Law and Practice

1. Introduction

1.1 Current Outlook and Recent Changes

The primary legislation regulating gambling activities in Malta is the Gaming Act 2018 (Chapter 583 of the Laws of Malta) (the "Gaming Act"). This primary piece of legislation has been further augmented by a series of ancillary legislative instruments, encompassing both regulations and directives.

The Gaming Act was amended during 2023, where wording was introduced in order to emphasise that as a principle of public policy no action shall lie against a licensed operator and/or current and/or former officers and/or key person of such licensed entity for matters relating to the provision of a gaming service or against a player for the receipt of such gaming service if such action conflicts with or undermines the legality of the provision of the gaming service in or from Malta by virtue of a licence issued by the Malta Gaming Authority (MGA, or the "Authority") and relates to authorised activity which is lawful in terms of the Gaming Act and other applicable regulatory instruments. As a result of this, a court of law in Malta shall refuse recognition and/or enforcement in Malta of a foreign judgment or decision given regarding an action as mentioned above.

2. Jurisdictional Overview

2.1 Online

All types of gaming are permitted to be offered online under the Maltese regime, as long as the necessary authorisation is obtained from the MGA. The Maltese regime considers four types of games.

  • Type One gaming services: these are games of chance wherein participants play against the house. The outcome is ascertained by a random number generator and encompasses casino-style offerings, inclusive of roulette, blackjack, baccarat and poker when contended against the house, as well as lotteries, secondary lotteries and virtual sports competitions.
  • Type Two gaming services: these refer to games of chance where participants play against the house, but the outcome is not determined randomly. Instead, it is contingent upon the result of an external event or competition unrelated to the game of chance. The operator mitigates its risk by adjusting the odds presented to the participant.
  • Type Three gaming services: these are games of chance wherein participants do not play against the house. The operator does not bear the gaming risk but accrues revenue via a commission or other fees based on either the stakes or the prize. This category includes player-versus-player games such as poker and bingo, betting exchanges and other games that generate revenue through commissions.
  • Type Four gaming services: this category pertains to controlled skill games, in particular fantasy sports.

2.2 Land-Based

All types of gaming are permitted to be offered through gaming premises under the Maltese regime, as long as the necessary authorisations are obtained from the MGA. Land-based casinos require a concession from the government of Malta apart from the authorisation from the MGA, and certain lotto products are subject to a national lottery licence, which is granted after an international public tender and the issuing of a concession from the government of Malta.

3. Legislative Framework

3.1 Key Legislation

The Gaming Act is the primary piece of legislation, supplemented by various regulations, directives and policies. There is a "three tier" framework, as set out below.

Tier One: Main Act

  • Gaming Act 2018.

Tier Two: Secondary Legislation and Regulations

  • Gaming Authorisations Regulations 2018;
  • Gaming Commercial Communications Regulations 2018;
  • Gaming Compliance and Enforcement Regulations 2018;
  • Gaming Definitions Regulations 2018;
  • Gaming Player Protection Regulations 2018;
  • Gaming Premises Regulations 2018;
  • Gaming Licence Fees Regulations 2018;
  • Gaming Tax Regulations 2018;
  • Retention of Data (Malta Gaming Authority) Regulations 2019; and
  • Social Causes Fund Regulations 2018.

Tier Three:  Directives and Other Legally Binding and Non-binding Instruments Issued by the MGA

Directives 2018

  • Directive on Start-Up Undertakings;
  • Player Protection Directive;
  • Gaming Authorisations and Compliance Directive;
  • Directive on the Calculation of Compliance Contribution; and
  • Alternative Dispute Resolution (ADR) Directive.

Directives 2019

  • Gaming Premises Directive (amended in April 2020);
  • De Minimis Games Directive;
  • Gaming Devices Ruling; and
  • Amusement Machines Directive.

Directives 2020

  • VAT Fiscal Receipt Lottery Directive;
  • Low Risk Games in Care and Nursing Homes Ruling; and
  • Directive on the Key Function of the Prevention of Money Laundering and the Financing of Terrorism.

Directives – 2021

  • Non-Profit Games during Political Events Ruling.

Directives – 2022

  • National Lottery Ruling.

3.2 Definition of Gambling

The Gambling Act does not provide a simplified definition of "gambling", instead it provides definitions which form the basis of the gambling framework. Article 2 of the Gambling Act provides the following definitions.

