Jurisdiction snapshot

Trends and developments

How would you describe the state of the gaming industry in your jurisdiction, including any notable trends and recent commercial/legal developments?

Malta’s gaming industry continues to go from strength to strength. It is one of the most significant contributors to the Maltese economy (representing approximately 12% of gross domestic product). In general, Malta is considered a jurisdiction of excellence for the gaming industry, particularly for remote gaming.

In terms of notable legal developments, on 1 August 2018 Malta’s gaming legislative and regulatory framework was completely overhauled. The previous framework, which was fragmented over a number of laws, was replaced with the Gaming Act (Chapter 583 of the Laws of Malta) – a single primary act which consolidated all of Malta’s gaming laws.

The Gaming Act aims to future-proof Malta’s already successful gaming industry. It introduced a number of notable changes, including:

  • the adoption of a horizontal regulatory approach, which replaced the previous multi-licensing system with a licensing framework that provides for two types of licence irrespective of the gaming vertical:
    • critical gaming supply licences (business-to-business); and
    • gaming services licences (business-to-consumer);
  • the introduction of voluntary certification of material gaming supplies for non-critical gaming supplies, permitting suppliers of such services to obtain certification for gaming purposes;
  • the introduction of compliance contributions instead of licence fees;
  • allowing licensees to:
    • award prizes in cryptocurrencies;
    • accept cryptocurrencies for the placement of bets; and
    • use blockchain and distributed ledger technology in their operations;
  • the division of the previous key official role into various key functions, all of which require authorisation from the Malta Gaming Authority (MGA);
  • the expansion of the MGA’s supervisory and enforcement functions, enabling it to better achieve its regulatory objectives; and
  • the introduction of an administrative review procedure, which allows for redress from MGA decisions.

Government approach

How would you describe the government’s general approach to regulating gaming in your jurisdiction?

Over the past 15 years, Maltese governments, irrespective of the party in power, have deemed the regulation of gaming and the gaming industry’s success to be a priority. A prudent yet pragmatic approach has been adopted, with a focus on:

  • innovation;
  • flexibility for licensees; and
  • consumer protection.

Regulatory framework

Legislation

What primary and secondary legislation governs gaming in your jurisdiction and to which activities do these laws apply? Does the legislation draw a distinction between games of skill and games of chance?

Malta’s primary gaming legislation is the Gaming Act (Chapter 583 of the Laws of Malta) – a single primary act which consolidated all of Malta’s gaming laws. This is supplemented by subsidiary legislation issued thereunder and by directives issued by the Malta Gaming Authority (MGA).

The Gaming Act’s entry into force with respect to land-based gaming is set for 1 January 2019, until which time land-based gaming will remain regulated under the previous framework.

Notably, both the provision of gaming services to consumers (business-to-consumer) and the provision of gaming supplies to gaming operators (business-to-business) are regulated by Malta’s gaming laws.

Maltese gaming legislation distinguishes between games of chance and games of skill. A ‘game of skill’ is an activity whose outcome is determined by the use of skill alone, or predominantly by the use of skill, excluding sporting events. Conversely, a ‘game of chance’ is an activity whose outcome is determined by chance alone, or predominantly by chance, including where the outcome is determined depending on the occurrence or outcome of one or more future events.

Games of chance offered in or from Malta require MGA authorisation in the form of a licence or recognition notice. Conversely, skill games require no such authorisation. However, the MGA can issue a ruling whereby a skill game is deemed to be a ‘controlled skill game’, following which it would require MGA approval.

How does the relevant anti-money laundering legislation in your jurisdiction apply in practice to gaming activities?

Gambling licensees are persons subject to the Prevention of Money Laundering and Funding of Terrorism Regulations (SL 373.01 of the Laws of Malta) and must therefore comply with the applicable anti-money laundering obligations. Among other things, 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.

Regulators

What bodies regulate gaming activities, and what is the extent of their powers?

