Legal frameworks need to be reviewed

The Malta Gaming Authority (MGA) has issued new guidance in order to help gambling operators who may find themselves affected by the UK exiting the European Union on October 31.

Titled ‘Guidance document on the impact of the UK’s exit from the European Union’, it aims to update licensee holders on the business consequences of Brexit at the end of the month.

This guidance document highlights both UK and EU legal frameworks, especially when it comes to issues such as data protection, employment, immigration, and copyright considerations.

UK to no longer fulfill criteria

One new important part of the document can be found in the section called Gaming Authorisations Regulations. As part of conditions for Regulation 10, it states:

A license holder must be a person or entity established within the European Economic Area (EEA).”

This will no longer apply to operators based in the UK from next month, as the country will be excluded from the ‘Treaty on the Functioning of the European Union (TFEU)’, which provides freedom for goods and services moving between borders.

Therefore, the MGA suggests that all operators should undertake a ‘transfer of license’ if it wants to continue with the Gaming Authorisations Regulations requirements for Malta and the rest of the EU. This would mean a licensee would have to transfer their license to a company or subsidiary located within the EEA.

Prosecution warning

UK-licensed gambling operators will now fall foul of Regulation 22, which states that iGaming operators with licenses outside of Malta are able to trade inside, as long as they adhere to any licensing provisions laid down in other EU or EEA member states.

The update also warned that if they fail to do so, operators could face prosecution. The warning states: “Following the United Kingdom’s exit from the European Union, entities operating in or from Malta, on the strength of an authorisation issued to them by the competent authorities in the United Kingdom will no longer be able to make use of the procedure laid down in regulation 22, and thus run the risk of committing a criminal offence.”

No impact on digital payments

However, on other matters that relate to digital payments, which have been deemed ‘ancillary matters’ by the MGA, there should be no further impact.

These matters include digital payments that have been sanctioned by UK authorities and/or game certificates. It also applies to any essential business components or retail estate that is currently located within the UK.

[the] MGA’s position could change if the UK agrees to a deal with the EU

This advice from the MGA comes follows a note being issued by the UK Government on how the gambling industry should prepare for a no-deal exit.

There remains a possibility that the MGA’s position could change if the UK agrees to a deal with the EU by October 31, 2020.