Malta is the first major European country to offer a skill game licence which is set to grab the attention of all the European fantasy sports market – with some major American operators already knocking on the door of the Malta Gaming Authority, Oulala, one of the market leaders, said.
In December 2015, the Malta Gaming Authority published a position paper on ‘digital games of skill’ with prize following a public consultation. The first step has now been taken: Legal Notice 271/2016 was issued a few weeks ago, exempting fantasy sports operators from the need to have a gambling licence. The authority took this decision because the element of skill and knowledge involved in fantasy sports justified differentiating it from games of chance in terms of licensing and regulation – albeit with sufficient regulatory oversight to ensure that consumers are protected.
In fantasy sports, players choose virtual representations of real-life athletes, where the value and points attributed to an athlete reflect their actual performance in sporting events.
Oulala Games was the first DFS operator based in Malta – but in the absence of a local solution, it operates under a UK sports betting licence.
“However, as soon as Malta issues its own skill game licence, we will be proud to operate under the said licence, CEO Valery Bollier said.
“This is the best possible news for Oulala and it will have a very positive effect on our future, as it is key for us to grow in an optimised ecosystem. Silicon Valley’s success is in fact partly due to the hub factor.
Malta has proven to have a very competitive jurisdiction because of its pragmatism and its ability to adapt itself quickly to the sense of history
“Other European countries will most likely follow Malta’s path and create their own skill game licence in the future. However, I remain optimistic that Malta will benefit from the first mover advantage, and that the ‘daily fantasy sports’ sector will have a durable establishment in Malta.
“With this future legislation, there is no doubt that Malta will attract all the serious Daily Fantasy Sports operators.”
Mr Bollier explained that with internet, it was quite common for the market to move at a much quicker pace than the legislators.
“More often than not, fantasy sports tends to be considered a ‘pool betting’ activity, therefore in order to safeguard our young industry, it was crucial for us to push for a legal frame adapted to our specific function from the gaming authorities,” he said.
However, Mr Bollier is anxious that the implementation of the new framework should not have any loopholes: “The industry requires a tailor-made DFS licence, one that should only be granted to companies which are able to prove that theirs is a real skill game. It is imperative that legislators exert caution when selecting operators, basing their decision on the quality of their game and the scoring system, while holding the accuracy of a DFS game as the factor of paramount importance.
“A DFS licence should only enable proven skill games to offer a white label version of their game to third parties. Oulala is currently one of the few that offers one to the market. However, other companies will soon follow suit, hoping to launch their own game through multiple partnerships,” he said.
“Malta has proven to have a very competitive jurisdiction because of its pragmatism and its ability to adapt itself quickly to the sense of history. This will have a very positive effect on Malta’s economy, with regards to jobs, taxes and so on, and it will also show, once again, that Malta is becoming a major digital hub in Europe.”