MGA carried out on the basis of due diligence documentation and probity assessments with other national and international regulatory bodies and enforcement agencies.

For the purpose of this assessment, relevant persons will include, but will not be limited to, all persons holding a key function in the authorised person, and those holding a direct or indirect qualified interest in the applicant. A qualifying interest will be deemed established at least at 10 per cent, or any lower percentage as may be determined by the MGA. The Gaming Authorisations Regulations permits the MGA to utilise its reasonable discretion to establish which persons involved in the applicant have to be assessed.

Location

May a gambling location be part of a resort, restaurant or other multi-purpose location? What limitations apply?

There are no direct restrictions in terms of location itself. However, controlled gaming premises (defined under Maltese law as premises intended to make available for use, to host or operate one or more gaming device but does not include premises in which gaming is carried out by virtue of a concession by the government or premises in which the only gaming activity being carried out is tombola) must be at least 75 metres away from certain locations, such as educational establishments and playgrounds. Furthermore, a minimum walking distance of at least 50 metres from another controlled gaming premise typically applies.

Passive/institutional ownership

Are there provisions for passive or institutional ownership that allow for exemption or modification of licensing requirements?

No such provisions or exemptions apply under Maltese law.

Responsible gambling

What responsible gambling obligations apply to licensees?

In terms of responsible gaming, the minimum participation age is explained in question 3.

Under the Gaming Player Protection Regulations, operators are obliged to produce sufficient evidence to the MGA indicating that the following objectives have been satisfied:

  • ensuring that proper controls, policies and procedures are in place to prevent gaming by minors and to protect vulnerable persons;
  • ensuring that the interests of all players are adequately safeguarded and that players are provided with information on any and all avenues of recourse they may have if they feel aggrieved by a decision of the authorised person;
  • ensuring that all information relevant to the gaming service, and all information related to responsible gaming, is readily available to players;
  • ensuring that tools are readily available for players or any other persons, authorising them to control their use of gaming services, and to safeguard themselves from the effects of problem gaming; and
  • ensuring that the marketing and advertising of the gaming service is fair and in accordance with the Gaming Commercial Communications Regulations, and any other applicable law.

In terms of the Gaming Commercial Communications Regulations, it is necessary for educational responsible gaming messages to be prominently displayed on all advertisements and promotions related to the game. Additionally, the web-portal address of an entity devoted to responsible gaming must be displayed on all advertisements and promotions. An alternative means of displaying such information will only be acceptable in the event of a spatial restriction, provided such alternative means nonetheless captures the viewer’s attention effectively. Where the alternative means consists of click-throughs, the landing page should not be more than two clicks away.

The abovementioned requirement is not limited to advertising and marketing of games. The Player Protection Directive (Directive 2 of 2018) provides that when gaming services are offered online, licensees must ensure that a link leading to a page including all the relevant responsible gaming information required is permanently visible on the website wherein the services are being offered, and that page must not be more than one click away from any web page or application.

With respect to gaming premises, and controlled gaming premises, licensees are required to make available leaflets or other information regarding at least one organisation that aid persons who have problem gambling issues. Such information must include a responsible gaming message, and must be placed in visible locations in the premises, and next to automatic teller machines, if any.

B2C licensees must ensure that a procedure for self-exclusion is made readily available to players who wish to exclude themselves from playing for a definite or indefinite period, and therefore denying them access to the respective gaming services during the course of such exclusion period. The MGA has announced its intention to introduce a unified self-exclusion system for both remote and land-based gaming operations, in furtherance of its objective to implement additional controls to promote responsible gaming.

Taxes

What type of tax and what tax rate applies to each form of lawful land-based gambling activity?

Provisions on gaming tax have been consolidated into a single legis­lative instrument, entitled the Gaming Tax Regulations. All B2C operators (irrespective of the gaming vertical) will be subject to a gaming tax of 5 per cent of the gaming revenue derived from end customers located in Malta and a compliance contribution that increases depending on the annual revenue made.

With respect to B2C licencees, compliance contributions vary depending on the type of licence and annual gaming revenue:

Type of game service

Compliance contribution for the licence period

Rate (%)

Type 1

For every euro of the first €3 million - €10 million

1.25 - 0.55

For every euro over and above

0.40

Type 2

For every euro of the first €3 million - €10 million

4.00 - 0.60

For every euro over and above

0.40

Type 3

For every euro of the first €2 million - €10 million

4.00 - 0.60

For every euro over and above

0.40

Type 4

For every euro of the first €2 million - €10 million

0.50 - 1.75

For every euro over and above

2.00

B2B licencees are exempt from gaming taxes, but are subject to a duty to pay an annual licence fee to the MGA, which fee depends on the annual revenue generated during the applicable financial year, as provided hereunder:

Revenue

Annual licence fee

Where annual revenue does not exceed €5 million

€25,000

Where annual revenue exceeds €5 million but does not exceed €10 million

€30,000

Where annual revenue exceeds €10 million

€35,000

For providers supplying solely Type 4 gaming supplies

€10,000

Remote gambling

Types

Is remote gambling permitted and, if so, what types?