The MGA regulates gaming in Malta. Its main powers are:

  • regulating, supervising and reviewing all practices, operations and activities relating to the gaming sector;
  • promoting the general interests of players and consulting with, informing and guiding the public;
  • ensuring that the advertisement of gaming services is fair and responsible;
  • receiving and investigating complaints by players and assisting and promoting timely, fair and competent dispute resolution;
  • monitoring the Maltese gaming sector and undertaking studies, research and investigations;
  • advising the government on the formulation of policies connected with the gaming sector and providing it with recommendations and advice on actions, developments and regulations which would be expedient in relation to its regulatory and supervisory functions;
  • examining the suitability of any person engaged or employed in any gaming activity and ensuring that such persons are fit and proper to carry out their functions;
  • granting licences, approvals, recognitions or other authorisations for the carrying out of any operation or activity relating to gaming, imposing requirements and conditions on such authorisations and collecting all information, documentation, fees, taxes and levies linked with such authorisations;
  • ensuring high standards of conduct and management throughout the gaming sector;
  • preventing, detecting and ensuring the prosecution of any offence against gaming laws;
  • collaborating with other local and foreign bodies, government departments, international organisations and other entities which exercise regulatory, supervisory or licensing powers or which are otherwise engaged in overseeing or monitoring areas or activities in the gaming sector and arranging for the mutual exchange of information and other forms of assistance or collaboration in regulatory or supervisory matters, as well as ensuring that all international obligations entered into by Malta in the gaming sphere are complied with; and
  • fostering advancements in the educational sector for matters relating to the gaming sector.

General prohibitions and restrictions

What primary prohibitions and restrictions apply to gaming activities and participants?

In terms of primary prohibitions applicable to gaming activities, it is an offence to provide or abet any activity that requires MGA authorisation without first obtaining such authorisation.

Other restrictions include:

  • being unable to provide credit against gaming activities;
  • offering games to minors or other vulnerable persons; and
  • including unfair terms for participants.

Further, gaming participants must generally be 18 years old. With respect to land-based casinos, the minimum age for participation in gaming activities is 25 years old for Maltese citizens and 18 years old for non-Maltese citizens.

Land-based gambling

Authorised establishments

What gambling establishments are authorised to operate in your jurisdiction and how are they classified?

Malta’s previous gambling framework – which, in respect of land-based gaming, is set as from 1 January 2019 to be overhauled by the new framework referred to earlier – specifically permitted gaming establishments in which the following games were operated:

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

The new Gaming Act differentiates primarily between whether an offering constitutes ‘gaming services’ (business-to-consumer) or ‘gaming supplies’ (business-to-business) and generally does not treat the various forms of traditional gaming establishment differently. However, a limited number of specific requirements are set out in the Gaming Authorisation Regulations (SL 583.05 of the Laws of Malta) with respect to cruise casinos and amusement machines.

Licensing

What licensing procedures and requirements apply to gambling establishments (including any fees)?

Under the outgoing legislation, various procedures and requirements applied to obtaining a licence for a gambling establishment, which varied depending on the type of establishment.

The MGA is expected to issue specific procedures and requirements regarding land-based gambling on the Gaming Act’s coming into force.

How can licences be renewed, and what terms and fees apply?

The outgoing legislation provided for various renewal periods, procedures, terms and fees depending on the type of licence held. In general, a renewal would require the submission of documentation to the MGA and a successful audit.

Specificities on renewals with respect to gaming establishments have yet to take effect. However, in general, all licences under the Gaming Act are valid for 10 years and may be renewed for further 10-year periods subject to compliance during the previous term. As regards procedure, information must generally be submitted to the MGA and the licensee must successfully satisfy an audit.

Under the Gaming Licence Fees Regulations, renewals are subject to a €5,000 fee.

On what grounds can licences be revoked? Can revocation be challenged in any way?

Under the Gaming Compliance and Enforcement Regulations (SL 583.06 of the Laws of Malta), a licence can be revoked on the basis of the grounds for suspension envisaged therein (eg, where the authorised person has failed to comply with an MGA order to discharge financial commitments for its operations) where the MGA decides that revocation is the most appropriate measure or is satisfied that the matter which has led to suspension cannot be rectified.

A person that feels aggrieved by an MGA decision revoking a licence can, within 20 days of the decision’s issuance, file a written notice to the MGA stating why the licence should not be revoked.

Employees and suppliers

What rules and restrictions govern the hiring and ongoing relationship with employees and suppliers of gambling establishments?

The Gaming Authorisation Regulations and the Gaming Authorisations and Compliance Directive (3/2018) under the Gaming Act distinguish between critical and material gaming supplies.

‘Material gaming supplies’ constitute gaming supplies of such importance that any weakness or failure in their provision could have a significant impact on the operator’s ability to:

  • meet its obligations under all applicable regulatory instruments;
  • manage the risks relating to such supply; or
  • continue in business.

Conversely, a ‘critical gaming supply’ is a material gaming supply which is indispensable in determining the outcome of games that form part of the gaming service and an indispensable component in the processing or management of essential regulatory data.

