The proposed regulatory framework intends to strengthen the compliance dimension, especially in view of more in-depth risk analysis as regards anti-money laundering and terrorism funding.

Consumer protection standards, responsible gaming measures, reporting of suspicious sports betting transactions in light of tackling the manipulation of sports competitions and innovation and development-oriented standards are also in special focus of the pending legislation.

Here are the key changes to be introduced by the pending Bill:
LICENCING SYSTEM: Current multi-license system is to be replaced by a dual licencing regime, one covering the Business-to-Business (B2B) and Business-to-Consumer (B2C) activities.

ENHANCED POWERS OF MALTA GAMING AUTHORITY: The regulatory scope will be widened in order to increase the oversight and enforcement role of this institution, with emphasis on the compliance with strict AML and CTF standards.

INNOVATION: Change towards an objective-based rather than excessively prescriptive regulatory approach which will foster the innovation approaches and growth of public revenues.

SCRUTINY CHECK-UPS FOR THE OFFICIALS: The Key Official role will be segmented into various key functions within a licensed activity. There will be approval requirements, direct scrutiny check-ups and targeted supervisory controls as prerequisites for a person to be assigned with the responsibility to conduct a role within gaming business.

STRENGTHENED PLAYER PROTECTION: The mediatory role of the MGA’s Player Support Unit is to be formalised, unified self-exclusion database is expected to move across both remote and land-based delivery channels. The allocation of appeals from decisions of the Authority to the Administrative Review Tribunal will also take place, as well as the introduction of a distinction between administrative and criminal offences.

AUTOMATIZATION: The Authority will function within an automated reporting framework, thus facilitating adherence to obligations and strengthening the Authority’s role in the oversight process.

SPORTS INTEGRITY: The Authority’s role in the fight against manipulation of sports competitions will be more proactive, given the Draft Law will introduce new obligations on operators to monitor betting patterns and report suspicious bets, and to actively cooperate with the National Anti-Corruption Task Force.

TAX RELIEFS: The B2B licensees will be exempt from gaming tax, which will result in increasing Malta’s competitiveness as a global hub for B2B activities.

Although some of the most relevant international operators had already entered the Italian market, in light of this news, substantial portion of the so-far absent Industry’s leading names are also interested in entering the national market. Given the players are less and less attracted by the unlicensed offering, this process will result in increased percentage of channelling of online services, backed by very strict criminal penalties and fines. Here are the key changes to be introduced by the announced licencing procedure:

NUMBER OF LICENCES: It is planned that a total of 120 licenses will be awarded on a “first come first served basis” with no bidding process. However, we will probably be witnessing the case where at least 1/3 of planned licenses are to be awarded to the existing operators whose licenses had previously expired. Therefore, a total of €24 million could enter the nation’s budget only from the application fees.

ELIGIBILITY TO APPLY: Interestingly, the eligibility does not mention particular types of entities as the only ones eligible to apply. However, each interested operator without any of the European online gaming licenses (in Italy or another EU or EEA country) and with a turnover under € 1.5 M during the last 2 years will need to post an additional two-year warranty payment in this amount. Each interested operator must be in the official list authorised by Agency of Customs and Monopolies or hold an evidence issued by the government of the nation in which they have a registered or operational office.

TYPE OF SERVICES COVERED: All the games recognised by Italian legislation and which are not subject to exclusive licensing regime. In practice, we are speaking about an “umbrella” type of licencing regime, with sports betting, horse betting, casino, poker, skill games, fantasy sport, bingo, bets on virtual events included. Technical approval for each type of game is to be mandatory once the license had been awarded.

LICENCING FEE: The one-off fee has been set at € 200 k per granted licence. Additional € 100 k guarantee deposit will be mandatory for any EU or EEA-based legal entity.

LICENCES VALID UNTIL: December 31st,2022.
KEY EVALUATION CRITERIA: Operators will be judged on their technical, IT and organisational know-how, as well as financial and operational stability.

DURATION OF THE LICENCING PERIOD: Once all the applications are filed and the licencing application window is closed, we will be facing a probable 3 to 5 month-period from the application to the award of the licenses, which in practice means until the end of September.

It is worth mentioning that, back in 2016, the Italian gambling market had already exceeded the € 1 bn. figure of income generated. In terms of the 2017 GGR figures, the Italian sports betting market, having generated the € 556 million of gross income, saw a 59% increase when compared to 2016.

As of 26^th June 2017, based upon the decision of the European Commission (EC), the provisions of The Fourth Anti-Money Laundering Directive (4^th AMLD) have effectively come into force. Accordingly, EU Member States are now obliged to transparently transpose the provisions of the Directive into their respective national legislative provisions. The European Commission has commenced with the check-ups of the state of the transposition, that already resulted in written addresses to the Member States that have not yet initialized the necessary measures (14 member countries, according to mid-August records).

As stipulated, the 4^th AMLD applies to ‘obliged entities’, namely credit and financial institutions, as well as legal or natural persons acting in the exercise of their professional activities. Likewise, according to the Article 2 Paragraph 1 Section F of the Directive, providers of gambling services are the legal entities subject to its provisions.

In that respect, Section 21 of the Introductory provisions, although previses the possibility of exemption (that by no means do not apply to casinos) for the customers that do not pose higher risk, obliges the member states to lower the corresponding threshold for the providers of gambling services to EUR 2000 or more, given the fact, as stated, “the use of gambling sector services to launder the proceeds of criminal activity is of concern”. All the gambling-related transactions are subject to the Risk-Based Analysis, Costumer Due Diligence Assessment and as well as to imperatives of a better understanding of the potential financial system abuse, that are to result in a better quality of recommendations and the risk-mapping of Supranational Risk Assessment Reports.

It is apparent that the logic behind this Directive implies that any further imposition of restrictions via national legislature, regarding the services of online betting, is unnecessary and contrary to this legally binding act, as well as of the EU acquis in whole.