As a result of innovations, Malta has become one of the most popular jurisdictions

On 12 July, the Malta Gaming Authority (MGA) published a list of updated gambling regulations adopted in accordance with the legislative reform.

As scheduled, the previous legislation was replaced by the special Act of Parliament entitled the Gaming Act, drafted with series of directives covering the main regulated areas.

The new regulatory framework empowers the MGA to exercise a greater flexibility in decision-making and to redistribute control on jurisdictions in order to take full focus on areas of higher risk profile.

The reform also involves an improvement of standards for player protection and a liability of operators based on risk assessment, while the MGA is given greater authority to enforce the rules.

These updates have been prepared for a long time based on a number of initiatives. The opinion of the public, technical studies and the assessment of economic and financial implications were taken into account. It was based on the MGA's experience achieved while operating as a regulator for a long time.

The bill seeks to ensure that the regulation covers new potential areas of the gambling market, taking into account possible social risks. Developments have also affected the rules for the online gambling segment. Great emphasis will be placed on the development of Internet gaming and the emergence of new types of gambling, such as skill games and fantasy sports.

The key points of innovation are (the full text can be found here):

  • Replacing the ongoing multi-license system with a system of two license types: Business-Consumer (B2C) and Business-to-Business (B2B).
  • Switching to an objective management to ensure a development of innovation.
  • Broadening the regulatory potential capacity to increase the degree of the MGA supervision and allow it for intervention where necessary.
  • Widening the MGA's  powers and enforce regulatory requirements, as well as effective regulation in accordance with anti-money-laundering and the funding of terrorism obligations.
  • Segmenting the key officials' roles for the gaming activities into the various functions of the licensed activities requiring an approval.
  • Strengthening the player protection system by formalizing the role of the MGA's Player Support Unit, as well as consolidating the separation of player assets and moving to a single database.
  • Introducing new and more effective criminal and administrative justice processes, including the allocation of appeals against decisions of the MGA to the courts and the introduction of a distinction between administrative and criminal offences.
  • Introduction of a management system to protect operators in difficulty and support the closure of gambling projects to protect the jobs and assets of players.
  • Moving towards automated reporting and compliance with regulatory obligations to strengthen oversight of the MGA.
  • Strengthening the Regulator's role in combating the manipulation of sports competitions by introducing new obligations on operators to control sports betting and to transmit suspicious betting data to the National Anti-Corruption Task Force.
  • The consolidation of taxation into one flow, as well as the exemption of the B2B licensees from gaming tax, which will increase Malta's competitiveness as a center for such service suppliers.

Thus, following the launch of the British withdrawal process from the EU, Malta, altering gambling legislation, is now the most attractive for operators of Gibraltar seeking alternative jurisdiction.

Joseph Kushheri, chairman and Chief Executive officer, MGA, said: "The measures we impose will ensure that Malta's reputation and relevance as a global gaming jurisdiction will be sustained in the long term, leading to increased business activity and further development."

Recent studies show that, from January to April 2017, Malta recorded:

  • 79% increase in the number of applications for gambling licenses and 33% increase in the number of licenses already issued compared to the same period for the previous year;
  • Increased law enforcement activity in ensuring the requirements of gambling legislation for the same period over the last three years.

Read also: In 2017 Malta issued twice more licenses than last year

These figures show that Malta is the most attractive hub for global network operators, which have opted to leave Gibraltar's jurisdiction after Brexit.

The process of transition from one model of jurisdiction to another is expected to accelerate in the near future, as Gibraltar's gambling industry received a new blow in June. The European Court of Justice decided that the state would have to pledge more taxes to Great Britain. More than 50 leading operators are currently working in Gibraltar. And all of them are of interest to Malta.

Read in our blog about features of getting Malta license for gambling business.

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