Critical gaming supplies must be authorised under the abovementioned regulations by virtue of a critical gaming supply licence, which is essentially classified as a business-to-business licence.

Although there is no obligation for material gaming supplies (including providing risk and fraud management services for the operation of a licensable activity, holding or managing player funds and providing services relating to customer due diligence and player identity verification) to be authorised by the MGA, parties undertaking these activities may nonetheless request a material gaming supply certificate from the MGA. A licensee that makes (or seeks to make) use of a material gaming supply provided by a third party must ensure that the supplier holds a material gaming supply certificate or that the supply is otherwise approved on a case-by-case basis by the MGA, subject to a risk-based approach. Where a licensee receives material gaming supplies from a third party which does not hold the relevant certificate, the licensee receiving the material gaming supplies will assume full regulatory responsibility therefor.

From a gaming perspective, no specific rules and restrictions concern employees of gaming establishments. Zoning restrictions

Are there any zoning or other planning restrictions for gambling establishments?

In terms of both the outgoing legislation and the Gaming Premises Regulations (SL 583.07 of the Laws of Malta) under the Gaming Act, controlled gaming premises (ie, any premises intended to make  available  for  use,  host  or  operate  one  or  more  gaming devices (not including premises in which gaming is carried out in virtue of a government concession or in which the only gaming carried out consists of tombola games) must be at least 75m away from certain locations, such as educational establishments and playgrounds. Further, a minimum walking distance of at least 50m from another gaming parlour typically applies.

Operations

What rules, restrictions and ongoing obligations govern the operations of gambling establishments (eg, reporting and monitoring requirements, customer due diligence)? What are the penalties for non-compliance?

No person may operate a gaming establishment unless they have a valid authorisation to do so. In order to be eligible for MGA authorisation, persons must comply with all of the provisions in the Gaming Premises Regulations, along with any other ad hoc requirements that the MGA may prescribe.

In addition, there must be no more than one gaming establishment within a single venue or building. Further rules apply in respect of controlled gaming premises (as set out in ‘Zoning restrictions’ above).

Applications for the approval of proposed locations to be used as controlled gaming premises must be accompanied by:

  • a reference to the relevant licence (or application number) held by the applicant;
  • the relevant planning authority permit; and
  • a 1:100-scale plan of the premises, which must comply with the relevant provisions set out in the Gaming Premises Regulations.

The MGA will approve only controlled gaming premises that satisfy the relevant requirements, including that the premises:

  • are operated, managed or otherwise controlled by persons which are deemed to be fit and proper by the MGA;
  • have adequate restricted access controls and are not directly accessible from any other premises which are not included in the site plans or visible to passing pedestrian traffic;
  • contain no more than one gaming device per two square metres (and no more than 10 gaming devices in aggregate) in the area in which the playing of games through gaming devices is designed to take place;
  • are operated in such a manner as to ensure that all players are registered;
  • are operated in such a manner as to ensure that at all times the gaming devices are made available for use, hosting or operation in a secure, safe and proper manner; and
  • are structured and operated in a manner which ensures that during the opening hours of the premises (no earlier than 11:00am and no later than 11:00pm), the area in which the playing of games is designed to take place is constantly supervised by employees.

Non-compliance with these provisions may result in an administrative fine of up to €25,000, up to €500 for each day that the breach persists or both.

Ongoing obligations Gaming establishments must register all players on their entry into the establishment and before they make use of its gaming service.

The Gaming Premises Regulations provide for the self-exclusion of players, which operators of gaming premises must make readily available to players. The self-exclusion procedure entails the submission of a form, which is vetted by the operator to ensure that any required information and documentation has been provided by the player. Further, operators must notify the MGA of such self-exclusion and ensure that they have access at all times to the MGA’s unified self-exclusion database. Any interested person may also submit a self-exclusion for a pathological gambler.

Failure by an operator to adhere to the self-exclusion provisions constitutes a criminal offence and may result in a fine ranging from €10,000 to €500,000, up to five years’ imprisonment or both.

Taxes

What tax liabilities arise for gambling establishments?

Under the outgoing legislation, each type of gaming establishment is subject to its own specific tax treatment.

 

The MGA has completely overhauled gaming tax. Under the Gaming Tax Regulations (SL 583.10 of the Laws of Malta), all business-to-consumer operators (irrespective of the gaming vertical) will be subject to a gaming tax of 5% of the gaming revenue derived from end customers. In addition, licensees carrying out online gaming activities are subject to a compliance contribution under the Gaming Licence Fees Regulations (SL 583.03 of the Laws of Malta). Contributions vary depending on the type of game and annual gaming revenue, as set out below.

