MGA (Malta Gaming Authority): Challenges and Opportunities
For many years now, the Malta Gaming Authority (MGA) has arguably been the world’s pre-eminent remote gaming jurisdiction, with little or no competition from bigger countries who took far longer to recognise the value inherent in the industry. In particular, Malta has become the mainstay jurisdiction with regard to licensing and regulation in ‘grey’ gaming markets, such as Australia and Canada, where players are not prevented from participating in online gaming even though operators are barred from running sites from within those countries’ borders.
Although there are other licensing regimes, such as Gibraltar, Belize and Alderney, a site accredited and regulated by the Malta Gaming Authority generally earns the greatest respect and trust from players, and they see it as being a well-organised body that effectively oversees the fair and secure operation of gaming sites. In essence, Malta has for some time been virtually the only game in town.
However, there have been significant challenges posed to the MGA’s position, not least by the UK’s decision to become a ‘white’ market where online gaming is fully regulated through the auspices of the UK Gambling Commission (UKGC). Now, operators of white listed casino sites are required to be regulated by the UKGC if they want to advertise and provide services to UK players, and a point of consumption tax is paid by the operator on every wager.
This development has not, however, significantly impacted on the reputation of the MGA’s licensing regime, as UK-based operators who continue to operate in grey markets still seek and retain Maltese licences. Currently, there are more than 500 MGA licences held by remote gaming operators from around the world and their value continues to be recognised globally.
Nevertheless, in order to retain its pre-eminent position within the remote gaming industry, the MGA has been seeking to expand and diversify its offerings, and is looking to innovate in a number of areas.
Most notably, the MGA is seeking to expand into the realm of Distributed Ledger Technology (DLT) and cryptocurrencies, through allowing operators with its licences to offer online gaming based on DLT and to accept payments using cryptocurrencies such as Bitcoin, Litecoin and Etheruem.
Such a move is not without potential challenges for the MGA. In a White Paper issued in July 2017, the authority noted that before it can licence DLT and cryptocurrency operators with confidence, it needs to ensure that proper protocols are in place to protect players and that security measures are implemented so as to prevent money laundering and the funding of terrorism. This is deemed necessary so that a move towards accepting new technologies and emerging currencies will not in any way compromise the MGA’s reputation and international standing.
Therefore, the MGA is currently establishing a ‘test and learn’ live environment in which cryptocurrencies can be used for gaming, and is also exploring how it might draw up and enact a regulatory regime applicable to remote gaming sites implementing DLT. Industry observers have noted rapidly growing interest in the use of cryptocurrencies at remote gambling sites, fuelled by the spectacular rise in value of Bitcoin and others in 2017, and so the MGA has clearly recognised this as a sector in which it needs to be an active, if not leading, participant in the future.
This represents the sort of forward thinking that has seen Malta lead the way and remain at the forefront of regulated remote gaming for so long. From the outset, it recognised that prohibition was not the answer, but rather that a better solution was to create safe and secure gaming environments in which operators were regulated and controls were in place to ensure that players were treated responsibly and games operated fairly. Likewise, the MGA has recognised that as cryptocurrencies gain more widespread acceptance, it make sense to ensure that players using Bitcoin are able to benefit from the same sort of assurances that players using traditional currencies have always enjoyed.
Therefore, it would seem that despite the challenges posed by the UK and other jurisdictions becoming regulated white markets, Malta looks set to stay ahead of the game, and will continue to be a respected and valued regulator as remote gaming moves into its next phase.