Remote Gaming Regulations, 2004

L.N. 176 of 2004

LOTTERIES AND OTHER GAMES ACT, 2001

(ACT NO. XXIV OF 2001)

Remote Gaming Regulations, 2004

IN exercise of the powers conferred by article 78 of the Lotteries

and Other Games Act, 2001, the Prime Minister and Minister of

Finance has, after consultation with the Lotteries and Gaming

Authority, made the following regulations>-

Part I

Preliminary

(1) The title of these regulations is the Remote Gaming Title.

Regulations, 2004.

(2)

These regulations shall come into force as follows>-

(a)

regulations 2 to 14 hereof on the 20th April, 2004>

Provided that all online betting licences issued before that date

shall be regulated by the provisions of these regulations<

(b) regulations 15 to 39 and 42 to 60 hereof on the 20th

July, 2004< and

(c)

regulations 40 and 41 hereof on the 20th April, 2005<

Part II

Definitions

In these regulations, unless the context otherwise requires>– Interpretation.

“the Act” means the Lotteries and Other Games Act, 2001<

“appropriate resources” means financial resources which

are, in the Authority’s sole discretion, adequate to ensure the

financial viability of operations of a remote gaming office, and

which are available from a source that is not tainted with

illegality<

“appropriate services” means the services of persons who

have appropriate experience to ensure the proper and successful

conduct of a remote gaming operation and, or a remote betting

office<

“approved control system” means a control system

approved by the Authority, and shall include an approved control

system changed or modified with the approval of the Authority<

“authorised game” means remote gaming that a licensee is

permitted to conduct under these regulations<

“the Authority” means the Lotteries and Gaming Authority<

“betting market” means a betting event with a well defined

termination point and decidable outcome<

“control system” means a system of internal controls, and

administrative and accounting procedures for the conduct of a

remote gaming office which is set up and maintained in Malta<

“electronic means” means all electronic data transfer,

whether by telephony, facsimile, computer or any other means

of distance communications as approved by the Authority<

“game” has the same meaning assigned to it by the Act<

“game of chance” has the same meaning assigned to it by

the Act<

“gaming” means an agreement, scheme, or arrangement

between two or more parties to play together at a game of chance

in which a prize or reward consisting of money or some other

item of value, worth, advantage, or opportunity is offered or

can be won and become the property of the winner under defined

conditions established for the purpose of the game<

“gaming records” means all records directly or indirectly

related to remote gaming and to bets provided by a licensee

and to player account information, wagers placed and to the

outcomes of games played<

“gaming system” means a computer system or systems of

computers by means of which remote gaming is conducted, and

shall include all its associated components, its operating

systems and applications software<

“inspector” has the same meaning assigned to it by article

17 of the Act<

“key official” means a person nominated by the licensee

who is a director of the licensee and resident in Malta<

“licensee” means a person to whom the Authority has

issued a remote gaming licence<

“means of distance communications” has the same meaning

assigned to it by the Act but shall not include press advertising

with an order form or catalogue and phone-ins during radio

and television programmes<

“the Minister” means the Minister responsible for finance<

“player” means any person who is over 18 years of age

and who takes part in remote gaming<

“player’s account” means a record kept by the licence

holder, which record shall at all times be accessible to the player,

which shows the player’s credit against such licence holder,

taking into account all wagers placed and all prizes won by

such player and any other debits or credits as may be permitted

by these regulations or approved by the Authority<

“pool betting” means betting made on terms where all or

part of the winnings shall be determined by reference to the

aggregate of stakes paid or agreed to be paid by the person

betting, and which shall be divided among the winners<

“remote betting” means the negotiation or receiving of any

bet by a means of distance communications<

“remote gaming” means any form of gaming by means of

distance communications<

“remote gaming equipment” means a machine or other

device whether electronic, electrical or mechanical, computer

software, or any other mechanism, device or item, used or

suitable for use, in the operation of an authorised game and

which is situated in Malta<

“remote gaming licence” means the licence granted to a

licensee by the Authority to conduct remote gaming<

“remote gaming related activities” means any activity or

business that the Authority considers reasonably related to the

operation of remote gaming, or any business that offers goods

or services to persons who participate in licensed remote

gaming<

“qualifying shareholding” has the same meaning assigned

to it by the Act<

“stake” has the same meaning assigned to it by the Act.

Part III

Licensing

No person shall operate or promote or sell or abet remote

gaming in or from Malta unless such person is in possession of a

valid licence of the relevant class, as set down in the First Schedule

to these regulations, issued by the Authority. Any person who acts

in breach of the provisions of this regulation shall be guilty of an

offence against the Act.

To qualify for a licence, an applicant must be a limited

liability company registered in Malta.

(1) Any person who wants to obtain a licence referred to

in regulation 3 shall apply in writing to the Authority.

(2) Applications for a licence must be made on forms

provided by the Authority and shall include information concerning

the following>-

(i)

Personal background information<

(ii)

Financial information<

(iii) Participation in legal activities, including but not

limited to, any interest or equity in any other commercial

activity<

(iv)

Criminal record information<

(v) Information concerning all pecuniary, equity and

other interests in the applicant< and

(vi) Any other information required by the Authority, for

every director, key official and chief executive officer of the

applicant and for every shareholder with five per centum or

more ownership of, or controlling interest in the applicant>

Provided that the Authority may, at its sole discretion, require

that all beneficial owners of shares in the applicant provide the

information herein mentioned.

(3) An applicant may claim privilege afforded to him by

any other law in refusing to answer questions made, or supplying

information requested by the Authority in conjunction with its

application. However, a claim of privilege with respect to same may

constitute sufficient grounds for denial of a licence.