Type 1 gaming services (minimum = €15,000; maximum = €375,000)

 

1.25%

For every euro (FEE) of the first €3 million

1%

FEE of the next €4.5 million

0.85%

FEE of the next €5 million

0.70%

FEE of the next €7.5 million

0.55%

FEE of the next €10 million

0.40%

FEE of the remainder

Type 2 gaming services (minimum = €25,000; maximum = €600,000)

4%

FEE of the first €3 million

3%

FEE of the next €4.5 million

2%

FEE of the next €5 million

1%

FEE of the next €7.5 million

0.80%

FEE of the next €10 million

0.60%

FEE of the next €10 million

0.40%

FEE of the remainder

Type 3 gaming services (minimum = €25,000; maximum = €500,000)

4%

FEE of the first €2 million

3%

FEE of the next €3 million

2%

FEE of the next €5 million

1%

FEE of the next €5 million

0.80%

FEE of the next €5 million

0.60%

FEE of the next €10 million

0.40%

FEE of the remainder

Type 4 gaming services (minimum = €5,000; maximum = €500,000)

0.5%

FEE of the first €2 million

0.75%

FEE of the next €3 million

1%

FEE of the next €5 million

1.25%

FEE of the next €5 million

1.50%

FEE of the next €5 million

1.75%

FEE of the next €10 million

2%

FEE of the remainder

Critical gaming supplies (annual licence fee, not compliance contribution)

€25,000

Annual revenue for Types 1 to 3 = less than €5 million

€30,000

Annual revenue for Types 1 to 3  = €5 million to €10 million

€35,000

Annual revenue for Types 1 to 3  = more than €10 million

€10,000

Providers supplying solely Type 4 gaming supplies

 

Further, licensees providing Type 1 to 3 gaming services must pay a non-refundable fixed annual licence fee of €25,000, whereas operators providing solely Type 4 gaming services must pay a non-refundable fixed annual licence fee of €10,000.

Compliance

What best practices are advised in order to ensure compliance with the relevant regulations?

To date, there are no officially recognised gaming best practices in Malta. However, the MGA occasionally issues guidance notes, and licensees are generally encouraged to consult the MGA if they are uncertain of whether particular practices comply with the relevant regulations.

Online and remote gaming

Regulation

To what extent is online and remote gaming regulated in your jurisdiction? Are there any notable rules and restrictions in this regard?

Any form of remote gaming offered in or from Malta is regulated under Maltese law.

The main restriction is the requirement to hold an authorisation from the Maltese Gaming Authority (MGA). Such authorisation may take the form of either a licence issued by the MGA or a recognition notice, whereby the MGA:

  • recognises a licence granted to an operator by a regulatory authority within the European Union or European Economic Area (or any other jurisdiction which is deemed by the MGA to offer safeguards largely equivalent to those offered by Maltese law); and
  • authorises the operator to offer licensable games in or from Malta under the terms of that foreign licence.

Licensing

Are there any licensing requirements for online and remote gaming activities?

Various licensing requirements apply to remote gaming activities, including as follows:

  • For a critical gaming supply licence, a body corporate must be established in Malta (or an EU or EEA country) and have the required share capital of at least €40,000.
  • For a gaming service licence, a body corporate must be established in Malta (or an EU or EEA country) and have the required share capital as determined according to the type of game under the Gaming Authorisation Regulations, as outlined below:
    • €100,000 for Type 1 gaming services (ie, games of chance played against the house, the outcome of which is determined by a random generator, including casino-type games such as blackjack and roulette);
    • €100,000 for Type 2 gaming services (ie, 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 its own risk by managing the odds offered to the player);
    • €40,000 for Type 3 gaming services (ie, 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, including pay-to-play games such as poker and bingo); or
    • €40,000 for Type 4 gaming services (ie, controlled skill games).

Companies with multiple type approvals must meet the above requirements cumulatively up to a minimum cap of €240,000.

