The Malta Gaming Authority ('MGA') has just published a new consultation paper proposing major reforms to Malta's current gaming legal framework. The proposed overhaul aims to repeal all the existing gaming legislation currently in force by replacing the latter with a singular primary Act of Parliament entitled the Gaming Act, which will empower the competent Minister to publish regulations and grant powers to the MGA to publish directives and issue rulings as well as guidelines and policies, thereby ensuring timely and flexible interventions, especially in relation to technical specifications and processes.

In rethinking its approach, the new regulatory framework is underpinned by a number of innovative, forward-looking regulatory objectives seeking to encourage and protect the development of new potential gaming sectors whilst promoting the enhancement of i) best-in-class consumer protection standards, ii) responsible gaming measures and iii) a risk-based approach to render licensing and monitoring processes more effective and efficient. It sees the MGA building on areas of strength, rationalising others and expanding its regulatory competence and powers. In its aim to not overburden the industry, streamlining supervision and modernising the existing gaming framework, the MGA's top priority is to be more agile in its decision-making and decreasing unnecessary regulatory burdens which are not conducive to the regulatory objectives, whilst concurrently strengthening supervision and focusing the regulator's efforts on the areas which present a higher risk profile.

These proposals, besides reflecting the knowledge which the MGA has garnered from years ofexperience regulating the sector, are the direct result of various public consultations, technical studies and economic and financial impact assessments. Most importantly, they seek to address the ever evolving problem of increased technology convergence between remote and land-based gaming whilst ensuring effective regulation, irrespective of technology advances and development of new business models. In proposing technology and game- neutral forms of licensing gaming activities, one of the main changes proposed by the MGA is to replace the current cumbersome 'multi-license' system with a system comprising of two different types of licenses – a Business-to-Consumer (B2C) licence and a Business-to-Business (B2B) licence – which will cover different types of activities across multiple distribution channels. This 'simplification' in the MGA's licensing system is expected to allow the MGA to allocate more of its resources to ongoing compliance monitoring of the licensee's activity.

Other changes being proposed by the MGA include:

  • Adopting an objective-based rather than excessively prescriptive regulatory approach,
  • Widening the MGA's regulatory scope to better facilitate oversight and allow for intervention where necessary and in a proportionate manner;
  • Widening the MGA's powers under the compliance and enforcement functions to better achieve the regulatory objectives, in line with concurrent developments on anti-money laundering and funding of terrorism obligations;
  • Segmenting the Key Official role into various key functions within a licensed activity and ensuring that the 'competence' of such an individual is attested by means of certification, relevant experience and continuing professional development;
  • Bolstering player protection by formalising the mediatory role of the MGA's Player Support Unit, enshrining segregation of player funds at law and moving towards a unified self-exclusion database across both remote and land-based delivery channels;
  • Introducing new and more effective processes for criminal and administrative justice, thereby allowing regulated entities and persons to appeal MGA decisions to the Administrative Review Tribunal through a judicial process in line with natural justice principles and the introduction of a distinction between administrative and criminal offences;
  • Introducing the concept of administration to protect an operation in distress and, if necessary, to assist the winding down of an operation, thereby protecting jobs and player funds;
  • Moving towards automated reporting, facilitating adherence to regulatory obligations and strengthening the Authority's oversight;
  • Bolstering the Authority's role in the fight against manipulation of sports competitions by introducing new obligations on operators to monitor sports betting and report suspicious bets, in line with the efforts being made by the National Anti-Corruption Task Force in which the Authority also participates actively;
  • Extending the licence term from 5 to 10 years, subject to certain games offered under a Government concession;
  • Streamlining taxation into one flow with two main layers; and
  • Exempting B2B operators from gaming tax, thereby increasing Malta's competitiveness as a hub for such operators.

The consultation period in respect of the proposed new legal framework will close on 23rd August 2017.