The currently applicable Remote Gaming Regulations (‘Regulations’) have been in force since 2004. Every legislative instrument is tested by time and, in such a dynamic area as remote gaming, it is inevitable that some amendments and adjustments are necessary over time. Given this fact, it is even more satisfying that the Regulations have proven to be remarkably resilient and reliable. In my view, this is mainly due to three aspects of the Regulations.

Firstly, the Regulations are both technology-neutral and game-neutral, thus allowing for any new games, new technologies and new inventions to ‘fit’ into the regulatory regime without the need to change the laws.

Secondly, the Regulations (and the Lotteries and Other Games Act – the primary legislation under which the Regulations were promulgated) have allowed wide discretion to the Lotteries and Gaming Authority for adaptation, implementation of policies and procedures (within the remit of the law, of course), so that in practice, while the Regulations have not been amended, the regulatory regime as a whole has been continuously developing and adapting to the realities of the business and emerging regulatory concerns. Thus, the main principles enshrined in the law – keeping remote gaming business free from crime, protecting the players (both with respect to protection of players’ funds, as well protection of minors and vulnerable), ensuring that the remote gaming operations are transparent and auditable, that procedures used are in line with best practices and legislation relating to processing of financial transactions, information security, anti-money laundering, personal data protection; – are all implemented and are being refined and further developed on the basis of LGA’s policies and the requirement for the remote gaming licensees to be in line not only with gaming-related laws but also with all other applicable to their activities laws.

A closer examination of every cornerstone of Malta regulatory regime as a whole reveals its serious, responsible approach that safeguards the rights of the players, while also safeguarding the operators’ interests and reputation. Let us look at just one such cornerstone – player protection features.

The regulatory regime requires that all licensed operators display at all times a warning of the addiction of gaming, provide links to websites which assist compulsive gamblers and do not provide (or stop providing) services to persons who have gambling addition problem. Furthermore, a licensed operator should provide to players the possibility to limit the amount of wager placed within a specified period of time, the amount of losses which may be incurred within a specified period of time, the amount of time the player may play in any one session, and the possibility to self-exclude him/herself for a definite or indefinite period of time. A licensed operator is also required to notify a registered player by means of a reality check popup every hour, to remind the player of the time spent playing, the amount lost and won, and provide the payer with the possibility to terminate the session.

Furthermore, a licensed operator is prohibited from providing its services to persons who have not attained the legal age of majority.

With regard to protection of players’ funds, the Regulations require licensed operators to have a separate bank account for the players’ funds segregated from the licensee’s operational funds. A licensed operator is in fact prohibited from dealing with players’ funds.

Naturally, it is not enough to promulgate laws or to introduce policies. It is as important to ensure that these laws and policies are complied with by the regulated bodies. And here comes the third aspect of the Regulations (and the Act) that has contributed to the success and time-resilience of Malta’s remote gaming regulatory regime – Regulations give the power to the LGA to effectively monitor, both on continuous and ad hoc basis, licensees’ compliance with the Regulations, which power is backed up by the LGA’s competence to take action, including the imposition of fines, physical blocking of the operation, and suspension of the licence in serious cases.  For example, with regard to keeping players’ funds, the LGA checks the amount of players’ funds actually kept by the licensee against the licensee’s total liability to players on a monthly basis.

While the above and other requirements put more onerous obligations on licensees comparing with some other jurisdictions, the licensees nevertheless benefit, since as a result they are considered more serious and trustworthy by their players and, therefore, distinguish themselves from other less regulated and less credible operators, thus winning more business.

Yet another aspect of Malta’s regulatory regime making it standing out from many others regimes: its non-discriminatory nature. Unlike in many other jurisdictions, Malta-licensed operators can utilise their licence to offer their services both in foreign jurisdictions (subject to the laws in those jurisdictions), as well as in Malta. Moreover, as far as offering of remote gaming services to Malta residents is concerned, the Maltese regulatory regime does not discriminate against operators licensed in other EU/EEA states: such operators can offer their remote gaming services to Malta residents without the need of a Malta licence.

Of course, there is always room for improvement. Removing the requirement for a licensee to be an entity and equipment to be based in Malta and allowing them to be based in any country of the EU/EEA would, in my view, remove the last discriminatory element of the Regulations. Clearly specifying the ability of Class 4 licensees to host EU/EEA-based operators would also work in this direction. I would also further strengthen the protection of players’ funds in situations when the operator’s financial standing is not satisfactory. Fortunately, due to the above-mentioned three aspects of the Regulations, many of the improvements would not require amendments to the laws and, hopefully, will develop though the LGA policies.


Olga Finkel(olga.finkel@whpartners.eu)

First Published in:

LGA(Lotteries and Gaming Authority) Remote Gaming Update 2010