This summer Malta brought in Legal Notice 271 / 2016 which clarified that fantasy sports are exempt from Maltese Remote Gaming Legislation, in preparation for the creation in 2017 of a new licensing regime designed specifically for ‘games of skill with prize’.

The authority took this decision because of the element of skill and knowledge involved in fantasy sports leagues, in particular, which justified differentiating them from games of chance in terms of licensing and regulation. In fantasy sports, players choose virtual representations of real-life athletes from professional sports where the value and points attributed to an athlete reflect the athlete’s performance in actual sporting events. The performance is converted into points that are compiled and totalled according to a roster selected by each fantasy team’s manager. As such the outcome is determined predominately by skill and knowledge of the players rather than by chance.

The current exemption to licensing will be short lived as the Maltese Government has committed to introducing legislation to regulate certain games of skill which may present increased risks to the consumer, and has said it will become the first European country to create a skill based license. The authority is taking the position that such games of skill do still warrant regulatory intervention which is appropriate and proportionate to the level of risk presented to the consumer. They have however, stated that the regulation for games of skill will be lighter touch and as such the licensing requirements won’t be as onerous as they are for games of chance.

In addition to Fantasy Sports the Maltese Government has proposed that backgammon, tarot and rummy are examples of games of skill. Interestingly, however, they have not explicitly mentioned poker, which is one of the largest gambling markets in the world in which a significant degree of player skill is involved in determining outcomes.

The legislation of skilled games is likely to take place in early 2017, the MGA has handed the proposed Skill Game Regulations to the European Commission and is hoping to have them in place by the end of 2016 so it is conceivable that the regulations could be enacted into law as early as January 2017.

Bespoke regulation for games of skill such as fantasy sports has been welcomed by operators, who have been lobbying for legal recognition of the difference between them and the games provided by ‘pure gambling’ sportsbook and casino operators, for example. The explosion of interest in fantasy sports leagues in recent years has underlined the potential size of this international ‘grey area’, which Malta are now looking to close.

Operators who take advantage of the new MGA skilled games licensing regime, will be able to demonstrate that they have been assessed as responsible operators and as such the legislation is likely to prove very popular. In addition to credibility with players it will also likely make it easier for operators to obtain banking and payment processing services.

To avoid being caught up in a backlog of applications and to take advantage of early mover advantage, operators need to find a gaming licensing partner who can back up that intent with the preparatory work you should be doing now to ensure you are ready when the license application becomes an option.

For further depth on this topic and what the next steps for operators might look like, read our whitepaper on the ten steps operators can take towards gaining a Malta ‘game of skill’ licence.