(1) The granting of a licence shall in all cases be subject Licence fees.

to a non-refundable application fee set down in the Second Schedule

to these regulations>

Provided that the Authority may require all applicants for a

licence to pay the actual costs incurred in conducting investigations

into their backgrounds, suitability and qualifications to obtain a

licence.

(2) No licence shall be processed or issued until payment

of any amount due to the Authority in connection with the application

for a licence has been made.

(1)

A licence granted by the Authority shall be for a five- Period of licence.

year period.

(2) On the expiration of such term a licence may be

renewed by the Authority for further five-year periods at a time>

Provided that any such renewal shall in all cases be subject to

the continued compliance by the licensee, during the preceding

original or renewed term of the licence, with the provisions of the

licence, of the Act and of these regulations, and with any directive

issued by the Authority in terms of the Act or of these regulations

and which are applicable to such licence.

(3) Renewal applications shall be made in the form

specified by the Authority and shall be received by the Authority at

least sixty days before the expiration of the current licence.

(1) The Authority shall not issue or renew a licence

applied for under these regulations unless it is reasonably satisfied

that all persons involved in the applicant company are fit and proper

persons.

(2) In determining whether the applicant is a fit and

proper person, the Authority shall have regard to the following

matters>-

(a) the character of the persons vested with executive

powers in the applicant, and the business reputation of such

persons<

(b) the current financial position, financial background

and business reputation of the applicant’s promoters,

shareholders and directors<

(c) whether the applicant has the appropriate business

ability to conduct remote gaming successfully<

(d) whether the applicant has, or is able to obtain,

appropriate resources and is able to maintain minimum required

reserves as may be established by the Authority in order to

ensure that players shall have winnings paid and deposits

returned<

(e) the commitment of the applicant to maintain a

physical presence in Malta<

(f) whether the applicant is, in the Authority’s opinion,

untainted with illegality<

(g) whether the applicant has followed policies and will

take affirmative steps to prevent money laundering and other

suspicious transactions< and

(h) whether the applicant has the capacity and the internal

control structures to enable it to comply with the policies and

directives which the Authority deems appropriate.

(1) In granting a licence the Authority may subject it to Conditions

licence.

such conditions as it may deem appropriate, and after the grant of

such licence the Authority may from time to time vary or revoke

any condition so imposed, or impose new conditions>

Provided that whenever the Authority deems it appropriate to

vary any condition or impose any new condition in the licence, the

Authority shall, unless such variation or imposition of a new

condition has been requested by the licensee himself, by notice in

writing inform the licensee of its intention to vary the said condition

or to impose the said new condition, calling upon the said licensee

to show cause, within such period being not less that twenty days

after the issue of the notice as may be specified in the same notice,

why such condition should not be varied or such new condition

should not be imposed, and the Authority shall consider any

representations made by the licensee within the period specified in

the notice, before varying the condition or before imposing the new

condition.

(2) A licence granted by the Authority may impose

conditions relating to, inter alia>–

(a)

the proper operation of interactive games<

(b)

the protection of players<

(c)

the prevention of money laundering<

(d)

exigencies of public interest.

(1) The granting of a licence is a revocable privilege, Revocable

privilege.

and no holder thereof shall be deemed to have acquired any vested

rights therein or thereunder.

(2) The burden of proving the licensee’s qualifications

to hold a licence shall rest at all times on the licensee.

(1) A licence granted by the Authority may not be Assignment and

transfer prohibited.

assigned or transferred in any way whatsoever to any other person

without the prior written consent of the Authority, and any such

assignment or transfer to any other person without the Authority’s

consent shall be considered null and void and constitute sufficient

grounds for the Authority to cancel that licence.

(2) Without prejudice to the regulations of this part of

the regulations, it shall be the duty of the licensee to notify the

Authority forthwith of>-

(a) any change in the Board of Directors or management

of the licensee, or any material changes in the information and

documentation provided in terms of regulations 5(1) and

(2) of these regulations, or any other information or

documentation provided by the licensee in terms of any other

provision of the Act, or in terms of conditions attached to the

licence<

(b) any resolution or intended resolution, or any

application or intended application to the Court, or any other

action for the dissolution and winding up of the licensee, as

soon as they become aware of such changes, resolutions or

intended resolutions, applications or intended applications or

actions.

(3) Notwithstanding anything contained in any other law,

the approval in writing of the Authority shall be required before any

person may lawfully>–

(a)

transfer a qualifying shareholding in the licensee<

(b) increase an existing holding which is not a qualifying

shareholding so as to cause it to become a qualifying

shareholding in such licensee<

(c) increase an existing qualifying shareholding in such

licensee so as to cause it to equal or exceed five per centum of

the share capital issued by the licensee or of the voting rights

attaching to such share capital, or to cause the licensee to

become that person’s subsidiary<

(d) reduce an existing qualifying shareholding in such

licensee so as to cause it to fall below five per centum of the

share capital issued by the licensee or of the voting rights

attaching to such share capital<

(e) reduce an existing qualifying shareholding in such

licensee so as to cause it to cease to be a qualifying shareholding.

(4) It shall also be the duty of the licensee to obtain the

prior approval in writing of the Authority before taking any of the

following actions>-

(a) the sale or other disposition by the licensee of

its business<

(b)

the merger of the licensee with another company<

(c)

the reconstruction, division of a company<

(d) the reduction of the nominal or issued share

capital of the licensee or the increase or reduction of its

voting share capital or any material change in voting rights

in such licensee<

(e) entering into any contractual arrangements with

any supplier or entity providing services, if such supplier

or entity will receive a percentage of the profits of the

remote gaming operation, pursuant to such an agreement<

(f) the surrender of the licence by the licensee during

the licence term.

