Malta Gaming Authority Questions

FAQs related to the Malta Gaming Authority. (MGA)

The information provided in the answers should serve only as guidance and does not have any legal force. For online live FAQs updates refer here

HOW TO APPLY FOR A LICENCE?

The Authority has made available the necessary procedures through its Licensee Relationship Management System (LRMS) .

Applicants are welcome to apply by logging into the LRMS and following the simple processes. The LRMS provides a dedicated dashboard that will give users the possibility to follow the status of their requests in real-time, ensuring efficiency and transparency.

WHAT HAPPENS WHEN AN APPLICATION IS SUBMITTED TO THE AUTHORITY?

Following the submission of the application, the Authority through the Financial Directorate will verify settlement of payment.

Once this is verified, this is forwarded to the Regulatory Directorate to commence application review, for approval and issuance of the requested Gaming Licence.

The Malta Gaming Authority may require further information and/or amendments, and/or submission

of required documents to complete the application review according to the gaming legislations.

WHAT TYPE OF LICENCES ARE AVAILABLE?

The Authority may issue licences of the following categories:

• Gaming Service licence: a business to consumer licence to offer or carry out a gaming service;
• Critical Gaming Supply licence: a business-to-business licence to provide or carry out a critical gaming supply.

WHAT IS THE LICENCE FEE AND WHEN IS IT DUE?

Any person in possession of a gaming service licence issued by the Authority shall pay to the Authority a licence fee that depends on the type of approval in line with the Gaming Licence Fee Regulations, which may be found on the Authority’s website here.

WHAT TYPE OF GAMES REQUIRE A LICENCE?

The regulatory framework covers games of chance, games of chance and skill and skill games. The Authority shall be guided by a list of criteria in determining whether a game is a skill game or otherwise, with the onus of proving whether a game is one based on skill or otherwise being placed on the proponent of such game. Such classification by the Authority must be issued via a ruling or binding instrument to ensure consistency and transparency.

The Malta Gaming Authority may decide to classify a game as licensable or exempt, as well as to determine whether a game is a skill game or a controlled skill game, with the latter warranting an ad-hoc licence, through rulings or other binding instruments. The Regulations also classify ‘other games’ under Part VIII of the Gaming Authorisation Regulations, laying down a softer regulatory approach in view of the intervention deemed necessary.

WHAT IS THE COMPLIANCE CONTRIBUTION?

A compliance contribution is payable on qualifying activities consisting of Type 1, Type 2, Type 3 and Type 4.

This shall be determined by the gaming revenue generated during the licence period depending on the type of gaming services approved.

The applicable compliance contribution can be found in the Gaming Licence Fees Regulations, which may be found on the Authority’s website here.

WHAT IS THE GAMING TAX AND WHEN IS IT DUE?

Gaming tax due in terms of the Gaming Tax Regulations is based on the gaming revenue, as defined, generated by the operators from end customers located in Malta.

The gaming tax shall be payable monthly, together with the submission of regulatory returns containing the relevant data to calculate said tax.

Further information is clearly stated under the Gaming Tax Regulations, which may be found on the Authority’s website here.

HOW LONG DOES ONE HAVE TO GO-LIVE AFTER GETTING THE LICENCE?

Licence fees, compliance contribution and gaming tax are due from issuance of the Licence. The

Licensee shall be required to submit the Declaration of Go-Live once the licensee starts operation.

WHAT QUALIFIES FOR START UP STATUS?

