The Malta Independent 20 August 2019, Tuesday

MGA publishes White Paper proposing major reforms to Malta’s gaming legal framework

Kevin Schembri Orland Wednesday, 12 July 2017, 11:22 Last update: about 3 years ago

The Malta Gaming Authority has published a White Paper proposing major reforms to Malta’s gaming legal framework, which is open for public consultation for around five weeks.

The reforms would see existing legislation repealed and replaced by a singl primary Act called the Gaming Act. Both Parliamentary Secretary for Financial Services Silvio Schembri and Executive Chairman of the MGA, Joseph Cuschieri presented the White Paper.

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The changes would include replacing the current multi-licence system with  system in which there will be two different types of licenses – a Business-to-consumer (B2C)  licence and a business-to-business licence (B2B) – covering different types of activities across multiple distribution channels.

Currently, some operators would, for example, have 13 different lincenses offering different products, like sports betting, online poker etc. this, Cuschieri said, creates a lot of bureaucracy. So now there will be two licenses, B2C offering services to players, and B2B for companies offering services or platforms to other companies.

The legislation would exempt B2B licensees from gaming tax.

The new law would also, according to the MGA, broaden the regulatory scope to increase MGA oversight. It would also widen the MGA’s powers under the compliance and enforcement functions to better achieve regulatory objectives, in line with concurrent developments on anti-money laundering and funding of terrorism obligations.

The proposed law would strengthen the player protection framework by formalising the mediatory role of the MGA’s player support unit.

It would introduce 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

The law would introduce 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.The White Paper reads: “the possibility for the Authority to nominate an administrator is being introduced to cater for certain exceptional circumstances which warrant such intervention by an independent third-party outside of the operational sphere of the licensee, whether to safeguard employees, players, creditors or otherwise to ensure that public interest prevails. This nomination is to be confirmed by the Civil Court (Voluntary Jurisdiction Section) to ensure oversight of the judiciary on such an important process. Drawing from the Authority’s experience, it is preferable to have an independent administrator appointed to handle the assets of the licensed entity as well as to undertake such other functions as may be required. It is a concept which is used in the financial services sector, and is thus being extended to gaming.”

The MGA states that introducing such  law would also bolster 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.

Cuschieri said that numerous studies and consultation with stakeholders were conducted to ensure that the new legislation is future proof and addresses the challenges facing the industry.

Parliamentary Secretary for Financial Services Silvio Schembri, who was visiting the MGA offices at Smart City, said that the consultation process launched today with this White Paper is part of government’s electoral manifesto. “The new legal framework must be dynamic and future proof to allow for the use of cryptocurrency in the remote gaming sector within the coming months. We must act fast to remain at the forefront of worldwide gaming jurisdictions guaranteeing a secure hub for this industry and an efficient infrastructure that gives confidence to gaming companies setting up their operation on our shores. It is imperative that this reform leads to new policies that encourage further innovation and development within the sector.

MGA representatives also said that the authority had commissioned a study on cryptocurrencies in order to assist in the development of a proper framework governing the use of cryptocurrencies in the remote gaming sector.

The White Paper can be viewed online here: http://www.mga.org.mt/malta-gaming-authority-publishes-white-paper-proposing-major-reforms-maltas-gaming-legal-framework/

Photos by Domenic Aquilina

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