Implementing the Controlled Skill Games Regulations

MEDIA ROOM

The Controlled Skill Games Regulations issued recently by virtue of S.L. 438.11 have been implemented by the Malta Gaming Authority (MGA). This was done through the issuance of the first Controlled Skill Game licence.

The first licensee has marked it’s achievement by showing its intention to launch its activity in the German market. This is all possible according to European Union (EU) rules. Once a gaming provider is licenced in one EU member state, such licence would apply to any other country in the EU, on the basis that there are no stricter regulations applicable in the country the licensee is seeking to set up in. A Malta license allows a company to operate in multiple EU member states with the exception of a few countries that have stricter rules for daily fantasy sports, like England, France, Belgium and Spain.

Through the enactment of the abovementioned regulations, the MGA adopts a distinction between games of chance and games of skill. Games of skill are games the outcome of which depends mainly on the mental or physical skill of the player.  A game of skill is defined in the current legislation as a game that is ‘determined by the use of skill alone or predominantly by the use of skill and is operated as an economic activity.’ Following the recent amendments, the provision of such a game of skill requires novel licensing requirements.

Through this newly introduced Controlled Skill Games Licence, the MGA attempts to regulate more efficiently the sector in relation to games of skill. Safeguards range from consumer protection to fairness and criminality.

Prior to the introduction of the new Controlled Skill Games Licence all games, irrespective of whether being games of skill or games of chance, were regulated and licenced under the same requirements emanating from the Remote Gaming Regulations. No distinction was made between the different genres of games provided. The MGA saw the need to distinguish between the different genres of games being provided, with this being one of the main triggers for the establishment of the Controlled Skill Games Licence.

The authority considers games based solely on skill as not needing equivalent licensing requirements to games based on chance. It is considered that players involved in games of skill are less at risk of being taken advantage of than other players of different genres. However, although the authority has, to some extent, applied, ‘less’ stringent licensing requirements for games of skill, providers of games of skill must nonetheless meet a number of standards and requirements set out  in order to obtain such newly introduced licence. The awarding of this licence still entrusts the MGA with monitoring of the gaming environment. This in turn can be interpreted as a safeguard for players participating in games of skill.

The requirements set out by the authority in relation to the provision of games of skill include;

  1. Operator must be a body corporate established in Malta or any EU/EEA state.
  2. Have a minimum of paid-up share capital of forty thousand Euro.
  3. Have a specifically appointed Key Official, MLRO and an Information Security Officer.
  4. Have segregated operational funds from players’ funds.
  5. All regulatory data must be accessible to the Authorities.
  6. Be in possession of a licence to offer skill games.

One may conclude that this new regulatory framework attempts to clarify the particular definition of games of skill, while adopting specific licensing requirements which are suitable and necessary for the provision of such types of games.