Skill Games Regulations & Fantasy Sports Ruling

The Skill Games Regulations (S.L. 438.11) are now in force following publication in the Government Gazette on the 24th of January 2017. In terms of these new regulations, the Authority is entrusted with the governance and regulation over the skill games sector, as originally envisaged under article 78 of the Lotteries and Other Games Act (Chapter 438 of the Laws of Malta).

The publication of these regulations follows a public consultation that was carried out in 2015. The Authority collected and analysed the feedback received, and met with industry stakeholders, and a position paper was published in December 2015, laying down the Authority’s roadmap for the regulation of this sector. The legislative process was undertaken in 2016, which included notification to the European Commission in terms of the process laid down by Directive 2015/1535.

In terms of the Skill Games Regulations, the Authority is empowered to regulate the sector in terms of a number of public policy objectives listed down in regulation 3, including consumer protection, fairness of the game, and the prevention of criminality.

Furthermore, skill games which, in the opinion of the Authority, should be subject to additional regulatory supervision because of any additional risk they may pose to consumers, may, by virtue of a public ruling issued by the Authority in terms of regulation 6, be deemed ‘controlled skill games’, and thus become subject to the requirement of a licence, and the rest of the obligations envisaged in the regulations.

In view of the above, the Authority is hereby exercising this power to deem fantasy sports as controlled skill games. The ruling on fantasy sports, and the parameters thereof, are attached. The effects of this ruling, together with the repealing of the Fantasy Sports (Exemption) Regulations (S.L. 438.10), are that such fantasy sports operators are required to acquire a controlled skill games licence from the Authority.

A controlled skill games licence may be a licence to provide a service for the purposes of engaging with end consumers, or a licence to provide a supply, that is, in a business-to-business capacity. The licence is valid for five years, and is subject to a number of requirements, including a procedure to ensure that the persons behind the business are fit and proper, financial and system auditing to ensure that the operation is fair, sound and secure, and other measures to prevent fraud and money-laundering, a consumer-centric approach to the business, a high level of information security and segregation of player funds. Licence holders are also subject to administrative fees, licence fees, and a 5% tax over gaming revenue. A three-month transitory period is in effect.

Stakeholders are invited to access the Skill Games page on the Authority’s website for further resources on this new framework, and to contact the Authority for further assistance.

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