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.