All types of gaming by means of distance communications, including online and mobile, are permitted.

As explained with respect to land-based gaming, the revised licensing system distinguishes exclusively between whether the gaming offering is a gaming service (B2C) or a gaming supply (B2B), irrespective of whether the offering is land-based or remote. The same game types (see question 9) apply to games of a remote nature.

Prior to the reform in 2018, Malta operated a multi-class licence system, and the type of permitted remote gaming depended on which licence is held. B2C were licensed as:

  • Class 1: Remote Gaming Licence - covered games in which operators manage their own risk on repetitive games (eg, casino and lotteries);
  • Class 2: Remote Betting Office Licence - covered games in which operators manage their own risk on events that are external to the game itself (eg, sports betting); and
  • Class 3: Licence to Promote or Abet Remote Gaming - covered games in which the operator promotes or abets gaming in or from Malta (eg, peer-to-peer and poker).

It was also possible to obtain a B2B licence for hosting and managing other operators (with the exclusion of the licensee him or herself), and such B2B services required a Class 4 licence.

Eliminating the abovementioned categories has streamlined the Maltese gaming licence system, reducing the possibility of duplication of requirements, and widening the ambit of types of remote-based gaming that could fall within the Maltese gaming regulations.

Licensing

What are the criteria for obtaining a licence to operate remote gambling?

The same criteria that apply to land-based gaming apply to remote gaming since the criteria for obtaining a licence is based on the classification of whether the operation requires a B2C or B2B licence, irrespective of the medium or technology applied (see question 10).

How do the licensing criteria for remote gambling operators differ from those applicable to land-based operators?

The licensing criteria in Malta apply horizontally and generally do not distinguish between land-based or remote gaming services. By comparison, under the old regime, the main difference was that the licensing criteria for remote gaming were set out by law, MGA policy and directives, whereas land-based casinos and the National Lottery required a ministerial concession, and therefore relevant criteria primarily depend on the tendering process for the award of that concession. While the distinction between land-based and remote gaming is minimal under the existing gaming laws, the concession system in regard to land-based casinos has been retained.

Cross-border gambling

May operators located in other countries offer internet gambling to consumers in your jurisdiction without obtaining a licence there?

Yes, if such operators hold a licence issued by another EU or EEA member state, or by any other state that is deemed by the MGA to offer safeguards largely equivalent to those offered by Maltese law. The operator would be required to apply to the MGA for a recognition notice, for the purpose of providing a gaming service, gaming supply, key function or any other authorisation in or from Malta. A recognition notice is deemed to have the same effect as an authorisation issued by the MGA. The MGA may revoke any such recognition notice, and may subject an applicant of a recognition notice to administrative fees were reasonable.

May operators licensed in your jurisdiction offer internet gambling to consumers in other countries?

Whether a Maltese licensee can offer its services to consumers in other countries primarily depends on the legislation and policy in that country. From a Maltese perspective, the Gaming Act and other regulatory instruments do not prevent licensees from offering their services to consumers in other countries.

Taxes

What tax rate applies to each form of remote gambling?

The same tax rates applicable to land-based gaming apply (see question 15).

Intellectual property

Patents

Are gambling games - land-based or remote - patentable in your jurisdiction?

Patentability of gaming games in Malta depends on the same factors applicable to inventions in general under the Patents and Designs Act (Chapter 417 of the Laws of Malta), namely:

  • novelty;
  • non-obviousness; and
  • industrial applicability.

However, under Maltese law, software as such, is not patentable.

Trademarks

Are there limitations on how brands, logos or other types of marks may be used in promoting gambling games?

There are no direct limitations. However, their use is subject to the general advertising restrictions (see question 24).

Advertising

Restrictions

What types of restrictions apply to advertising gambling games?