(5) Where the licensee or another person takes any of

the actions set out in paragraphs (a) to (e) of sub-regulation (3) and

in paragraphs (a) to (f) of sub-regulation (4), without the prior

approval in writing of the Authority, or is in breach of any terms

and conditions specified by the Authority in any such approval, the

Authority may, without prejudice to its powers under regulations 14

and 15>–

(a) issue a directive declaring such action or transfer to

be void and of no effect, which directive shall be effective

against all persons involved in such action or transfer

notwithstanding the provisions of any other law and, or

(b) issue a directive to such licensee or, as the case may

be, to such person to do or refrain from doing any act which the

Authority may deem appropriate in the circumstances,

and such licensee or, as the case may be, such person shall comply

with any such directive issued to it by the Authority in terms of

paragraph (b) of this sub-regulation (5), failing which he shall be

guilty of an offence against the Act.

(1) Where any person or licensee has sought the approval Notice by the

Authority.

of the Authority under sub-regulations 11(3) and (4), the Authority

shall within a reasonable time, which however shall not exceed ninety

days, running from the day on which its approval has been sought,

inform in writing the person or licensee seeking approval, of its

decision>

Provided that where the Authority has objected to the action

for which approval is being sought it shall in the same notice state

the reasons for such objection>

Provided further that the Authority shall also in the same notice

inform the said person or licensee that he may show cause, within

such period being not less than twenty days after the issue of the

notice as may be specified in the same notice, why such decision

should not be taken, and the Authority shall consider any

representations made by such person or licensee, before taking a

decision which shall be final.

(2) The Authority may, before reaching a final decision,

request the person or licensee seeking its approval, to provide the

Authority with any information or documents it may reasonably

require in order to make a decision.

(3)

Where the Authority has given its approval>–

(a) the act or event for which the Authority’s approval

has been sought must take place within twelve months, which

shall commence to run from the day on which the person or

licensee seeking approval has been served with a written notice

of same<

(b) the Authority may impose any terms and conditions

that it shall deem necessary or expedient.

(4) (a) Where the licensee has sought the approval of

the Authority to surrender his licence, the Authority shall not approve

same unless it is shown to its satisfaction that the licensee is not in

breach of any provisions of the Act, these Regulations, any directive

issued by the Authority or the conditions of the licence, at the time

when such request for approval has been made.

(b) The Authority shall also require evidence that

players’ monies have been duly refunded or alternative arrangements

in respect of such monies have been made to the satisfaction of the

Authority.

(1) The Authority may order the suspension or

cancellation of a licence if>-

(a) any person who has an interest in the licensee, or any

key official in relation to the licence is convicted in any country

or territory of an offence which is punishable in that country or

territory by imprisonment<

(b) the licensee has failed without reasonable cause being

shown to comply with any material term or condition of the

remote gaming licence<

(c) the licensee has failed to discharge financial

commitments for the licence holder’s operations or the

Authority has reason to believe that such failure is imminent<

(d)

the licence holder is insolvent or is being wound up<

(e) the licence holder applies for an order, or is compelled

by any means or for any reason, to discontinue or to wind up its

operations<

(f) the remote gaming licence was obtained by a

materially false or misleading representation or in some other

improper way<

(g) the licence holder is in breach of the laws or

regulations at any time in force for the prevention of money

laundering<

(h) the licence holder has failed to meet commitments to

players<

(i) the licence holder has failed to pay in a timely manner

all gaming or betting taxes due to the Authority<

(j) the Authority, in its sole discretion, has determined

that there is material and sufficient reason for suspending or

revoking the licence<

(k) the Authority reasonably deems it necessary in the

national interest to cancel or suspend a licence< and

(l) the Authority is reasonably satisfied that the licensee

presents a danger to the reputation of gaming in Malta.

(2) (a) The suspension, revocation or expiration of the

licence shall not affect any liability of the licence holder for anything

done or omitted to be done before the date of suspension, revocation

or expiration.

(b) The liability of the licence holder to pay any fee

or remote gaming tax shall continue during any period when the

licence is suspended.

(1) Where a ground for cancellation or suspension of a

licence arises under regulation 13, the Authority shall, by notice in

writing, request the licensee, and may request any other person who

in its opinion has an interest in the licence, to show cause, within

such period being not less than twenty-one days after the issue of

the notice as specified in the same notice, why the licence should

not be cancelled or suspended on such ground as is stated in the

notice>

Provided that the Authority may, in the same notice, require

the person on whom the notice is served in terms of this regulation,

to tender any information or documents which the Authority may

deem necessary in the circumstances.

(2) The Authority shall have regard to any representations

made under sub-regulation (1) hereof in such a manner that>-

(a) where the matter is resolved to its satisfaction, it shall

take no further action and shall inform the licensee in writing

accordingly<

(b) where, although the matter is resolved to its

satisfaction, it considers that further action is not warranted, it

shall caution the licensee in writing< or

(c) where the matter is not resolved to its satisfaction

and it is satisfied that further action is warranted, it may>–

(i) by notice in writing give such direction to the

licensee as it considers appropriate< or

(ii) suspend the licence for such period as it thinks

fit, or cancel such licence.

(3) Where a direction given by the Authority under sub-

regulation (2)(c)(i) hereof is not complied with within the time

specified in the notice, the Authority shall cancel the licence.