  • Persons carrying out key functions within the licensee must have MGA designation and approval. ‘Key functions’ are all essential undertakings, roles and tasks carried out by a person in connection with the gaming service or supply and may include:
    • the role of chief executive officer;
    • the management of the licensee’s day-to-day gaming operations;
    • compliance with the licensee’s obligations arising out of the licence;
    • the management of the administrative and financial strategies of the licensee, including the payment of tax and fees to the MGA;
    • marketing and advertising;
    • the management of the licensee’s legal affairs;
    • the provision of player support;
    • responsible gaming;
    • fraud prevention;
    • the prevention of money laundering and terrorist financing;
    • the implementation of risk management strategies;
    • adherence to applicable legislation relating to data protection and privacy;
    • technological affairs of the licensee;
    • network and information security of the licensee; and
    • internal auditing.
  • Persons carrying out key functions, directors, shareholders and all relevant persons must be deemed by the MGA to be fit and proper.
  • All information, documentation and assurances requested and required by the MGA at application stage must be provided.
  • Servers must be located in Malta or in other EU or EEA countries (in which case, they should be mirrored to servers located to Malta in real time).
  • A one-time, non-refundable licence application fee of €5,000, along with any further fees prescribed by the Gaming Licence Fees Regulations (eg, €50 for each approval of a key function) must be paid.

Taxes

Do any taxes apply to online gaming activities?

Licensees carrying out online gaming activities are subject to a compliance contribution under the Gaming Licence Fees Regulations (SL 583.03 of the Laws of Malta). Contributions vary depending on the type of game and the annual gaming revenue, as set out below:

Type 1 gaming services (minimum = €15,000; maximum = €375,000)

 

1.25%

For every euro (FEE) of the first €3 million

1%

FEE of the next €4.5 million

0.85%

FEE of the next €5 million

0.70%

FEE of the next €7.5 million

0.55%

FEE of the next €10 million

0.40%

FEE of the remainder

Type 2 gaming services (minimum = €25,000; maximum = €600,000)

4%

FEE of the first €3 million

3%

FEE of the next €4.5 million

2%

FEE of the next €5 million

1%

FEE of the next €7.5 million

0.80%

FEE of the next €10 million

0.60%

FEE of the next €10 million

0.40%

FEE of the remainder

Type 3 gaming services (minimum = €25,000; maximum = €500,000)

4%

FEE of the first €2 million

3%

FEE of the next €3 million

2%

FEE of the next €5 million

1%

FEE of the next €5 million

0.80%

FEE of the next €5 million

0.60%

FEE of the next €10 million

0.40%

FEE of the remainder

Type 4 gaming services (minimum = €5,000; maximum = €500,000)

0.5%

FEE of the first €2 million

0.75%

FEE of the next €3 million

1%

FEE of the next €5 million

1.25%

FEE of the next €5 million

1.50%

FEE of the next €5 million

1.75%

FEE of the next €10 million

2%

FEE of the remainder

Critical gaming supplies (annual licence fee, not compliance contribution)

€25,000

Annual revenue for Types 1 to 3 = less than €5 million

€30,000

Annual revenue for Types 1 to 3  = €5 million to €10 million

€35,000

Annual revenue for Types 1 to 3  = more than €10 million

€10,000

Providers supplying solely Type 4 gaming supplies

 

Further, licensees providing Type 1 to 3 gaming services must pay a non-refundable fixed annual licence fee of €25,000, whereas operators providing solely Type 4 gaming services must pay a non-refundable fixed annual licence fee of €10,000.

In addition to the above, under the Gaming Tax Regulations, all business-to-consumer operators (irrespective of the gaming vertical) will be subject to a gaming tax of 5% of the gaming revenue derived from end customers located in Malta.

Loot boxes

What is the legal status of and regulatory approach to ‘loot boxes’ in online games?

Loot boxes are not directly regulated under Maltese law. However, the MGA has recently signed an international declaration on the risks posed by blurring the lines between gambling and other forms of digital entertainment (eg, certain forms of video games). In this regard, it is possible that loot boxes could potentially be deemed to fall within the ambit of the controlled skill game licence under the Skill Games Regulations.

Cryptocurrency

What is the legal status of and regulatory approach to the use of cryptocurrency in online games?

The use of cryptocurrency in online games is specifically permitted under the Gaming Act.

In terms of regulatory approach, the MGA seems keen to leverage cryptocurrencies for the benefit of Malta’s gaming industry and recently published a guidance paper on a sandbox framework for the use of distributed ledger technology assets (ie, virtual financial assets and virtual tokens) as a method of payment.

Foreign and unauthorised gaming sites

What measures are in place to block foreign and other unauthorised gaming sites?

The blocking of foreign and other unauthorised gaming sites falls within the Executive Police’s remit.

In addition, the MGA website contains a public list of unauthorised URLs which the MGA declares that it has no connection with. Any reference to the MGA or gaming licences said to be issued by the MGA, as stated on such URLs, is false and misleading.