The Commercial Communications Regulations set out limitations to the advertisement of gaming activities. Amongst other restrictions applicable thereto, advertisements by MGA licensees must not:

  • feature minors;
  • condone or encourage behaviour that is criminally or socially irresponsible;
  • portray gaming as a means of resolving problems;
  • suggest that gaming is an alternative to employment;
  • suggest that it can enhance personal or professional qualities;
  • portray gaming in a context of toughness;
  • portray gaming as indispensable;
  • suggest that solitary gaming is preferable to social gaming;
  • suggest peer pressure to game;
  • suggest that skill can influence the outcome of a game that is purely a game of chance;
  • provide false information about chances of winning or expected return from gaming;
  • exploit cultural beliefs about gaming or luck;
  • make reference to instantly available consumer credit services;
  • tarnish the goodwill or reputation of an authorised person; and
  • target players who are undergoing a period of self-exclusion.

Suppliers

Licensing

What types of suppliers to gambling operators require licences?

Gaming suppliers are regulated in a horizontal fashion, and a distinction is made between gaming suppliers that provide:

  • a critical gaming supply (requiring a licence);
  • a material gaming supply (requiring an approval as opposed to a licence); and
  • an ancillary gaming supply (not requiring any approval or licence).

Any person who provides a critical gaming supply from or to Malta must be so authorised by the MGA. A critical gaming supply shall constitute one of the four types of games set out in the First Schedule of the Gaming Authorisations Regulations (see question 9). The following supplies each constitute a critical gaming supply:

  • supply and management of material elements of a game; and
  • 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.
Registration

If licensing is not required, is there a registration or other process suppliers are subject to, and what triggers that process?

When a supply constitutes a material gaming supply, the B2B gaming licence will not be necessary. Any person offering a material gaming supply to an authorised person may request a material gaming supply certificate from the MGA. Any authorised person making use of or seeking to make use of a material gaming supply provided by a third party is to ensure either that such a material supplier is in possession of a material gaming supply certificate or that the material gaming supply is otherwise approved on a case-by-case basis by the MGA subject to a risk-based approach. Where any authorised person accepts to receive material gaming supplies from a third party not in possession of a material gaming supply certificate, such authorised person receiving material gaming supplies shall assume full regulatory responsibility for such supplies.

With respect to an ancillary game supply, meaning any other supply that is not classified as a material game supply, a licence or any other form of authorisation from the MGA will not be required.

Casino projects

Casino development

What considerations arise in developing a casino resort project that are not typical to other resort development?

See question 10. Development considerations primarily depend on the tendering process for the award of that casino resort’s concession.

Labour and employment

Wage and hour rules

Are there particular rules governing hours and wage treatment for casino employees?

There are no specific rules applicable to employees working in casinos.

All employees in Malta are entitled to compensation for overtime, which includes hours worked over and above 40 hours per week, for both full-time and part-time employees. Overtime is compensated at 1.5 times the rate payable for normal working hours. Time spent preparing, such as changing into or out of clothing, is not included as working time; however, pre- and post-shift meetings would be included as part of an employee’s working hours if they are obligatory (the same rule applies to training). Security screening depends on the nature and time spent on security screening - the longer and more exhaustive it is then the more probable it is that it will be considered as a part of working time.

Collective labour

Must casino employees be members of labour unions or similar organisations?

There is no such specific requirement.

Acquisitions and changes of control

Change of control

How are licensee changes of control, and substantial changes in shareholdings of licensees, addressed?

Any change in qualifying shareholding must be notified to the MGA no later than three working days after the change has been effected. This constitutes a significant development, in that transactions involving a change in control are no longer subject to the MGA approving the transaction prior to closing.

Furthermore, a change in the essential components of the licensee requires prior written approval from the MGA.

With regard to public companies, Maltese law does not establish a process specific to listing on an exchange by a gaming licensee. However, with regard to shareholders of listed gaming companies, the MGA typically rests on the checks carried out by the regulated market. In such instances, the MGA’s fit and proper assessment is typically focused on the board of directors.

Bankruptcy

How are gambling licences treated in bankruptcy?

Licensees that are declared insolvent risk losing their gaming licence, especially if gaming tax is not duly paid.

A creditor who wishes to recover his or her debt through the enforcement of collateral by taking possession of a qualifying shareholding, or gaming assets that are subject to the MGA’s regulatory remit, such as the MGA licence, requires prior approval from the MGA before proceeding with enforcement. The creditor’s enforcement against other assets owned by a licensee does not require the MGA’s prior approval.

An insolvency court order does not remove the need of obtaining the MGA’s prior approval, where such approval is required before proceeding with enforcement.

In terms of options available to a creditor seeking to enforce a debt secured against a licensee’s assets, it should be noted that enforcement of rights typically requires court proceedings.

However, under the Financial Collateral Arrangements Regulations (SL 459.01 of the Laws of Malta) (the FCA Regulations), it is possible to structure certain secured loan transactions in a manner in which they are validly enforceable in accordance with their terms, and this notwithstanding winding-up proceedings or reorganisation measures in respect of the collateral provider. It is worth noting, however, that the provisions of the FCA Regulations apply solely to financial collateral that consists of:

  • cash;
  • instruments; or
  • credit claims that can be evidenced in writing.

