Malta to Streamline Online-Gambling Regulations

Online-gambling hub Malta is moving ahead with plans to modernize and streamline its framework of laws pertaining to both online gambling and gambling in general, with a new bill, called simply the Malta Gaming Act, already being positioned for its initial reading before the country’s Parliament.

The announcement regarding this overhaul of Maltese gaming law came from Malta’s Parliamentary Secretary for Financial Services, Digital Economy & Innovation, Hon. Silvio Schembri. At a press conference called by the country’s regulatory body, the Malta Gaming Authority, Schembri announced plans for the new bill. All existing Maltese gaming law is set to be repealed by the country, to be immediately be supplanted by the sweeping new regulations.

According to an MGA statement, the new framework “will strengthen the MGA’s compliance and enforcement functions to better achieve its regulatory objectives, in line with concurrent developments on anti-money laundering and funding of terrorism obligations.” The overhaul is also designed to empower the MGA “to be more agile in its decision-making, decreasing unnecessary regulatory burdens whilst strengthening supervision and focusing the regulator’s efforts on the areas which present a higher risk profile.”

The MGA has been bruised in the past over its historically close relationships with certain elements of nearby Italy’s powerful organized-crime families, though Malta and the MGA have made significant forward strides over the past several years, cracking down on several Italian Mob operations. Malta’s continuing tightening of its legal framework and its forward-looking plans with technologies such as blockchain implementation are helping to advance its goal of being one of Europe’s — and the world’s — online-gaming hubs.

Joseph Cuschieri, the soon-to-depart Executive Chairman of the Malta Gaming Authority (MGA).

As for the new legal framework, its other important areas of focus include “consumer protection standards, responsible gaming measures, [and the] reporting of suspicious sports betting transactions in the fight against the manipulation of sports competitions and objective-orientated standards to encourage innovation and development.” Yeah, that last one’s a mouthful, good intentions notwithstanding.

According to the MGA, the key highlights of the new Gaming Act include:

  • Replacing the current multi-licence system with a system in which there will be two different types of licences – a Business-to-Consumer (B2C) licence and a Business-to-Business (B2B) licence – covering different types of activities across multiple distribution channels;
  • Moving towards an objective-based rather than excessively prescriptive regulatory approach, to allow for innovation whilst ensuring that the regulatory objectives are attained;
  • Broadening the regulatory scope to increase MGA oversight and allow for intervention where necessary and in a proportionate manner;
  • Widening the MGA’s powers under the compliance and enforcement functions to better achieve the regulatory objectives, in line with concurrent developments on anti-money laundering and funding of terrorism obligations;
  • Segmenting the Key Official role into various key 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;
  • Strengthening the player protection framework by formalising the mediatory role of the MGA’s Player Support Unit, enshrining segregation of player funds at law and moving towards a unified self-exclusion database across both remote and land-based delivery channels;
  • Introducing new and more effective processes for criminal and administrative justice, including the allocation of appeals from decisions of the Authority to the Administrative Review Tribunal and the introduction of a distinction between administrative and criminal offences;
  • Introducing the concept of administration to protect an operation in distress and, if necessary, to assist the winding down of an operation, thereby protecting jobs and player funds;
  • Moving towards automated reporting, facilitating adherence to regulatory obligations and strengthening the Authority’s oversight;
  • Bolstering the Authority’s role in the fight against manipulation of sports competitions by introducing new obligations on operators to monitor sports betting and report suspicious bets, in line with the efforts being made by the National Anti-Corruption Task Force in which the Authority also actively participates;
  • Exempting B2B licensees from gaming tax, thus increasing Malta’s competitiveness as a hub for B2B activities.

Schembri addressed the MGA’s press-conference attendees, stating, “This Bill marks a major step in streamlining and encompassing the governance of all gaming services offered in and from Malta and across all channels under the competence of the MGA. The Government wants to ensure that the gaming industry continues to be run responsibly, fairly and free from criminal activity, so that the Maltese jurisdiction provides a safe and well regulated environment where the industry can also develop and innovate.”

Added Schembri, “We hope to remove any red tape by increasing efficiency and flexibility for the Regulator, whilst improving the robustness of the current framework and focusing regulation on outcomes.”

Also speaking was the MGA’s Executive Chairman Joseph Cuschieri, who sounded the consumer-protection note. Said Cuschieri, “This is an important milestone and we welcome this major step forward by the Maltese Government. This Bill contains draft proposals which aim to bridge the regulatory gap between various gaming verticals and channels, including new technologies serving as a platform to future proof gaming regulation, whilst ensuring that consumers enjoy a consistent level of protection.”

Cuschieri, in fact, will soon be leaving his role at the MGA. But he won’t be straying too far; he’ll become the CEO of the Malta Financial Services Authority, a role which the Maltese government is still defining, and he’ll be working arm-in-arm with his former counterparts at the MGA.

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