Part IV

Key official

(1) A licensee shall appoint at least one key official and Appointment of

key official.

such appointment has to be approved by the Authority and shall be

a condition of the licence.

(2)

A key official shall>-

(a) personally supervise the operations of the licensee of

which he is a key official<

(b) shall ensure that the licence holder shall comply with

all applicable laws and regulations, the conditions of the licence

and any directives issued by the Authority to the licensee.

An application for the appointment of a key official shall Application for

key official.

be made to the Authority in writing, on an approved form.

The Authority shall not issue a licence to an applicant for Key official to be

fit and proper.

a key official licence unless it is satisfied that such person is fit and

proper to fulfill his obligations and discharge his duties.

(1) The Authority shall cancel the licence of a key Cancellation of

key official

official if such an official>-

licence.

(a)

ceases to be resident in Malta<

(b)

ceases to be a director of the licensee<

(c) ceases to be, in the Authority’s sole discretion, a fit

and proper person.

(2) The Authority may cancel the licence of a key official

if such an official is convicted in any country or territory of an offence

punishable with imprisonment.

A key official licence shall remain valid until it is cancelled Duration of key

official licence.

by the Authority under any of the grounds mentioned in regulation

18 or surrendered to the Authority by its holder>

Provided that a key official licence cannot be surrendered

without the written consent of the Authority.

Part V

Control System

(1) An applicant for a licence shall submit in writing to

the Authority for the purposes of approval, the specifications of the

control system he intends to use during operations>

Provided that licensees whose gaming system is hosted by a

Class 4 licensee shall be exempted from this requirement.

(2)

Such submissions shall include detailed information

relating to>-

(a)

the operation of remote gaming<

(b) general procedures to be followed for the operation

of remote gaming<

(c)

computer software where applicable<

(d) procedures for recording and paying prizes won in

remote gaming<

(e)

accounting systems and procedures<

(f)

procedures to be followed to play a game<

(g) procedures and standards for the maintenance,

security, storage and transportation of equipment to be used to

conduct remote gaming<

(h) procedures for the setting up and maintenance of

security facilities including general compliance and internal

controls relating to access to critical systems<

(i)

a disaster recovery plan<

(j)

an adequate system of data backup<

(k)

any other information that the Authority may require>

Provided that the provisions of this regulation shall also apply

when a licensee intends to change a control system which had been

approved by the Authority.

(1) The Authority may at its sole discretion, submit or Testing

system.

direct the applicant or licensee to submit the proposed control system

or an approved control system, to an audit.

(2) The costs incurred for such audit shall be borne by

the applicant or the licensee as the case may be.

In considering whether to grant the approval mentioned Approval of

control system.

under regulation 20 the Authority shall have regard to the following

matters>-

(a) whether the proposed control system or the proposed

changes to the control system satisfy all the requirements of

the Act and these Regulations<

(b) whether the proposed control system or the proposed

changes to the control system are capable of providing

satisfactory and effective control over the operation of remote

gaming.

The Authority shall by written notice inform the applicant Notice by the

Authority.

or licensee of its decision and where approval in terms of regulation

22 has not been granted, the Authority shall give reasons for its

refusal to grant approval>

Provided that in cases where approval is granted, the Authority

shall have the right to direct the applicant or licensee, by means of a

directive, to change or modify the approved control system in any

manner whatsoever, within a period of time which shall not be less

than thirty days from the date on which the directive is served on

the applicant or licensee>

Provided further that failure to comply with such directive shall

constitute sufficient grounds for the Authority not to issue a licence

or to suspend the licence as the case may be.

All remote gaming shall be conducted under the control Gaming to be

conducted under

system which has been approved by the Authority.

control system.

Part VI

Gaming System

An applicant for a licence, or a licensee shall in respect of Conformity of

gaming system.

a new gaming system, and before any such system becomes

operational, provide adequate certification that may be required by

the Authority>

Provided that the certification must show that gaming system

has been found within the previous six months to comply with each

and all the technical specifications laid down in the Third Schedule

to these Regulations.

The certification submitted to the Authority for approval

must, where the system is based on computer software, include the

following information>-

(a)

the name of the owner of the software<

(b) the name of the organisation which did the testing

required by the Authority<

(c) all companies and organisations involved in the

process and their credentials<

(d) all individuals involved in the process and their

professional credentials<

(e)

the processes, rules and parameters of the games<

(f) the server protocols, communication protocols and

other specifications which are part of the gaming system

architecture<

(g)

information about the security of the system<

(h) which modules affect processes, rules and parameters

of the game if the source-code is changed<

(i) any other information that is of material importance

to the specific software<

(j) a detailed description of the setup and functionality

of the application architecture and system architecture.

No changes to the gaming system shall be made without

the prior approval of the Authority and additional certification of

compliance.

Where approval of the system is not granted the Authority Notice

Authority.

shall inform the applicant or licensee of its decision in writing stating

its reasons for refusal.

Notwithstanding that the system has been approved for Further testing of

gaming system.

operation, the Authority may at any time direct the licensee to submit,

at the licensee’s cost, the system’s software for further testing,

checking or verification.

(1) No gaming equipment may be used in the operation Gaming

equipment.

of an authorised game pursuant to an online betting or online gaming

licence, without the prior approval of the Authority.

(2) The Authority may, by written notice, require that

gaming equipment be submitted for certification by an approved

company or organisation.

The Authority may at any time after these regulations come Approved

certification

into force publish a list of approved certification companies and companies.

organisations.

Part VII

Registration of Players

(1) A licensee shall not permit a person to participate as Application for

registration of

a player in an authorised game conducted by the licensee unless that players.

person is registered as a player and holds an account with the licensee.