A ‘start-up’ undertaking shall mean a person who, at the date of the licence application, fulfils all of the following criteria:

a. A person has been established or operational in the same or a related sector for less than five (5) years;
Provided that, unless the business is operated in a different form, ‘established’ shall refer to the date of registration of a limited liability company, the date of the agreement establishing a partnership, the date of registration as a self-employed person, or as may otherwise be determined by the Authority.

b. In the case of a body corporate, that person has not yet distributed profits;

c. In the case of a body corporate, that person has not been formed through a merger or, if formed through a merger, all body corporates that formed part of the merger satisfy, in aggregate all the critical envisaged herein;

d. That person has not acquired the business as a going concern or, if so, the acquirer and the acquired both satisfied all criteria envisaged herein;

e. That person has generated actual revenue from the same, or a related, sector during the previous financial period amounting to less than ten million euro (€10,000,000):
Provided that where the financial period cannot be determined, or is not applicable, the previous twelve (12) calendar months shall be taken into consideration;

f. That person is not part of, or controlled by, a corporate group whose actual revenue in the same, or a related sector exceeds ten million euro (€10,000,000); and

g. That person is not subject to the requirement of a Government concession to offer the gaming service in accordance with the proviso to regulation 4 of the Gaming Authorisations Regulations:
Provided that in the case of a body corporate, if the person referred to in this sub-regulation has taken over the business from any person having a qualifying interest in the former, the provisions of this sub-regulation shall extend accordingly to the person having a qualifying interest in the applicant: Provided further that actual revenue referred to in paragraphs € and (f) shall be determined on the basis of generally accepted accounting principles and practice as defined in article 2(4) of the Compliance Act.

A person shall be deemed to be a start-up undertaking only upon the Authority’s confirmation, and the Authority shall be vested with discretion to determine whether a person is a start-up undertaking in terms of set regulations. Provided that the onus to prove that a person is indeed a start-up undertaking shall be vested in the same applicant.

IS A START-UP REQUIRED TO PAY COMPLIANCE CONTRIBUTION?

Approved Start-ups will benefit from a moratorium period of 12 months in which they are exempt from paying compliance contribution although they are still required to submit the monthly declaration. Fixed license fees will still be due

WHAT ARE KEY FUNCTIONS?

By definition, the term “key function” means an important function, role or task carried out by a person in connection with a gaming service or a gaming supply, as may be prescribed by the Authorisations and Compliance Directive.

WHAT ARE KEY FUNCTION ROLES?

Key functions are important functions within a licensed activity, requiring approval, for direct scrutiny and targeted supervisory controls, thereby raising the bar for persons of responsibility within a gaming operation.

The following roles and responsibilities performed in connection with the gaming activity of a licensee shall each constitute a key function:

1. The Chief Executive role, or equivalent;
2. Management of the day-to-day gaming operations of the licensee, including the processes of making payments to, and receiving payments from, players;
3. Compliance with the licensee’s obligations emanating from the licence or licences issued by the Authority;
4. The administrative and financial strategies of the licensee, including but not limited to the payment of tax and fees due to the Authority;
5. Marketing and advertising, including bonus offers and promotions;
6. The legal affairs of the licensee, including but not limited to contractual arrangements and dispute resolution;
7. Player support;
8. Responsible gaming;
9. The prevention of fraud to the detriment of the licensee;
10. The risk management strategies of the licensee;
11. The prevention of money laundering and the financing of terrorism;
12. Adherence to applicable legislation relating to data protection and privacy;
13. The technological affairs of the licensee, including but not limited to the management of the back-end and control system holding essential regulatory data;
14. The network and information security of the licensee; and
15. Internal audit.

For a B2C licensee that operates a gaming premises which is not a controlled gaming premises, the key functions shall be the following:

• Those listed in points (a) to (i) above, hereof;
• Operation of the urn or any other gaming device which requires human intervention used to generate the result of the game in bingo halls:

Provided that where the operation of such urn or other device is supervised by an additional person who is not an officer of the Authority, it shall be sufficient for either the person operating the urn or other device or the person supervising to be approved to provide such key function;

• Management of the pit, including the supervision of the croupiers and assistants and the management of their work, where applicable;
• Management of the gaming area, including the supervision thereof to preclude fraud by customers, and the resolution of customer disputes; and
• Management of the surveillance systems of the gaming premises, where applicable.