In this respect, the general observation made earlier in relation to obtaining the MGA’s approval to enforce collateral in the form of a qualifying shareholding in a licensed entity would still be applicable within the context of the FCA Regulations. The applicability of the FCA Regulations also depends on the nature of the collateral taker and the collateral receiver.

It should also be noted that a creditor cannot enforce his or her debt against funds held by the licensee on behalf of its customers.

Quasi-gambling

Regulation

How are forms of ‘quasi-gambling’ regulated? Are any treated as ‘gambling’, and what triggers such treatment?

Any gaming that falls within the requirements outlined in question 1 would be treated as gaming and thus requires a licence. Games qualifying under the category of ‘low-risk games’, requiring a low-risk games permit, may be considered forms of quasi-gaming. The same applies with respect to cruise casinos, requiring a cruise casino permit from the MGA, and amusement machines that must be registered with the MGA prior to use (see question 10). With regard to skill gaming, the MGA is empowered to issue a ruling whereby a skill game is deemed a controlled skill game and thus requiring a licence (see question 1).

Licensing

Does your jurisdiction license quasi-gambling operators?

See question 32.

Other restrictions

Does your jurisdiction impose other restrictions on the conduct of quasi-gambling activity, including restrictions on advertising, age of participation, limitations on prizes, etc?

Applicable restrictions depend on the quasi-gaming activity in question. With respect to low-risk games, the Gaming Authorisations Regulations set out prize limitations that may be won (see question 10). However, all activities falling within the definition of ‘gaming’ under Maltese law, including quasi-gambling activities, are subject to the advertising requirements and participation restrictions as laid down in the Gaming Act and its supplementary instruments.

Litigation

Recent cases

What, if any, significant litigation involving the gambling or quasi-gambling sectors has your jurisdiction seen in recent years?

In the case of Adv Stephen Muscat as mandatory of Hugo Jose v EveryMatrix Limited, decided on 24 October 2018, the defendant company, an MGA licensee offering online casino services, refused to pay the applicant player the sum of €25,820, upon identifying signs of player collusion. The First Hall, Civil Court declared that unlawful activity by way of collusion was evident, and therefore the defendant company had every right to refuse payment.

On 30 March 2017, in the case of Police v Christaan Alexander Van Dalen, the court of magistrates (criminal judicature) sentenced a licensee’s employee to jail for six years and a fine of €15,000 for defrauding his employer out of €153,000 through commissions arising from artificially generated traffic on the employer’s gambling websites.

Otherwise, there was little litigation of significance to gaming that has been initiated before the local courts (as opposed to arbitration or out of court settlements not in the public domain).

Update and trends

Recent developments

Highlight any noteworthy developments or trends in the gambling or quasi-gambling sectors (legal or business) and their potential implications.

Developments36 Highlight any noteworthy developments or trends in the gambling or quasi-gambling sectors (legal or business) and their potential implications.

Major reforms to the Maltese gaming legal system have enhanced Malta’s position from a regulatory perspective. The supervisory and decision-making role of the MGA has been heightened, aligning the regulation of gaming with anti-money laundering requirements. Moreover, the new framework requires the MGA to have player protection as one of its key objectives. The regulations strengthen consumer protection, providing greater obligations on the part of the gaming licensee to implement responsible gaming measures.

It is also worth noting that the MGA is working on developing a unified self-exclusion system for the gaming industry in Malta. A preliminary market consultation was published by the MGA earlier this year, in order to receive feedback and gain knowledge on this matter. The MGA is currently creating a system that empowers players who wish to self-exclude themselves from any gaming services licensees. This will allow players to self-exclude by means of a self-exclusion website, through the websites of operators in the case of operators providing gaming services through the internet, or facilitated through the operator itself or the MGA’s staff.

On 1 January 2019, the MGA implemented the first of two phases of its Sandbox Framework for the acceptance of Virtual Financial Assets (VFA) and the use of distributed ledger technology (DLT) within the gaming industry. During this phase, which is due to last for a period of 10 months (unless otherwise extended), the MGA will be accepting applications for the use of DLT assets, directly or through third-party service providers, by its respective licensees. In order to participate in the Sandbox Framework, applicants must hold the necessary licence issued by the MGA, aside from any other regulatory requirements emerging from the VFA Act and any other applicable legislation.

The author would like to thank Louisa Firman, trainee at Camilleri Preziosi, for her contribution to this chapter.