(2) (a) The licensee may register a person as a player

only if the licensee has received from that person an application for

registration<

(b) The application shall at least include the

following details>-

(i)

that the player is over eighteen years of age<

(ii)

the player’s identity<

(iii)

the player’s place of residence<

(iv)

the player’s valid e-mail address>

Provided that if a licensee becomes aware that a person has

provided false information in this respect, the licensee shall not

register such person and where that person has already been

registered, the licensee shall immediately cancel that person’s

registration as a player with the licensee.

(3) No person under eighteen years of age may be

registered as a player and any funds deposited or any money won by

any such persons shall be forfeited to the Authority.

(4) The licensee shall, at all times, keep a secure online

list of all registered players.

(5) Any one player can only register a single account

with the licensee.

The licensee shall make available to a player the following

information>-

(a) all the rules relating to authorized games conducted

by the licensee<

(b) any relative processing fee that may be incurred by

the player.

The player of an authorized game shall comply with all

the rules mentioned in regulation 33 (a).

Part VIII

Players’ Accounts and Payment of Winnings

(1) The licensee shall establish and maintain a player’s

Players’ account to

account in relation to each player who is registered with the licensee.

(2) The licensee must credit to the account established

under sub- regulation (1) in respect of a registered player all funds>–

(a) received by the licensee from or on behalf of the

player< or

(b)

owned by the licensee to the player.

(3)

The licensee shall not accept a wager from a player

unless>–

(a) a player’s account has been established in the name

of the player and there are adequate funds in the account to

cover the amount of the wager< or

(b) the funds necessary to cover the amount of the wager

are provided in an approved way.

(4) The licensee shall not accept cash from a player and

funds may be received from the player only by any of the following

methods>-

(i)

credit cards<

(ii)

debit cards<

(iii)

electronic transfer<

(iv)

wire transfer<

(v)

cheques<

(vi)

any other method approved by the Authority.

(5) A licensee shall not provide credit to a player or a

player’s account or act as agent for a credit provider to facilitate the

provision of credit to a player or a player’s account.

A licensee shall not make a payment in excess of one Payment to

players.

thousand Maltese liri out of a player’s account to a player until the

player’s identity, age and place of residence have been verified.

(1) A licensee must, at the request of the registered Remission

funds.

player in whose name a player’s account is established, remit the

funds standing to the credit of the account to the player by no later

than five working days, if practicable, after receipt of the request.

(2) An amount may only be remitted by the licensee to

the player, to the same account from which the funds paid into the

player’s account originated.

(3) A licensee may, before remitting funds to a player in

accordance with sub-regulation (1), take such time as is reasonably

necessary for the purpose of>–

(a)

verifying the player’s registration as a player<

(b)

verifying the playing of a game by the player<

(c) conducting security and other internal procedures in

relation to the player’s account< and

(d) ensuring that the rules that are approved relating to

the award of the prizes to players have been complied with.

A licensee shall not deal with the amount standing to the

credit of a player’s account except>–

(a) to debit to the account a wager made by the player or

an amount the player indicates the player wants to wager in the

course of an authorised game the player is playing or about to

play<

(b) to remit funds standing to the credit of the account to

the player, at the player’s request, in terms of regulation 37<

(c) to pay reasonable bank charges for deposits received

and funds withdrawn< or

(d)

as otherwise authorised by these regulations.

If no transaction has been recorded on a player’s account

for thirty months, the licensee shall remit the balance in that account

to the player, or if the player cannot be satisfactorily located, to the

Authority>

Provided that no claim shall lie against a licensee who has

remitted the balance in a player’s account to the Authority.

(1) A licensee shall keep players’ funds separately from

the licensee’s own funds in a Clients’ account held with a credit

institution approved by the Authority.

(2) (a) The funds in the players’ account, including

funds in transit or in the process of being cleared through the banking

system or by credit card processing companies, shall at any time be

at least equal to the aggregate of the amount standing to the credit of

players’ accounts held by the licensee>

Provided that if the funds standing to the credit of the clients’

accounts fall below the aggregate total of the amounts standing to

the credit of players’ accounts, the licensee shall make good the

shortfall from the licensee’s own funds within a period of thirty days

of the end of the month in which the shortfall occurs.

(b) The Authority may, at its sole discretion,

consider funds held in other accounts belonging to or controlled by

the licensee to be included with funds in the clients’ accounts for

the purpose of this regulation.

(3) The credit institution holding a clients’ account shall

declare and affirm in writing that>–

(a) it will not attempt to enforce or execute, any charge,

write-off, set-off or other claim against a clients’ account<

(b) it will not combine the account with any other account

in respect of any debt owed to it by the licensee<

(c) it shall credit any interest payable on a clients’

account, only to that account>

Provided that the licensee shall tender proof of these

commitments by the credit institution to the Authority>

(4) (a) For the purpose of protecting players’ funds

the Authority may, for just cause, order by means of a directive the

licensee to take out a bank guarantee in favour of the Authority.

(b) The bank guarantee shall be in such amount and

for such period of time, as determined by the Authority>

Provided that if the licensee fails to comply with the directive

within three working days from the issue of such directive, the

Authority may suspend the licence.

The licensee shall instruct and authorise the credit financial Information to the

Authority about

institution by which a players’ account is held to disclose any players’ account.

information as may be requested by the Authority in respect of a

players’ account.

Part IX

Financial Protection of Players

A licensee shall display at all times, in a prominent place, Problem gaming

warning.

on the entry screen of the website, a warning of the addiction

possibilities of gaming and information and links to other websites

assisting compulsive gamblers.