For a B2B licensee, the key functions shall be the following:

• The chief executive role, or equivalent;
• The day-to-day gaming operations of the licensee;
• Compliance with the licensee’s obligations emanating from the licence or licences issued by the Authority;
• The administrative, financial and risk management strategies of the licensee, including but not limited to the payment of fees due to the Authority;
• The legal affairs of the licensee, including but not limited to contractual arrangements and dispute resolution;
• Adherence to applicable legislation relating to data protection and privacy, where applicable;
• The technological affairs of the licensee, including but not limited to the management of the back-end and control system holding essential regulatory data;
• The network and information security of the licensee; and
• Internal audit.

For the National Lottery licensee, the persons performing key functions shall be the following:

• The persons performing the functions listed in points (a) to (i) above (1) hereof; and
• The persons who hold a permit to sell national lottery games.

In the case of a licensee providing a gaming service in gaming premises, the activities constituting a key function shall also comprise of the following:

• Responsibility for supervising the croupiers and assistants and managing their work;
• Responsibility for managing the casino’s gaming area, including the supervision thereof to preclude fraud by customers, and the resolution of customer disputes; and
• Responsibility for managing the surveillance systems of the casino.

WHAT ARE THE LIMITS ON ADVERTISING?

Commercial communications must not:

•  Condone or encourage behaviour which is criminally or socially irresponsible;
•  Portray gaming as a means of resolving problems;
•  Suggest that gaming is an alternative to employment.

Gaming adverts cannot make reference to easily available means of credit, and cannot tarnish the image of any other licensee.

WHAT IS REQUIRED WHEN ADVERTISING?

• Adverts must ensure that the limits in advertising must be adhered to.
• Adverts must display the licensee’s name and licence number
• Adverts displayed on social media must also be compliant with the Regulations.

WHAT ARE THE RESPONSABILITIES OF LICENSEES WITH THIRD-PARTY ADVERTISING?

With respect to arrangements made for the marketing and advertising of a gaming service, the Authority considers that when the service of the outsourcing service provider is limited solely to such activities, the regulatory risk is limited to matters relating to adherence to advertising laws. Given that the responsibility for compliance with such laws rests with the licensee, the Malta Gaming Authority considers that there is no scope for additional involvement as a regulator.

On the other hand, where the outsourcing service provider also conducts other activities related to the gaming service, intervention may be necessary. Where the outsourcing service provider processes payments and handles player registration, the service provider shall itself be deemed to require a B2C licence, unless such services are being carried out solely on behalf of the licensee, in which case they shall be deemed to be covered within the remit of the licensee’s authorisation. The service provider would, in the latter case, require approval of the service as a material supply.

WHAT ARE THE DIFFERENT TYPES OF GAMES THAT ARE LICENSIBLE BY THE AUTHORITY?

A gaming service or a critical gaming supply shall constitute any one or more of the following game types:

• Type 1: which shall mean games of chance played against the house, the outcome of which is determined by a random generator, and shall include casino type games, including roulette, blackjack, baccarat, poker played against the house, lotteries, secondary lotteries and virtual sports games; and/or
• Type 2: which shall mean games of chance played against the house, the outcome of which is not generated randomly, but is determined by the result of an event or competition extraneous to a game of chance, and whereby the operator manages his or her own risk by managing the odds offered to the player; and/or
• Type 3: which shall mean games of chance not played against the house and wherein the operator is not exposed to gaming risk, but generates revenue by taking a commission or other charge based on the stakes or the prize, and shall include player versus player games such as poker, bingo, betting exchange, and other commission based games; and or
• Type 4: which shall refer to controlled skill games as per regulation 8 of the Gaming Authorisations Regulations.

In the case of a game displaying elements which may fall under more than one of the types referred to above, the Authority shall have full discretion in categorising the game in the type it believes closest reflects the nature of the game.

IS A SEPARATE LICENCE REQUIRED FOR EACH TYPE OF GAME?

