The Malta Remote Gaming Regulations 2004 have been revised and were publicly presented by the Lotteries and Gaming Authority (LGA) in mid-October 2005. The LGA commissioned the Malta Remote Gaming Council (MRGC) to lead the consultation process and the Legal & Regulatory Work Group of the MRGC has worked on suggestions for presentation to the LGA.

The raison d'etre behind these proposed amendments is to render the regulations logistically more advantageous to the operator whilst at the same time  preserving the protection afforded to the player.

Main Advantageous of the Malta Remote Gaming Regime

Malta introduced its new Remote Gaming Regulations in April 2004. These regulations were a much awaited mile-stone superseding the previous law regulating offshore betting offices (The Operation of Betting Offices Regulations, 2000 - LN 34). The Remote Gaming Regulations 2004 definitely present an answer to cyberspace operators that want a qualitative solution to their business needs.

Serious and avant-garde regulatory techniques, verifiable and stable policies and a positive regulatory ambience are not the only benefits derived from establishing one’s operation in Malta. The benefits are various and range from advantageous corporate and gaming taxes, a variety of licensable activities, the skill of the Maltese workforce, stable IT resources and the general competitiveness of costs when setting-up one’s operation.

One other very important consideration for an operator tapping the European market is the freedom to provide one’s services throughout the EU. Malta is a full member of the EU and this is very important to any operator wishing to target Europe. This definitely translates in additional benefits for:

• The player - who would be dealing with a regulated operator;

• Other Regulatory Authorities – who would know that their nationals are playing with an operation regulated in accordance with serious standards imposed by an EU country.

Main Changes in the Proposed Amendments

Since the inception of the Remote Gaming License in May 2004, operators, service providers and the Regulator have felt the need for a revision of the Regulations to render them more operation-friendly. This is being done, whilst keeping in mind that player satisfaction is the higher-good.

The main proposed changes include:

Clarification of the scope of the 4 types of Licenses
Further Regulation of the Role of Key Person
Changes in the Control & Gaming System Provisions
Restructuring of the Application Fees & Gaming Taxes Payable by the Operator

Results of such Changes in the Proposed Amendments

The upgrading of the Remote Gaming Regulations has paved the way for a new type of business models to seek licensing in Malta. This includes poker and other skill games operations. The fact that under the Proposed Draft the Gaming Server can be located overseas results in various advantages for time critical multiplayer game operators who may be adversely affected from variable response time if their game server is in Malta.

The license costs have also changed considerably and one is happy to note that the gaming taxes have been reduced, hence rendering a Malta license more attractive.

The proposed regulations also present the gaming tax payable by holders of a License 3. These companies do not partake in the risks of the game operator but act as promoters of remote gaming - they are the intermediary between the operator and the player (poker exchanges, betting exchanges, commission-based clubs, virtual poker rooms etc). The proposed gaming tax on such operations is 5% on gross income (rake) less the bonuses, commissions and payment processing fees.

The aim behind the changes is to streamline the law with the current operational needs of companies setting up shop in Malta. The new regulations are game and technology neutral, hence never limiting the 'genre' of games and would include any type of traditional or hybrid product. The clarity in the definitions section was a much awaited move and the introduction of new sections such as those regulating intermediaries, affiliates and white labels definitely act as guidance to the operator on the regulation of these types of third party relationships.

Open-Forum Discussion

Naturally, the draft proposed regulations were open to discussion and comment by the stakeholders. Operators and applicants were encouraged to put forward their concerns for presentation to the LGA before finalisation of the new legal regime. The aim was to render the regulations as logistically-friendly as possible, whilst at the same time protecting the consumer and the operator himself.

CC-Advocates is an active member of the Legal & Regulatory Work Group in charge of presentation of comments and suggestions to the LGA and has therefore been very closely involved in the drafting of these new laws.