(1) A registered player may by written notice or

electronic notice to the licensee>-

(a) set a limit on the amount the player may wager within

a specified period of time<

(b) set a limit on the losses the player may incur within a

specified period of time<

(c) set a limit on the amount of time the player may play

in any one session<

(d) exclude the player from playing for a definite or

indefinite period of time.

(2) A player who has set a limit or exclusion under this

regulation may change or revoke the limit or exclusion by written

notice or electronic notice given to the licensee.

(3) A notice increasing or revoking a limit or decreasing

the exclusion has effect only after seven days after the licensee has

received the notice.

(4) A notice reducing a limit or increasing the exclusion

has effect immediately after it is received by the licensee.

(5) A licensee shall not accept a wager from a player

contrary to a limit or exclusion set by the player under this regulation.

(1) Where the game is displayed on a screen the licensee

shall cause to be displayed on the screen, at all times during the

game, a counter which automatically updates and shows the player’s

account balance.

(2) (a) The licensee shall also make available to every

player an automatic reality check at intervals of one hour.

(b)

The automatic reality check shall>-

(i)

suspend play<

(ii) clearly indicate for how long the player has been

playing<

(iii) display the player’s winnings and losses during

such period of time<

(iv) require the player to confirm that the player has

read the message<

(v) give an option to the player to end the session or

return to the game.

All amounts displayed relating to wagers and winnings Indication of

currency.

shall be quoted with the symbol of currency that the player is playing

with.

Without prejudice to anything contained in regulation Full screen games

prohibited.

45, full screen games cannot be offered to players unless a real time

clock is displayed on the screen at all times and players are given

the facility to exit the game.

Part X

Aborted and Miscarried Games

(1) A licensee shall take all reasonable steps to ensure Procedure to be

followed when

that the licensee’s approved computer system enables a player whose game aborts.

participation in a game is, after he or she has made a wager,

interrupted by a failure of the telecommunications system or a failure

of the player’s computer system that prevents the player from

continuing the game, to resume, on the restoration of the system, his

or her participation in the game that was interrupted as at the time

immediately before the interruption.

(2) If a licensee’s computer does not enable a player to

continue, after the restoration of the system, with a game interrupted

by a failure of the telecommunications system or the player’s

computer system, the licensee shall>–

(a)

ensure that the game is terminated<

(b) refund the amount of the wager to the player by

placing it in the player’s account.

(1) If a game is started but miscarries because of a failure Procedure to be

followed when

of the licensee’s computer operating system, the licensee shall>–

game miscarries.

(a) (i) refund the amount wagered in the game to the

player by crediting it to the player’s account or, if the account

no longer exists, by paying it to the player in an approved

manner< and

(ii) if the player has an accrued credit at the time

the game miscarries, credit to the player’s account the monetary

value of the credit or, if the account no longer exists, pay it to

the player in an approved manner<

(b) inform immediately the Authority of the

circumstances of the incident<

(c) refrain from conducting a further game if the game is

likely to be affected by the same failure>

Provided that the Authority may, by written notice to the

licensee, give the licensee other directions which the Authority

considers appropriate in the circumstances.

Part XI

Website to be maintained by Licensee

A licensee shall maintain a website, the homepage of

which shall contain the following information>-

(a)

the registered name of the licensee’s company<

(b)

the address of the company’s registered office<

(c)

the official number and date of issue of the licence<

(d) a statement that the licensee’s operations are regulated

by the Authority<

(e) hyperlinks to the website of organisations specialised

in helping problem gamblers and which are approved by the

Authority<

(f) hyperlinks to the rules of the games or betting offered

and the procedures adopted by the licensee for the registration

of players<

(g) the kite-mark of the Authority which shall double up

as a link to the Authority’s website<

(h) any other information that the Authority may deem

necessary and expedient>

Provided that the Authority may require all such information

to be presented in a particular format.

Part XII

Keeping of Records and Accounts

The Authority may by written notice to a licence holder>- Procedure to keep

records.

(a) approve a place indicated by the licence holder, other

than the licensee’s registered office, as a place for keeping the

licensee’s remote gaming<

(b) specify any remote gaming records of the licensee

that are not required to be kept at the approved place<

(c) specify remote gaming records of the licensee that

may be kept temporarily at a place other than the approved place,

and the period for which, or the circumstances in which, the

records may be kept at such other place<

(d) approve the keeping of information contained in a

remote gaming record in a manner different from the manner

in which the information is to be kept under the licensee’s

approved control system.

The licensee shall keep, in respect of the transactions and Accounts to show

true and fair view

affairs relating to the remote gaming operations, proper accounts of financial

and records which show a true and fair view of the financial position position.

and state of affairs of the licensee.

(1) The licensee shall, within sixty days from the end of Filing of financial

statements.

its financial year, file with the Authority an audited set of financial

statements prepared in accordance with international financial

reporting standards.

(2) The licensee shall, within thirty days from the end of

the half yearly period, lodge with the Authority interim financial

statements prepared in accordance with international financial

reporting standards, showing the licence holder’s results and signed

by the key official.

(3) The Authority may require additional financial

information in a format to be specified by the said Authority.

The Authority may, at its sole discretion, conduct an

investigation of a licensee and, or a key official if it is brought to its

attention or it has reason to believe that the licensee and, or key

official are not conforming to the Act and, or these regulations.