No, the Authority does not require licensees to obtain a licence for each type of game. Operators that are already in possession of a Gaming Service Licence or Critical Gaming Supply Licence, and wish to offer an additional type of game are required to apply for the necessary approval.

WHAT IS A VERTICAL?

By definition the terms “gaming vertical” means a category of products that require specific safeguards in order to ensure that it is offered in a manner which adheres to law and to the regulatory objectives, owing to its characteristics and the distinction between it and other categories of products. For the sake of clarity, the different verticals include:

a. Casino, including live casino;
b. Lotteries;
c. Secondary lotteries;
d. Fixed odds betting, including live betting;
e. Pool betting, including betting exchange;
f. Peer-to-peer poker;
g. Peer-to-peer bingo and other peer-to-peer games, but excluding pool betting, betting exchange, and poker;
h. Lottery messenger services;
i. Controlled skill games; and
j. Any other gaming vertical which is not comprised within the above.

WHAT IS THE MINIMUM ISSUED PAID UP SHARE CAPITAL REQUIRED BY THE AUTHORITY?

The Authority requires a company applying for a licence to have the following minimum issued paid up share capital when registering the company with the competent authority:

Gaming Service Licence

• Type 1 – Minimum €100,000
• Type 2 – Minimum €100,000
• Type 3 – Minimum €40,000
• Type 4 – Minimum €40,000

Critical Gaming Supply Licence

• Minimum €40,000

Companies with multiple type approvals are required to meet the above share capital requirements cumulatively up to a minimum capping of €240,000.

DOES FANTACY SPORTS REQUIRE AN ADDITIONAL LICENCE?

No, Fantasy Sports does not require an additional licence. A Type 4 approval is required to offer fantasy sports as a gaming service or critical gaming supply.

WHAT IS MATERIAL SUPPLY?

“Material Supply” or “Material Gaming Supply” means a gaming supply of such importance that any weakness or failure in its provisions could have a significant impact on the operator’s;

• To meet the obligations under the applicable legislation: or,
• To manage risk related to such supply; or
• To continue in business

The following types of gaming supplies shall constitute material gaming supplies:

1. Manufacturing, assembling, placing on the market, distributing, supplying, selling, leasing or transferring a gaming device;
2. Providing risk management services for the operation of a licensable game;
3. Providing event, content and, or odds;
4. Providing fraud management services for the operation of a licensable game;
5. Holding and, or managing player funds;
6. Providing services relating to customer due diligence;
7. Providing services related to player identity verification;
8. Providing co-location services and other managed information technology services, including            cloud computing services and, or decentralised hosting protocols where the latter do not amount      to a critical gaming supply; and
9. Providing back-up and disaster recovery services.

WHAT IS A RECOGNITION NOTICE?

A notice issued by the Authority whereby an authorisation issued by another Member State of the European Union or European Economic Area, or a State which is deemed by the Authority to offer safeguards largely equivalent to those offered by Maltese law, is recognised as having the same effect as an authorisation issued by the Authority for the purpose of providing a gaming service, gaming supply in or from Malta.

WHAT TYPES OF SERVICES CAN BE OUTSOURCED?

The Authority is conscious of the fact that outsourcing is integral to the operational setup of most gaming business nowadays, whether for advantages of cost or specialisation or for any other reason which the operator may deem relevant. The type of supplies considered to be supplementary to the activity being licensed refer to:

1. Manufacturing, assembling, placing on the market, distributing, supplying, selling,

    leasing or transferring a gaming device;
2. Providing risk management services for the operation of a licensable game;
3. Providing event and odds management systems, including content provision for betting;
4. Providing fraud management services for the operation of a licensable game;
5. Holding or managing player funds;
6. Providing services relating to customer due diligence;
7. Providing services related to player identity verification;
8. Providing co-location services and other managed information technology services; and
9. Providing back-up and disaster recovery services.

