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Legal Focus
JANUARY 2013
Online Gambling Law Malta
The recent detainment and release of Bwin.party co-chief executive Norbert Teufelberger by Belgian police highlights the discrepancies between European Union trade agreements and national laws enacted by some EU member states. To explore the issues surrounding gambling law further, Lawyer Monthly speaks to Dr Malcolm Falzon, Partner at leading Maltese law firm, Camilleri Preziosi.
can you give me an overview of the legalities of the online gambling industry in your country at the moment?
The online gambling industry in Malta is regulated by the Lotteries and Other Games Act and, more specifically, the Remote Gaming Regulations (the ‘RG Regulations’), originally introduced in 2004 and a first for Europe. The Lotteries and Gaming Authority (the ‘LGA’) is the single regulatory body responsible for the supervision of all gaming activities in Malta including but not limited to remote gaming.
Regulation 3 of the RG Regulations lays down the licensing requirement for any entity seeking to operate or promote or sell or abet remote gaming in or from Malta. Such licence need not necessarily be issued by the LGA but could potentially be an equivalent authorisation issued by the government or competent authority of an EEA Member State, or any other jurisdiction approved by the LGA. This expression of mutual recognition of licences highlights the drive to liberalise the gaming market and facilitate the gaming operations offered by foreign-based providers within the territory albeit to an extent limited by the fact that licensed operators must necessarily be a body corporate established in Malta in terms of domestic company law. The RG Regulations were amended by Legal Notice 90 of 2011, which introduced, inter alia, an important proviso to Regulation 3 empowering the LGA to impose proportionate requirements and conditions, which comply with EU law, as it may deem necessary. All licences are issued for a five-year period and are renewable subject to continuous compliance by the licensee with the relevant regulations and directives issued by the LGA.
Players wishing to participate in an authorised game conducted by the licensee must necessarily be registered and licensees are bound
to maintain a secure online list of all registered players. Player protection is a top priority for the local regulator. The safeguarding of vulnerable player groups is given particular attention, with various measures in place including the blanket prohibition against registration of minors and an obligation to advertise remote gaming services responsibly.
The Second Schedule of the RG Regulations lays down the application and licence fees payable by online gaming operators.
In terms of the Fourth
Schedule to the RG Regulations, licensees are also subject to gaming tax, calculated depending on the license class held though subject to the maximum cap of €466,000 payable by one licensee in respect of any one remote gaming licence per annum.
although the global nature of the online market has created vast opportunities, it raises even more challenges for companies. What are the main challenges?
In my view the major obstacle faced by operators is the navigation of the heterogeneous and as yet unpredictable nature of the online gambling regulatory framework across Europe and indeed the rest of the world. This aspect is discussed in more detail in Question 7, but suffice to say at this stage that the uncertainty created by the current state of affairs, compounded with the cost and complexity of compliance with diverse jurisdiction-specific license application requirements, pose a key challenge to multinational operations.
A natural consequence of the globalisation of the market is increased competition both domestically and internationally. With competition comes the need to persistently innovate and diversify the product range on offer, which in an industry experiencing constant technological development entails investment in