Lotteries, sweepstakes and prize competitions

Lotteries

What rules and restrictions govern lotteries in your jurisdiction (both commercial lotteries and any national lotteries)?

National lotteries may be operated only on concession from the government. Malta’s previous gambling framework outlined a set of basic rules and restrictions, mainly focusing on the tendering process for the award of that concession, whilst the bulk of the applicable rules and restrictions would be covered by the concession itself. This position will be maintained under the Gaming Act.

Otherwise, public (land-based) lotteries (eg, lotteries in clubs or advertising lotteries) were subject to a permit and specific duty and limited by regulations under the outgoing legislation. This will also still apply under the Gaming Act.

Lotteries which do not constitute an economic activity in their own right, and where any payments serve only to acquire promoted goods or services, are deemed to be ‘advertising lotteries’ under the outgoing legislation and require a licence from the Malta Gaming Authority (MGA). The aggregate retail value of all prizes that can be won cannot exceed €46,587.47 and a 25% duty is payable to the Ministry of Finance on such aggregate prize retail value. Under the Gaming Act, ‘advertising lotteries’ will be considered ‘commercial communication games’ and such games cannot have a cumulative prize exceeding €100,000 in one calendar month and €500,000 in one calendar year. Further, any single event must not award a prize exceeding €50,000. If the value of the stake is not higher than €2 per player and the value of the prize does not exceed €250, the game will be defined as a ‘limited commercial communication game’, provided that one person or entity organising a series of commercial communication games does not have a cumulative prize exceeding €5,000 in one calendar month and €50,000 in one calendar year.

After every such game, the operator must, under the Gaming Authorisations and Compliance Directive, report to the MGA:

  • the total number of participants;
  • the value in monetary terms of the prizes paid out (if any);
  • proof that the game was conducted in a fair and honest manner;
  • proof that it has adhered to any other requirements established by any other law;
  • the measures which were taken to ensure that no minors participated in the game or were otherwise exposed thereto; and
  • in the case of a limited commercial communication game, the gross amount of stakes wagered or otherwise contributed by the players.

The MGA may request any further information and documentation that it may deem necessary.

Commercial communication games (whether regular or limited) are, along with non-profit games wherein the value of the stake does not exceed €5 per player, deemed to be low-risk games and, as such, will require a low-risk games permit. This is a non-renewable and (unless permitted otherwise by the MGA) non-transferrable permit which will be valid only for the events for which it is granted and will expire once such event has been concluded.

Sweepstakes, prize draws and prize competitions

What rules and restrictions govern sweepstakes, prize draws and prize competitions?

Sweepstakes Under the outgoing legislation, ‘sweepstakes’ are defined as gambling on horse or greyhound races. In this regard, until 1 January 2019, on-track bookmakers are licensed by the Malta Racing Club under the responsibility of the police (no operators avail themselves of a greyhound racing licence at present). In this regard, the applicable rules and restrictions are as follows:

  • Licensees must operate racecourse bets only on races conducted on approved racecourses, by means of tickets sold only at the racecourse where the race is being conducted and to persons who have been admitted into the racecourse on payment of an admission fee or by means of tickets sold only to such other persons as may be specified in the licence (or otherwise prescribed).
  • At least 85% of the stakes must be distributed in winnings.

Under the Gaming Act (Chapter 583 of the Laws of Malta), sweepstakes will require a gaming service licence in accordance with the Gaming Authorisation Regulations.

Prize draws and competitions Promotional games, such as prize draws and competitions, typically constitute ‘commercial communication games’. Such games cannot have a cumulative prize exceeding €100,000 in one calendar month and €500,000 in one calendar year. Further, any single event must not award a prize exceeding €50,000. If the value of the stake is not higher than €2 per player and the value of the prize does not exceed €250, the game will be defined as a ‘limited commercial communication game’, provided that one person or entity organising a series of commercial communication games must not have a cumulative prize exceeding €5,000 in one calendar month and €50,000 in one calendar year.

After every such game, the operator must, under the Gaming Authorisations and Compliance Directive, report to the MGA:

  • the total number of participants;
  • the value in monetary terms of the prizes paid out (if any);
  • proof that the game was conducted in a fair and honest manner;
  • proof that any other requirements established by any other law have been adhered to;
  • the measures which were taken to ensure that no minors participated in the game or were otherwise exposed thereto; and
  • in the case of a limited commercial communication game, the gross amount of stakes wagered or otherwise contributed by the players.

