The Gaming Act officially came into force on 1st August 2018. The new framework has brought about significant changes that will affect both present and future companies operating within the sector.

Here are some of the most salient points that will impact operators and service providers in Malta.

The MGA has replaced all previous gaming- related legislation with one single act, the Gaming Act. This legislation governs all gaming services in and from Malta and it will be supported by subsidiary legislation, codes, guidelines, and directives.

 The current multi-licence system has been replaced by two licences - a B2C licence (Gaming Service licence) to offer or carry out a gaming service, and a B2B licence (Critical Gaming Supply licence) to provide or carry out a critical gaming supply.

 The duration of each issued licence has been extended from five to ten years, providing operators with significantly more long-term stability.

 When it comes to taxation, all gaming services are required to pay a gaming tax of 5% of their Gross Gaming Revenue generated where gaming services are offered to any player who is physically present in Malta at the time when the gaming service is actually provided. Operators of B2C businesses are also required to adhere to a compliance contribution based on game type and annual revenue, whilst B2B operators will be exempt from gaming tax and only required to pay a fixed fee.

 The new licence fee is EUR25, 000 in addition to the compliance contribution fee which will be added to the total, based on the gaming revenue which has been generated that year. There is, however, a variable component of the licence fee that composes of a minimum fee of EUR15,000 or EUR25,000 and a maximum cap of EUR375,000, EUR500,000, or EUR600,000 which depends on the type of games that are offered to the customer.

 Those providing critical supplies are also required to pay a licence fee which again varies, depending on the services that are provided. Providers of games are subject to an annual fee of between EUR25, 000 and EUR35, 000 dependent on revenue. Those providing back end services or a data control system are subject to annual fees of between EUR3, 000 and EUR5, 000.

Comprehensive clarification has been provided that covers games of chance, chance and skill, and skill. This list of standardised criteria will provide more certainty when deciding which category a game should be placed into. There has also been a shift away from the prescriptive approach, to one that is based more on regulatory objectives.  This should provide for more flexibility for unorthodox games as well as encouraging innovation and new developments within the industry.

 Under the new law, the MGA has extended its supervisory, enforcement, and monitoring laws and a greater emphasis has been placed on transparency when it comes to accessing operator’s data. A new compliance review process has been implemented and it will be used when there is a suspected breach of law or regulations. In addition to this, new reporting procedures have been introduced that will bring the law in line with the latest EU AML laws.

 The MGA will issue a list of non-compliant operators that will be available publicly. To remove oneself from the list, the operator must make a submission to the MGA to address the issues raised. If they are able to provide satisfactory evidence that they are in fact in full compliance, then they will be removed from the list.

 Various regulations have been implemented that will address issues around responsible gaming, underage players, and fair advertising. These have been designed not only to protect players and operators, but to improve the reputation of the industry on a global scale. Additional clauses have been included that are set to ensure the compliance of outsourcing agreements and service providers to guarantee that the integrity of the industry is retained.

 This list is not exhaustive and to gain a fuller understanding of how the new Gaming Act will affect any entity that operates both in and from Malta and within the iGaming sector, it is advisable to engage the services of a legal professional.

Should you have any questions with respect to how these changes shall affect your business, please contact our GM Corporate & Fiduciary team.