Following a busy few months, SiGMA caught up with the Malta Gaming Authority‘s executive chairman, Joseph Cuschieri, to find out more about the developing landscape of gaming regulation and the authority’s position.
At the end of February, the Malta Gaming Authority (MGA) hosted a conference entitled “The Developing Landscape of Gaming Regulation. What Next?” with an emphasis on the key drivers of the future of gambling. Could you share some outcomes of the conference with us? How does the regulatory body see the future of online gaming?
Traditionally, not many regulators are usually present at these kind of events so, in this respect, the conference we organised was one of a kind in that the MGA welcomed no less than 24 fellow regulators which created the perfect opportunity for them to interact and exchange views with the several operators who also attended this event. Following a number of panels discussing regulatory issues, several workshops were held during the afternoon session dealing with various current topics affecting this constantlyevolving industry. The workshop format enabled inclusive and informal discussions among the various stakeholders which may now be taken to higher levels. A number of action points for the attention of regulators were identified. These discussions reflected the will of the various regulators to get a better understanding of the operations in the industry. While from a legal perspective, it is clear that almost all European regulators have adopted separated national regimes, it is also evident that anincreasing number of them are interested in learning more about the industry and implementing controls that are practical and relevant to it.
It seems like the MGA is looking into the possibility of regulating the use of cryptocurrencies in gaming. Recently, Prime Minister Joseph Muscat himself made bold remarks in favour of Europe leading the way in bitcoin: where are we? And is the MGA working closely with the Malta Financial Services Authority (MFSA) on this front?
The MGA is fully cognizant of the fact that the rise of cryptocurrencies is inevitable. Conscious of the need to remain at the forefront of innovation, the Authority has commissioned a study with the involvement of other local stakeholders, including the MFSA, to ensure that all the relevant factors are taken into consideration in devising the manner in which best to cater for the use of cryptocurrencies in gaming. Thus, so far the key risks presented thereby have been identified. The Authority is committed to permitting its licensees to introduce the use of cryptocurrencies in the immediate future once the above-mentioned study is concluded. The outcomes of this study are expected to assist the MGA in devising a commensurate framework which incorporates the necessary safeguards to ensure that the introduction of cryptocurrencies in the local gaming ecosystem does not prejudice primary regulatory objectives, such as the protection of players, the prevention of crime, and the reputation of the Maltese jurisdiction.
During the first semester of 2016, the gaming industry contributed 12% of the total economic value added generated in the Maltese economy with employment in the gaming industry rising by 31% year on year. Do you anticipate Fantasy Sports playing a significant role in sustaining this growth?
Fantasy Sports has been gathering significant interest over the past few years. However, it still remains to be seen whether the American phenomenon will be able to catch on in Europe. Suffice it to say that our recent initiatives in this sector have generated numerous queries and substantial interest.
The Skill Games Regulations came into force last January. Undoubtedly, this was a big step for the industry. What was the reason behind introducing this new set of Regulations?
This new framework has given us the ability to apply the right controls on new, emergent games in accordance with the risks they pose to consumers. After research into these evolving products, the MGA found that while the proliferation of certain online skill games offered for money may require regulatory intervention, the risks being presented were different to those being presented, for example, by online casinos. Different products present different risks to consumers and the creation of a framework that is more specific to skill games will allow us to look at these emerging games with a different lens.
How do you see the future of the Fantasy Sports niche in Malta and how do you think it will change in the light of the new Regulations? A set of criteria make Fantasy Sports a skill-based game, not a game of chance.
Now that we have designed a framework, that includes specific technical requirements for Fantasy Sports operators, I believe that more operators will be looking at Malta as their jurisdiction of primary establishment in view of the legal certainty now in place and a robust, consumer-centric framework. This framework will consolidate and increase Malta’s profile as a highly reputable jurisdiction when it comes to the regulation of gaming, with the licence itself being the golden standard of quality.
Some Daily Fantasy Sports (DFS) are more skill-based than others because their modes of assessment is more complex. Are there a number of criteria that a DFS needs to fulfill in order to qualify as a skill-based game?
First of all, the framework doesn’t only address Daily Fantasy Sports, but also addresses weekly or season-long fantasy games. The law itself lists the criteria against which the MGA needs to carry out an assessment. We look at the specifications of the game itself, how points are generated and assigned to players and any other game features. If we remain unconvinced that it is a skill-based game, we will ask the operator to present proof – the onus to prove that it is indeed a skill-based game rests with the operator.
The MGA has amended the Remote Gaming Regulations to strengthen consumer protection and promote administrative simplification. What were the most important changes you implemented? What did they mean for operators and players?
We are always trying to make things easier for operators who must be compliant with an increasing range of different laws. The industry has evolved significantly over the last few years and this has shifted the focus on empowering consumers, putting them at the centre of all regulation and ensuring they have the right tools to manage their participation in an evolving sector. The most recent changes to the law were instigated by these considerations and shall also serve as a basis for further change which is yet to come with the regulatory overhaul we are proposing to government this year. Having been in the regulation game for over ten years now, the MGA is cognizant of the shortcomings that must be addressed in order to keep Malta on the regulatory forefront, forever innovating and growing the sector while ensuring the pillars of gaming regulation are not jeopardised.
We know that the MGA continued working with the Financial Intelligence Analysis Unit (FIAU) on the implementation of the new 4th Anti Money Laundering Directive (AMLD), set to come into force this year. Could you shed some light on this cooperation and its results?
We can report very positive progress with regard to cooperation with the FIAU in recent months. All operators in the gaming industry will become ‘obliged entities’ under the new 4th AMLD and we have been working hard, together with the FIAU, to implement the Directive and publish clear guidelines on how the various sectors of the industry ought to assume their new obligations. Following informal consultation with the industry and a risk assessment, the MGA is now discussing particular aspects of the proposed implementation with the FIAU. Once a draft document is agreed to between the two entities, the industry will be consulted once again. The MGA, supported by the FIAU, is committed to implementing the new directive in a way which safeguards the industry from money laundering and the funding of terrorism while ensuring that the controls imposed are commensurate with the exigencies of the industry.
The Malta Gaming Authority participated in SiGMA16 and you took part in the Regulatory Conference. How did you find last year’s edition?
I believe SiGMA16 was a great event! A number of high profile speakers and industry experts participated, and the topics tackled during the different discussion panels were very relevant and engaging. The presence of top industry stakeholders continued to increase in this last edition, leading to some excellent networking opportunities for those who attended. All this makes SiGMA a truly international gaming EXPO, placing Malta, once again, on the ‘Must Do’ list of the yearly gaming calendar events.
This article was published first on SiGMA Magazine.
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