The daily fantasy sports ('DFS') industry has been a hot
topic of debate in the United States market. Since US Law is not
clear on the legality of DFS, individual states have adopted their
own legislation on this topic. As a result of this, DFS operators
in the US have started to explore the option of expanding to other
markets, such as Europe. The main problem with the regulation of
DFS in any jurisdiction, is that this is sometimes classified as a
game of skill, and at other times classified as a game of
In the wake of the publication of its Position Paper on Digital
Games of Skill with Prize in December 2015, the Malta Gaming
Authority ('MGA') has published its position on this
activity, announcing that DFS operations would be exempt from
licensing. This exemption is being granted on the basis of the
element of skill and knowledge involved in fantasy sports, which
warrants that such an activity should be differentiated from games
of chance in terms of licensing and regulation. Fantasy sports
where players choose virtual representations of real-life spots men
and women, and where the credit attributed to the player reflects
the athletes' performance in actual sporting events,
necessarily involve an outcome that is determined predominantly by
skill and knowledge rather than by chance. The MGA is of the
view that fantasy sports are to be differentiated from games of
chance in terms of licensing and regulations due to the elements of
skill and knowledge involved in fantasy sports.
The proposed Skill Games Regulations have been notified to the
European Commission as part of the process, in accordance with
the Technical Regulation Information System (TRIS) procedure. These
regulations will form part of the MGA's planned technical
overhaul of Malta's regulatory and licensing framework. In the
interim, Legal Notice 271 of 2016 entitled the Fantasy Sports (exemption) Regulations (S.L.
438.10) has been published, exempting fantasy games from the
requirement of a gambling licence in terms of the Lotteries and
Other Games Act (Chapter 438 of the Laws of Malta) or the
Remote Gaming Regulations (S.L. 438.04).
The MGA is open to receiving interests via ad hoc notifications,
in order to closely monitor operations and evaluate potential
risks to customers. Entities offering fantasy sports may
voluntarily notify their operations to the MGA by completing the
'Fantasy Sports Notification Form' (this may be viewed here), in order to obtain formal recognition
from the MGA, which recognition will effectively serve as a
"seal of guarantee" for players..
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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