On 1st August 2018, the new Gaming Act came into force, thus introducing a regulatory framework to further stimulate innovation in the sector on the island while ensuring adherence to international anti-money laundering and de-risking requirements. But, over one year on, did the legislation hit a home run? Rebecca Anastasi speaks to three stakeholders to find out.
In 2004, Malta enacted legislation to regulate online gaming, putting the country in pole position – ahead of every other EU member state – to attract a spate of iGaming firms to the island and build an industry based on favourable taxation and corporate conditions. The island was, thus, also able to woo a workforce of thousands looking for good jobs, great weather and a Mediterranean lifestyle, boosting ancillary sectors such as property, hospitality and retail.
But, 14 years on, in 2018, it was evident that the local and international landscapes had changed and there was a need for regulatory reform to allow the sector to continue flourishing. On 1st August last year, the new Gaming Act, ratified by the Maltese Parliament five months earlier, came into force, setting a standard at which the industry could operate over the next few years.
The Malta Gaming Authority (MGA), in its report published in July this year, specified that the aim was to establish “objective-oriented standards as opposed to prescriptive requirements, thereby encouraging innovation and development,” and to empower the Authority further, thus strengthening “its activities” so it can “continue being a thought leader for years to come”.
To this end, the legislation allocated more resources to the MGA; prioritised “riskbased” approaches and was, therefore, formed to be “fully in line with concurrent developments relating to AML/CFT”. Moreover, the Act also reworked the role of the Key Official – employed by iGaming firms – into “various key functions within a licensed activity” and shifted from a multilicensing regime to offering a singular B2B or B2C umbrella licence. The raft of new rules also increased protection standards and responsible gaming measures, and launched a fiscal structure which is more in line with companies’ operations. But have these changes solidified Malta as a leader in the sphere?
Enrico Bradamante, Chairman of the industry trade
“The new law has strengthened the MGA and the value of being licensed by the Authority,” says Enrico Bradamante, Chairman of the industry trade association iGEN, which represents the interests of the iGaming sector. “The regulator is now able to exercise greater functions and, therefore, the value of having a Maltese licence has been strengthened. Indeed, the positives are that the MGA now has more enforcement powers and it is using these enforcement powers,” he asserts.
Mr Bradamante also points to the positive effect the new legislation has had through the introduction of new licence categorisations. “So, there is now this differentiation between B2B and B2C licences which has clarified some of the grey areas, though I don’t think the law itself has dramatically changed the way operators have had to work. I’ve not heard of any major difference, at any rate,” he attests.
So, considering the attention Malta has given to refining the regulations locally, could it take more of a role in creating a framework for the sector supranationally? “Malta has been the pioneer in this sector and has definitely paved the way. The MGA was the first regulatory body of its kind and Malta, as a jurisdiction, remains the one which is driving the industry internationally. There is no other hub like Malta and it is the home of iGaming today. So, the regulator – and Malta as a country – has an interest in driving the agenda forward,” says Mr Bradamante.
Indeed, he notes that one of the biggest issues facing the entire sector at the moment is the lack of harmonised legislative regimes across European states. “In general, the industry itself is over-regulated, in that there are so many different standards set in different countries in Europe where firms from Malta are doing business. So, these iGaming companies need to adhere to these different rules, across countries, which is then being translated into additional costs, such as technical expenses, licensing fees, and so on. Uniformity of regulation is something which the industry would love to see, ideally on a European level,” he notes.
And so, he believes, Malta can spearhead such change, though he warns that he doesn’t see the situation changing anytime soon. “As iGEN, we’ll be meeting with the Maltese MEPs and this is one of the issues we will raise on behalf of the industry. But, as far as I’m aware, there is no programme, no effort, which is being done on a European level to harmonise the regulations of the iGaming industry,” he points out.
Reili Suzi, Senior Compliance Manager at Betsson Group
Echoing much of Mr Bradamante’s thoughts, Reili Suzi, Senior Compliance Manager at Betsson Group, says that “the Act has also brought about several changes that allow for better clarity as to the expectations of the regulator. In fact, it is a very comprehensive piece of legislation and we now have a single rulebook across the sector.” She also refers to the licensing structure as a positive development, “where you can now make use of common B2C licences across different brands and gaming systems”.
Moreover, Ms Suzi underlines that the transparency of the new legislation has proven beneficial over the past year. “Player protection is vital in our business and having this level of clarity is a good tool to generate consistencies across the sector,” she states. Further reasserting Mr Bradamante’s views, the Betsson Compliance Manager notes the strengthening of the MGA, saying that this “is noteworthy, of course,” since it helps Malta keep “up its jurisdictional reputation and ensure that sufficient scrutiny is being carried out.”
“The changes have challenged the operators, given the different layers of regulations and because the spotlight is not only on regulating the core gaming business but also different horizontal aspects of the business – the payment providers, the game providers, and so on,” she explains. Indeed, “the spotlight on regulating and re-regulating various aspects of the business has led to an environment where it has become challenging to get into the swing given there is always a next large-scale change in the pipeline,” she outlines.
This is an extract of an interview which featured in the November edition of iGaming Capital.