The MGA may request any further information and documentation that it may deem necessary.

Commercial communication games (whether regular or limited) are, along with non-profit games wherein the value of the stake does not exceed €5 per player, deemed to be low-risk games and, as such, will require a low-risk games permit. This is a non-renewable and (unless permitted otherwise by the MGA) non-transferrable permit which will be valid only for the events for which it is granted and will expire once such event is concluded.

Advertising and marketing

Media advertising

What rules and restrictions govern media advertising for gaming establishments and activities?

The Gaming Commercial Communication Regulations (SL 583.09 of the Laws of Malta) provide for a number of obligations that are applicable to ‘commercial communications’, which are defined as text, images, sounds or any other medium that transmits information and is designed to promote (directly or indirectly) the goods, services, image or brand of a person pursuing a licensable gaming activity – in other words, advertising and marketing of gaming activities of any form. The primary obligations in this regard are as follows:

  • Advertising must be carried out only in respect of games and operators that have been authorised by the MGA.
  • Advertising must be socially responsible.
  • Advertising must not:
    • portray, condone or encourage behaviour that is criminal or socially irresponsible or that could lead to financial, social or emotional harm or encourage anti-social or violent behaviour;
    • suggest that gaming can be a solution to social, educational, professional or personal problems;
    • suggest that gaming can be an alternative to employment, a solution to financial concerns or a form of financial investment;
    • portray gaming as socially attractive or suggest that it can enhance personal or professional qualities;
    • portray gaming in the context of strength or link it to resilience or recklessness;
    • portray gaming as indispensable or as taking priority in life;
    • suggest that solitary gaming is preferable to social gaming;
    • suggest peer pressure to game or disparage abstention from gaming;
    • suggest that skill can influence the outcome of a game that is purely a game of chance;
    • provide false or untruthful information about the chances of winning or expected return from gaming;
    • exploit cultural beliefs or traditions about gaming or luck;
    • make reference to instantly available consumer credit services or any other ways of providing credit to players;
    • target self-excluded players; or
    • attempt to induce any players to continue playing.
  • Advertisers must not engage in any activity that involves the sending of unsolicited ads.
  • Ads must clearly display the name of the relevant authorised person and a reference to the entity to which the authorisation was issued.
  • Advertisers must not display any ads in public places or on transportation, unless within:
    • authorised gaming premises or in a work environment used by an authorised person; 
    • locations frequented mainly by tourists;
    • conferences or events specifically organised in relation to the gaming sector;
    • the premises of operators;
    • the premises of organisers or beneficiaries of authorised low-risk games; or 
    • newspapers or magazines.

Under the Requirements as to Advertisements, Methods of Advertising and Directions Applicable to Gambling Advertisements (SL 350.25 of the Laws of Malta), restrictions apply with respect to the hours within which gambling ads in the local broadcast media cannot be broadcast. For example, if gambling ads are broadcast between 7:00pm and 6:00am, they cannot be broadcast during, or immediately prior to or after, children’s programmes.

Other marketing methods

Do any rules or restrictions apply to other means of marketing and advertising gaming establishments and activities?

The abovementioned obligations apply to all forms of advertising of gambling, whether through the media or by other means.

Consumer protection

Protection of minors

What measures are in place to protect minors against gaming activities?

The Gaming Act (Chapter 583 of the Laws of Malta) holds that no person may offer, permit, entice, cause, invite or induce a minor to participate in a game which would solely be offered to persons who are not minors, whether by:

  • allowing the minor to enter gaming premises;
  • selling them a gaming ticket;
  • employing or engaging them in the provision of a gaming service;
  • advertising or promoting a gaming service to them; or
  • any other means whatsoever.

As outlined above, although the minimum age for gaming in Malta is 18 years old, casinos cannot allow Maltese citizens to enter their premises unless they are over the age of 25 years old. Any violation of these provisions constitutes an offence and will give rise to liability to a fine ranging from €10,000 to €500,000, up to five years’ imprisonment or both.

The Gaming Commercial Communication Regulations state that all advertisements, with the exception of sponsorship, are to prominently include (for their entire duration) an indication that the minimum age to participate in the game being promoted. Further, such ads cannot: 

  • be directed towards minors; 
  • encourage, target or feature minors;
  • appeal to minors in any way; or
  • exploit the vulnerabilities, aspirations, credibility, inexperience or lack of knowledge of minors or present gaming as a sign of maturity or move to adulthood.