WHAT IS THE PROCESS THAT A LICENSEE SHALL MAKE READILY AVAILABLE TO PLAYERS THAT WISH TO SUBMIT A COMPLAINT?

Authorised persons offering a gaming service shall make readily available to players the applicable procedure for making a complaint to the authorised person.

a. Authorised persons offering a gaming service shall, upon receipt of a complaint made by a player who makes or has made use of their gaming service, immediately inquire into the complaint;

b. Authorised persons shall inform the complainant of the results of such inquiry within ten days from the date on which the complaint is received: Provided that where the nature of the inquiry is such that more time is necessary to complete it, such period may be extended by a further ten days: Provided further that where such extension is necessary, the player shall be informed within the first ten days from the date of receipt of the complaint that the authorised person shall be making use of such extension, and the reason or reasons why such extension is warranted.

WHAT IS THE PROCESS TO SUBMIT A PLAYER COMPLAINT TO THE AUTHORITY OR AN OTHER ENTITY?

Where a player feels aggrieved by a decision or other action of the authorised person, he/she shall be able to make a complaint to the authorised person and, in the event that he/she is not satisfied by the response of the authorised person, the player may (with the handed procedure by the authorised person) refer such complaint and all relevant facts to the Authority’s Player Support Unit or to another ADR entity.

HOW ARE PLAYER FUNDS PROTECTED?

The sub-section ‘Protection of Player Funds’ is clearly stated under the Gaming Player Protection Regulations.

Identifying the importance of player funds being kept segregated and remaining separately identifiable at all times whereby the Authority may, in its sole discretion, exercise viewing rights over the common account of player funds.

CAN A LICENSEE SHARE A WEBSITE AND/OR WALLET WITH LICENSEES FROM ANOTHER JURISDICTION?

Games, and/or their providers, which are not licensed by the MGA or a competent authority within the EU/EEA, but licensed and offered under the purview of other jurisdictions outside the EU/EEA, on the shared wallet setups with such non-EU/EEA licensed games, whether offered on the same or different domain or sub-domain name, are also be prohibited

HOW CAB A LICENSEES EFFECT CHANGES TO THEIR KEY TECHNICAL INFRASTRUCTURE?

Key Technical Setup is the technical infrastructure of licensee, including all hardware and virtual machines in operation where the essential components are located.

The Authority has made available the necessary procedures through its Licensee Relationship Management System (LRMS). Applicants may process necessary to their key technical infrastructure changes in-line with the legal framework and set directive, through the LRMS and follow the processes. The LRMS provides a dedicated dashboard that will give users the possibility to follow the status of their requests in real-time, ensuring efficiency and transparency.

WHAT ARE THE ESSENTIAL COMPONENTS?

Essential components are the:

• Components hosting RNG;
• Components hosting jackpots;
• Components hosting the games;
• Gaming database;
• Player database;
• Financial database;
• Control system; and
• Any other component which the Authority may deem to be critical.

DOES THE AUTHORITY LICENSE FINANCIAL MARKETS’ SPREAD BETTING?

No, the Authority does not license such activities.

WHERE SHOULD THE GAME RULES FOR ONLINE GAMES BE DISPLAYED?

As a minimum, the entire set of the rules, including the manner in which a player can win or lose a game, must be no further than one click away from the page in which the game can be played. Upon that one click, a player must be immediately presented with the rules. However, the rules may be categorised further within this window, possibly requiring further clicks due to limitation of space, but they shall always remain easily accessible and easy to understand.

With respect to games which are played after being downloaded and installed on a compatible device, licensees shall ensure that the game rules shall be made present to the player in any case prior to the player’s first wager on the game.

DOES THE AUTHORITY CHARGE ANY FEES TO OPERATORS WHO WISH TO HOLD A MEETING WITH THE AUTHORITY?

No, the Authority does not charge any fees for meetings held with applicants, licensees or service providers.