No gaming license needed for fantasy sports

In fantasy sports, players choose virtual representations of real-life athletes, where the value and points attributed to an athlete reflect the athletes’ performance in actual sporting events, and where the outcome is determined predominantly by skill and knowledge rather than by chance.

Fantasy sports have been exempt from the need of a gaming license, following calls to differentiate games of skill and knowledge from games based purely on chance.

The minister for the digital economy, Emmanuel Mallia, has published Legal Notice 271 of 2016, entitled the Fantasy Sports (Exemption) Regulations (S.L. 438.10), exempting fantasy sports from the requirement of a gambling licence issued in terms of the Lotteries and Other Games Act or the Remote Gaming Regulations.

In its ‘Position Paper on Digital Games of Skill with Prize’ published in December 2015, the Malta Gaming Authority (MGA) had stated that in view of the element of skill and knowledge involved in fantasy sports, such an activity should be differentiated from games of chance in terms of licensing and regulation.

This related specifically to fantasy sports where players choose virtual representations of real-life athletes, where the value and points attributed to an athlete reflect the athletes’ performance in actual sporting events, and where the outcome is determined predominantly by skill and knowledge rather than by chance.

MGA had stressed that such games would still warrant regulatory intervention which is appropriate and proportionate to address the level of risk presented to the consumer.

The government had expressed its commitment to introduce legislation to regulate certain skill games which may present increased risks to the consumer.

It had notified the European Commission of the proposed Skill Games Regulations that would form part of the process for the MGA to roll out its licensing framework to regulate such skill-based games, including fantasy sports.

Until that is done, Legal Notice 271 will exempt fantasy sports from the requirement of a gambling license. In effect, during this temporary period and until the proposed regulatory framework for skill games is put into force, the MGA will closely monitoring these operations and evaluating potential risks to the consumer.

Companies and outlets offering fantasy sports may notify the MGA of their operations and, subject to meeting certain general conditions applicable under general law, the operator would be formally recognised by the MGA.