In addition, the restrictions set out in the Requirements as to Advertisements, Methods of Advertising and Directions Applicable to Gambling Advertisements (SL 350.25 of the Laws of Malta) also apply in respect of minors. Under these requirements, restrictions apply with respect to the hours within which gambling ads in the local broadcast media cannot be broadcast. For example, if gambling ads are broadcast between 7:00pm and 6:00am, they cannot be broadcast during, or immediately prior to or after, children’s programmes.

The protection of minors is also specifically catered for in the Player Protection Directive (2/2018). The directive provides that business-to-consumer (B2C) licensees must have policies and procedures in place to prevent minors from using their gaming services and holding a player account, such as requiring players to affirm that they are of legal age before using a gaming service. Further, under the Gaming Premises Regulations, gaming premises may be no less than 75m from the entrance of educational establishments, playgrounds and playing fields.

Responsible gaming

What measures are in place to promote and ensure responsible gaming?

The Player Protection Regulations provide for various responsible gaming obligations, whereby an operator must ensure that:

  • proper controls, policies and procedures are in place to prevent gaming by minors and protect vulnerable persons;
  • the interests of all players are adequately safeguarded;
  • players are provided with information on all avenues of recourse that they may have if they feel aggrieved by an authorised person;
  • all information relevant to the gaming service is readily available to players;
  • information relating to responsible gaming is readily available to players;
  • tools that empower players to control their use of gaming services and safeguard themselves from the effects of problem gaming are readily available; and
  • the marketing and advertising of the gaming service is fair and in accordance with the law.

B2C licensees must publish a responsible gaming message on their website, which provides a warning that uncontrolled gaming can be harmful and details the player support measures available on the website. Such a message must also be displayed by operators in their gaming premises and on their online service offerings. In addition, B2C licensees must also make readily available to players means which may help them to determine whether they have a gambling problem. In addition, they must make readily available to players statistics regarding the time which the player has spent playing thus far and the player’s winnings and losses during such time.

Leaflets or other information materials, as well as contact information regarding one or more organisations which aid persons who have problem gambling issues, must be made readily available to players, wherein information relating to responsible gaming (including a responsible gaming message providing that gaming can be harmful if not controlled and information about player support measures available to players) must be included.

B2C licences must also make readily available to players a procedure whereby players may exclude themselves from playing for a definite or indefinite period and cannot gain access to gaming services during such period. In addition, they must ensure that their staff are properly and routinely trained for responsible gaming purposes.

A social causes fund must be set up and used for the fulfilment of responsible gaming endeavours, as well as other beneficial causes.

Gaming participants must generally be 18 years old. With respect to land-based casinos, the minimum age for participation in gaming activities is 25 years old for Maltese citizens and 18 years old for non-Maltese citizens.

Suspicious transactions

What measures and procedures are in place to report suspicious gaming transactions?

Gaming operators must apply a risk-based approach to their ongoing business, as required by the EU Fourth Anti-money Laundering Directive. In this regard, they must appoint a money-laundering reporting officer of sufficient seniority, who must consider any internal reports of unusual or suspicious transactions and, where necessary, file a suspicious transaction report with the Financial Intelligence Analysis Unit.

Under the Gaming Authorisations and Compliance Directive, B2C licensees that offer betting on sporting events must inform the Malta Gaming Authority (MGA) of any instance of suspicious betting. Further, B2C licensees which offer betting on sporting events must:

  • inform the MGA of any circumstances which may lead to one or more bets being voided owing to a suspicion of manipulation of the event to which they relate; and
  • provide any supporting documentation which the MGA may reasonably require on a case-by-case basis.

The Gaming Act provides that the MGA may – for the purposes of detecting, preventing and investigating the manipulation of sports competition – share information, including any relevant personal data, with sports governing bodies where suspicious betting activities have been detected.

Disputes

How are consumer disputes in the gaming industry resolved?

In practice, consumer disputes are rarely escalated to the courts and are generally resolved out of court. However, should attempts to reach an amicable settlement prove futile, recourse to the local Civil Courts (typically either the Commercial Section or the First Hall, depending on the nature of the claim) would be possible.

Consumers may file a complaint with the MGA’s player support unit, which will assess and decide the case based on the facts presented by the operator and the complainant.

If the consumer is dissatisfied with the MGA’s decision, it may file an appeal with the Administrative Review Tribunal within 20 days of being served with notice of the MGA’s decision. Appeals of tribunal decisions on points of law may, in turn, be filed with the Court of Appeal in its inferior jurisdiction within 20 days from the tribunal’s decision.