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 – Legal Notice 34).
Under the old law, licensing of a betting office setting up shop in Malta required a presence in Malta in the form of a premises from which the betting office’s operations were carried out. These regulations covered only betting operations and did not cater for computer-generated games. In fact the internet was merely sanctioned as a communication medium to the call centre.
Other factors also hit the Maltese offshore betting regime badly: the UK responded to the exodus of UK operators by changing its betting tax to 0%, hence resulting in 16 operators closing down shop in Malta; the Maltese offshore regime was being phased out and the need was being felt that new Regulations were necessary. These had to reflect the needs of a changing market and to cater for other emerging forms of gaming, besides betting.
Malta’s Remote Gaming Regulations, 2004 presented a completely new solution to all types of operators and activities. Activities range from betting, online casinos, casino-style games, betting exchanges, lotteries and bingo to gaming software houses and marketing companies.
The aim of the new regulatory regime is to provide a Cyber-Space Gaming License that is both technology neutral and game neutral encompassing any type of gaming using any means of distance communication, including internet, digital TV, mobile phone technology, telephone and fax.
Raison d’Etre behind the Regulations
The proper operation on interactive games
The protection of players
The prevention of money laundering
Exigencies of public interest
The regulatory authority in charge of issuing remote gaming licenses is the Lotteries & Gaming Authority.
The licensing process is regulated by the Remote Gaming Regulations 2004 issued under the Lotteries and Other Games Act. To provide remote betting/gaming services from Malta, an operator needs to obtain a licence of the class appropriate to its operations. The framework requires licensees in accordance to LGA’s policies, laws and regulations , as well as anti-money laundering laws, e-commerce legislation and any other applicable legislation.
Technical & Operational Requirements
The license requires the operator to conform to a set of technical and operational rules & requirements that ensure that the operation runs smoothly and successfully and at the same time, that players and Malta’s reputation as a serious financial services and gaming centre, are protected. See ‘Technical & Operations Requirements‘ for more detail.
The new licensing laws give particular focus to player protection. In fact, the operator has to follow particular rules, including:
Players funds to be kept separate from Licensees own funds
Licensee shall instruct and authorize the credit financial institution by which a players account is held to disclose any information as may be requested by the Authority to the LGA
Funds in the players account, including funds in transit or in the process of being cleared through the banking system must be at all times at least equal to the aggregate of the amount standing to the credit of players account held by the licensee
Four classes of licenses
Class 1 operators managing their own risk on repetitive games (casino-type games, skill games and online lotteries)
Class 2 operators managing their own risk on events based on a matchbook (fixed odds
betting, pool betting and spread betting)
Class 3 – operators promoting and abet gaming from Malta & taking a commission from
promoting and/or abetting games (P2P, poker networks, betting exchange and game portals)
Class 4 operators hosting and managing online remote gaming operators, excluding the licensee himself (software vendors developing platforms from which gaming operators can operate).
The license is valid for a period of 5 years and may be renewed for further periods of 5 years.
Malta’s introduction of this new remote gaming licensing regime has resulted in an inflow of operators seeking to regularise their position by obtaining a licensed that is reputable, trustworthy and sanctioned by the EU. This, coupled to the fact that the license is not expensive and the favourable taxation, justifies why serious operators have chosen Malta as the ideal location for their activities.