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Issue of the Skill Games Regulations

The Minister for Competitiveness and Digital, Maritime and Services Economy, in consultation with the Malta Gaming Authority (MGA), has recently issued the Skill Games Regulations through Legal Notice 31 of 2017. These apply to all skill games organised in Malta, provided from Malta or promoted or offered to persons in Malta.

The aim of the regulations is to ensure:

(a) that skill games are subject to risk-based regulatory intervention, where this is necessary in the public interest, and that this is done proportionately, consistently and in a non-discriminatory manner;

(b) that skill games are conducted in a fair and transparent manner and that the sector is kept free from crime;

(c)  the interests of all consumers are adequately safeguarded and proper controls are in place to protect minors and other vulnerable persons.

The term “skill game” is defined as ‘a game for money or money’s worth and through means of distance communication, the result of which is determined by the use of skill alone or predominantly by the use of skill and is operated as an economic activity, but does not include a sport event’.

The MGA considers the following criteria to determine whether a game is a skill game or a controlled skill game:

(a)  the presence of random draws and their effect on the outcome;

(b)  whether the game is played for money and, or prizes with a monetary value;

(c)  whether participation in a game involves any form of monetary commitment, or commitment of a monetary value;

(d)  the possibility of any negative social impact of the game;

(e)  whether the activity is closely associated with games of chance and/or gambling;

(f)  the duration of each event, competition or match;

(g)  whether, on the face of it, a skilled player is able to win more than an unskilled player;

(h)  whether a player’s chance of winning is significantly increased by experience in playing the game;

(i)  whether skill can be acquired through training, experience, reading literature or other educational material;

(j)  whether a rule-set or format that is used further nullifies the effect of any element of chance;

(k)  whether the game is played against other human players, or otherwise;

(l)  the level of interaction between the players, the level of interaction between the operator and the players, and the level of intervention by the operator during the event, competition or match; and

(m) the complexity of the game, including the amount of player choices and their potential effect on the outcome, and the strategies involved.

Licensing Process

For a controlled skill game to be organised in, or provided from Malta, and to be offered, made available or promoted to any person in Malta, it must be licensed and compliant with the Regulations, unless it qualifies for an exemption. Alternatively it may be offered under an equivalent authorisation issued by the government or a competent authority of another EU or EEA State.

The Authority may issue licences to offer a controlled skill games service, or to offer a controlled skill games supply. This shall be valid for a period of five (5) years, subject to renewal for further 5-year terms.

Licence Fees

Where the applicant already holds a Class 3 licence, or a corresponding Class 4 licence, they are not required to meet duplicate administrative requirements if these have already been satisfied. In this case the applicant would also be exempt from the annual licence fee under the Regulations.

In all other cases, applicants are required to pay a non-refundable application or renewal fee of €2,300, and an annual licence fee of €8,500.

Taxation

Providers of controlled skill games service organised in, or provided from Malta, or providing a controlled skill games service to any person in Malta shall pay to the MGA, on behalf of the Government, 5% tax on real income. Real income is considered to be total wagers less total monies paid out to players. The tax due is payable monthly, and by not later than the twentieth (20th) day of the following month. The maximum tax payable annually by a single controlled skill game operator is of €466,000.

For more information or if you have any questions on Gaming Services in Malta, please feel free to contact Dr Ian Gauci on igauci@gtgadvocates.com

Disclaimer: This article is not intended to impart advice and readers are asked to seek verification of statements made before acting on them.