Part XIII

Enforcement

(1) Without prejudice to anything contained in articles

18, 19 and 20 of the Act, an inspector shall for the purpose of

ascertaining that these regulations and that all the conditions of a

licence issued by the Authority under these regulations are being

complied with, and that the full amount of fees, tax or any other

sums payable under the Act or under these regulations are being

paid, also have the following powers>-

(a) to inspect, test and examine any equipment or

software being used in the operation of remote gaming<

(b) to remove any equipment or software to another place

or premises approved and designated by the Authority, for the

purpose of an inspection or examination<

(c) to inspect any premises whether approved or not

where equipment, software, documents or records are kept<

(d) to request information or the production for inspection

of any document or any other thing for the purposes of an

inspection<

(e) to remove any document or any other thing produced

as a result of a request under the preceding paragraph or

discovered during an inspection for the purpose of examining

the document or other thing or making copies or taking extracts.

(2) An inspector removing equipment, software,

document or other thing from approved premises or other place under

sub-regulation (1) shall first provide a receipt for it to the person

who owns or is in charge of the premises or place and, subject to

sub-regulation (3), shall promptly return the equipment, software,

document or other thing to the premises or other place after

completion of the inspection, examination, testing, making of copies

or taking of extracts, as the case may be.

(3) An inspector may, for the purposes of evidence, detain

any equipment, software, document or other thing that the inspector

discovers while acting under this regulation and believes, on

reasonable and probable grounds, may afford evidence of a violation

of or a non-compliance with anything contained in these regulations>

Provided that copies of or extracts from documents or other

things removed from a licensed premises or other place under this

regulation, and certified by an official of the Authority making the

copies or taking the extracts as being true copies of or extracts from

the originals, are admissible in evidence to the same extent as, and

have the same probatory value as, the documents or things of which

they are copies or from which they are extracts.

(1) The person who owns or is in charge of any place or Conduct during

premises entered by an inspector under regulation 54, and any inspections.

employee or agent of such person shall give all reasonable assistance

to the inspector to enable the inspector to exercise the powers given

under articles 18 and 19 of the Act and regulation 54, and shall furnish

the inspector with such equipment, software, records, documents,

information or other thing as the inspector may reasonably request.

(2) No person shall hinder, obstruct or otherwise interfere

with, or knowingly make a false or misleading statement, either orally

or in writing, or provide or produce a false document or other thing

to, an inspector who is carrying out his or her duties and functions

under this regulation>

Provided that any act of commission or omission or any other

behaviour in contravention of this regulation shall constitute an

offence against the Act.

Part XIV

Handling of Complaints

(1) A licensee shall immediately inquire into any Inquiry into

complaints.

complaint made to the licensee or to the Authority by a registered

player in respect of the following>–

(a)

the operation of a game operated by the licensee<

(b) the conduct of an agent of the licensee in operation

related to a game operated by the licensee.

(2) The licensee shall inform the complainant, or the

Authority, where the complaint was referred to the licensee by the

Authority, by notice in writing or by any telecommunication device,

of the results of the inquiry within twenty-one days from the date on

which the complaint has been lodged with the licensee.

(3) Where a complaint is lodged directly with the

Authority, the Authority may>–

(a)

either inquire into the complaint itself< or

(b) refer the complaint to the licensee against whom the

complaint is made>

Provided that the licensee shall follow the procedure set down

in sub-regulation (2) hereof.

(4) A complaint shall contain clear and unequivocal

information about the complainant’s identity, and shall give all the

relevant details that gave rise to the complaint.

Part XV

Financial Provisions

(1) A licensee shall pay to the Authority on behalf of

the Government the rate of tax laid down in the Fourth Schedule of

these Regulations based on>-

(a) a fixed amount per month in the case of online

gaming<

(b)

the total amount of bets made in the case of online

betting<

(c) the aggregate winning bets in the case of betting

exchanges.

(2) The licensee shall effect payment to the Authority of

the tax due in respect of the preceding month by not later than the

twentieth day of the following month.

Part XVI

Offences and Penalties

Any contravention of these regulations shall be considered Contraventions,

fines and

an offence against the Act and any person so guilty of an offence penalties.

shall, on conviction, be liable to a fine (multa) of not less than

three thousand liri and not more than one hundred thousand liri or to

imprisonment for a term of not more than two years, or to both such

fine and imprisonment>

Provided that where the person convicted of such an offence is

a recidivist, he shall be liable to a fine (multa) of not less than five

thousand liri and not more than one hundred and fifty thousand liri,

or to imprisonment for a term of not less than six months and of not

more than three years, or to both such fine and imprisonment>

Provided further that where the person so found guilty is the

director, manager, secretary or other similar officer of a company or

other undertaking, the said person shall, for the purpose of this

regulation, be deemed to be vested with the legal representation of

the same company or other undertaking, which shall accordingly be

liable in solidum with the person found guilty for the payment of the

said fine.

(1) Without prejudice to anything contained in articles Administrative

fine.

67, 68, 69, 70, 71, 72, 73 and 74 of the Act, the Authority may, with

the concurrence of a licensee who contravenes a condition of his

licence, or any directive issued by the Authority under these

regulations, impose an administrative fine or sanction upon such

licensee>

Provided that such an administrative fine or sanction may be

imposed as an alternative to proceedings in court and it shall not

exceed one hundred thousand liri.

Part XVII

Advertising

(1) No licensee shall in any way engage in advertising

or permit anyone involved in the licensee’s operations, to engage in

advertising that>-

(a) implies that remote gaming promotes or is required

for social acceptance, personal or financial success or the

resolution of any economic, social or personal problems<

(b) contains endorsements by well-known personalities

that suggest remote gaming contributed to their success<

(c) is specifically directed at encouraging individuals

under eighteen years of age to engage in remote gaming<

(d)

exceeds the limits of decency.