  • "Game" as a game of chance or a game of skill.
  • "Gaming" as an activity consisting in participating in a game, offering a gaming service or making a gaming supply.
  • "Game of chance" as an activity where the outcome of which is determined by chance alone or predominantly by chance and includes activities the outcome of which is determined depending on the occurrence or outcome of one of more future events.
  • "Game of skill" or "skill game" means an activity the outcome of which is determined by the use of skill alone of predominantly by the use of skill, but excludes a sports event unless otherwise established under the Act.
  • "Gaming device" means any device or object, including any electrical, electronic, or mechanical device, ticket or any other thing, that is used or is by its nature intended for use as part of a gaming service or in connection therewith in a gaming premises.
  • "Gaming service" means making a game available for participation by players, whether directly or indirectly, and whether alone or with others, as an economic activity.
  • "Gaming supply" means a supply, directly or indirectly, of a good or service, in relation to a gaming service, which is either a material gaming supply or ancillary gaming supply, but does not include provision of a key function.

3.3 Definition of Land-Based Gambling

The Gaming Act does not define land-based gambling per se, however, it considers gaming premises as one of the channels of delivery a licensed entity may be licensed to provide gaming services from. The Gaming Definitions Regulations define "gaming premises" as any premises accessible to the public, which is used or intended to be used for players to participate in a gaming service, and "controlled gaming premises" as any premises intended to make available for use, to host or operate one or more gaming devices, but shall not include premises in which gaming is carried out in virtue of a concession by government, or premises in which the only gaming which is carried out consists in tombola games.

3.4 Definition of Online Gambling

The Gaming Act does not define online gambling, however, it considers online as one of the channels of delivery of gaming services. In addition, the Gaming Act considers remote but not online as a third channel of delivery, thus covering those situations where remote gaming takes place, but not through the online channel, such as via post or via telephone.

3.5 Key Offences

The Third Schedule to the Gaming Act provides a list of offences against the Act. These include:

  • providing a gaming service and/or a critical gaming supply which requires a licence, without the necessary licence issued by the Authority or another competent authority in the EU or the EEA, or aiding, abetting or otherwise facilitating such provision;
  • acting contrary to, or not adhering to the fullest extent possible to, an order issued by the Authority;
  • committing one or more of the breaches envisaged in Articles 29 (counterfeiting and forgery), 30 (place used for unlawful gaming), 32 (not producing or supplying for inspection any books, documents, video, audio, information or any other thing as my be required by the Authority to carry out its functions) and 33 (supplying false, misleading or incomplete statements) of the Act;
  • preventing, obstructing or delaying a police officer or officer of the Authority lawfully authorised to enter premises suspected to be used in contravention of any regulatory instrument, or giving an alarm or warning in case of such entry;
  • using, transferring the possession of, sending or delivering to any person or place, acquiring, receiving, keeping, transporting, transmitting, altering, disposing of or otherwise dealing with, in any manner or by any means, any money, property (whether movable or immovable) or any proceeds of any such money or property with intent to conceal or convert that money or property or those proceeds and knowing or suspecting that all or a part of that money or property, or of those proceeds, was obtained or received, directly or indirectly, as a result of any act of commission or omission which constitutes an offence against the Act;
  • failing to effect payments to players when lawfully due: provided that where it is disputed whether a payment is lawfully due or otherwise, such payment will be deemed to be lawfully due for the purpose of this provision when there is a final binding decision to that effect by a competent court of law or dispute resolution entity;
  • failing to ensure the integrity and availability of essential regulatory data; and
  • any other breach specified in any regulatory instrument which is defined therein as giving rise to a criminal offence or an offence against the Act.

3.6 Penalties for Unlawful Gambling

The Third Schedule of the Gaming Act states that providing a service and/or supply which requires authorisation without the necessary authorisation and aiding or abetting such activity is considered a criminal offence.

In the case of any breach mentioned in the Third Schedule, there is discretion to impose a penalty of up to EUR500,000 for each infringement as an alternative to criminal court proceedings which may result in imprisonment.

Unlicensed offshore operators targeting Malta are not placed on a domain blacklist, however there is a list of unauthorised domains which falsely pertain to be regulated in Malta. There are no comprehensive payment service provider blocking mechanisms deployed.

3.7 Recent or Forthcoming Legislative Changes

The latest changes have focused on complementing the online gaming framework by permitting innovative licensees to utilise decentralised ledger technology and accept crypto-assets. The MGA has also launched a voluntary ESG Code of Conduct for its licensees.

Furthermore, the MGA has recently launched a number of consultations with the industry, wherein the following matters were looked into:

  • the regulation of third-party service providers that are currently assisting authorised persons with submission of an application;
  • a revision of the Information Security Incident Report; and
  • the proposal of a policy on minimum capital requirements to be eligible for licensing.

As a result, new directives following these consultations might be issued in the near future.

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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.