(2) The licensee shall not engage in any activity that

involves sending of unsolicited electronic mail, whether it is through

its own operation or by the intervention of third parties.

B

First Schedule

Regulation 3

Licences

1. Applicants may apply for either or all of the following licences>–

(a)

Class 1 Remote Gaming Licence shall be a remote gaming licence.

(b) Class 2 Remote Gaming Licence shall be a remote betting office

licence or an online betting exchange office licence.

(c) Class 3 Remote Gaming Licence shall be a licence to promote and,

or abet remote gaming from Malta.

(d) Class 4 Remote Gaming Licence shall be a licence to host and

manage remote gaming operators, excluding the licensee himself.

B

Second Schedule

Regulation 6

Application and Licence Fees

1. Without prejudice to anything contained in regulation 6, the following

licence fees, to be paid once only together with the submission of an application

for the issuing of a Licence, shall be charged by the Authority>-

All Classes of Remote Gaming Licence – one thousand Maltese liri

(Lm1,000).

2. Upon receipt of notice that the class or classes of licences applied for will

be granted for a period of five years, a licence fee for each licence shall be charged

by the Authority as follows>-

All Classes of Remote Gaming Licence – three thousand Maltese liri

(Lm3,000) per annum.

3. Upon application for the renewal of a licence, a renewal fee for each

licence shall be charged by the Authority as follows>-

All Classes of Remote Gaming Licence – five hundred Maltese liri

(Lm500).

B

Third Schedule

Regulation 25

Technical requirement for gaming system

1. The gaming system must>-

(a)

faithfully follow the game rules published by the operator< and

(b) provide over time no more than the expected house advantage to

the operator.

2. Both the gaming and financial transactions must be congruent and secure.

3. The gaming system must satisfy the following criteria for randomness,

following Schneier>-

(a) the data must be randomly generated, passing appropriate statistical

tests of randomness<

(b) the data must be unpredictable, i.e. it must be computationally

infeasible to predict what the next number will be, given complete knowledge

of the algorithm or hardware generating the sequence, and all previously

generated numbers<

(c) the series cannot be reliably reproduced, i.e. if the sequence generator

is activated again with the same input (as exactly as is reasonably possible) it

will produce two completely unrelated random sequences.

4. The outcome of any game event, and the return to the player, must be

independent of the CPU, memory, disk or other components used in the playing

device used by the player.

5. The game or any game event outcome must not be affected by the effective

bandwidth, link utilisation, bit error rate or other characteristic of the communication

channel between the gaming system and the playing device used by the player.

6. The gaming system must be able to display for each game the following

information on the current page or on a page directly accessible from the current

page via a hyperlink>-

(a)

the name of the game<

(b)

restrictions on play<

(c) instructions on how to play, including a pay-table for all prizes and

special features<

(d)

the player’s current account balance<

(e)

unit and total bets permitted<

(f)

the rules of the game.

7. All financial reports produced by the gaming system must be congruent

with gaming transaction reports and conversely>

Provided that all such reports shall be readily and freely available to the

Authority.

8. The gaming system must>-

(a) be capable of producing monthly auditable and aggregate financial

statements of gaming transactions, and

(b) calculate accurately all taxation and other monies due to the

Authority.

9. The gaming system must maintain information about all games played,

including>-

(a)

the identity of the player<

(b)

the time the game began as recorded on the games server<

(c)

the balance on the player’s account at the start of the game<

(d)

the stakes placed in the game (time stamped by the games server)<

(e)

the game status (in progress, complete, etc.)<

(f)

the result of the game (time stamped by the games server)<

(g)

the time the game ended as recorded by the games server<

(h)

the amount won or lost by the player< and

(i)

the balance on the player’s account at the end of the game.

10. The gaming system must maintain information about significant events

as follows>-

B

(a)

large wins<

(b) transfers of funds in excess of such amount as the Authority may

from time to time direct by notice in writing to the operator<

(c)

changes made by the operator to game parameters.

11. Any variations to any of the requirements specified in this Schedule

shall be submitted to the Authority for its approval by notice in writing.

B

Fourth Schedule

Regulation 57

Taxation

A licensee shall pay to the Authority on behalf of the Government the following

rate of taxation>-

1. On all remote gaming(except betting and pool betting)>

Two thousand Maltese liri (Lm2,000) per month during the first six months

after issue of the licence and subsequently three thousand Maltese liri (Lm3,000)

per month for the entire duration of the licence period>

Provided that on remote gaming operated by a Class 4 Remote Gaming

licensee, the licensee who operates the hosting platform shall not pay any tax for

the first six months after the issue of the licence, one thousand Maltese liri

(Lm1,000) per month for the subsequent six months and subsequently two thousand

Maltese liri (Lm2,000) per month for the entire duration of the licence>

Provided further that licensees operating from the hosting platform shall pay

five hundred liri (Lm500) per month.

2. (a) On the gross amount of bets accepted in remote betting operations a

sum equivalent to half of one per centum (0.5%)<

(b) On betting exchanges - half of one per centum (0.5%)

on the sum

of all net winnings calculated per player per betting market.

3. On pool betting - a sum equivalent to half of one per centum (0.5%)

on

the aggregate of stakes paid.

Provided that in all cases the total maximum of tax payable per annum by one

licensee in respect of any one licence shall not exceed two hundred thousand Maltese

liri (Lm200,000)

Mitbug[ fl-Istamperija tal-Gvern — Printed at the Government Printing Press