Malta is a small island country in the center of the Mediterranean Sea whose society and culture have been shaped by centuries of foreign rule under Greek, Roman, British, and French conquerors. Today, it is an independent republic with a population of over 442,769 people and a membership in the European Union (EU).
After the passage of the Remote Gaming Regulations (S.L. 438.04) of April 2004, Malta became the first member state of the EU to regulate online gambling. The sector is now a major contributor to the local economy, which accounted for around 12% of the country’s Gross Domestic Product (GDP) in 2019.
Malta hosts approximately 10% of the remote gambling businesses worldwide, including household names like William Hill, Betway, and Unibet. Regulated by the Malta Gaming Authority (MGA), this industry employs over 9,000 people and contributed €1.56 billion to the local economy (a 9.6% year-on-year increase) in 2019.
Malta holds a strong appeal for gambling operators thanks to its low licensing fees and tax rates. With that said, all Maltese licensees must comply with MGA’s social responsibility policies. For the time being, Malta-regulated operators are permitted to advertise their products and services to players as long as they do so in a socially responsible manner.
The question arises will the Maltese regulator ban gambling ads altogether in the future and if yes, how will this impact the local gaming industry. Let’s have a look at the current gambling regulations and advertising policies in the country before we attempt to answer it.
Malta Overhauled Its Gambling Legislation in 2018
The Maltese gambling regulator has become stricter in recent years. Gambling businesses must meet various standards and have their operations closely monitored for violations, incompliance, and frauds.
The country overhauled its gambling laws with the passage of the new Gaming Act (L.N. 242 of 2018) in August 2018.
It broadened MGA’s regulatory scope and consolidated the regulation of all gambling activities under a singular piece of legislation. Remote gambling businesses looking to operate in and from Malta can apply for several types of permits:
Class 1 remote gaming licenses are issued to operators who conduct chance-based games that use random number generation for their outcomes. Examples include video slots, casino table games like roulette, lotteries, and scratchcards.
Class 2 remote gaming licenses are intended for gambling operators who offer bets on singular-event markets, including standard fixed-odds and pool wagering.
Class 3 remote gaming licenses are granted to businesses that organize player-versus-player wagering. Such operators do not take part in the risk but rather charge players a commission for their services. Common examples include betting exchanges and poker rooms.
Class 4 remote gaming licenses are intended for software providers looking to supply their products to Malta-licensed gambling operators who hold any of the above-listed permits.
The vast majority of Malta-licensed gambling businesses belong to the remote sector. Figures provided by market research portal Statista show the island country was home to 287 online gambling operations in 2019, whereas the number of locally licensed gambling parlors stood at 56 only.
|Number of MGA Gambling Licensees from 2016 to 2019|
|Year||# of Remote Gambling Licenses||Gaming Parlors||Landbased Casinos||Bingo Houses|
Only businesses based in the EU or the European Economic Area (EEA) can apply for and receive gambling licenses from the Malta Gaming Authority. MGA permits have a validity of ten years, with the option for renewal afterward. License fees vary based on the type of gambling service on offer and the revenue the applicants have generated through it.
The fee caps range from €5,000 to €600,000 depending on the type of permit. The licensees are subject to a 5% gaming tax on the gambling revenue generated from Maltese players. Slots enjoy the highest popularity among customers of Malta-licensed gambling sites, generating over 74% of the revenue from type 1 gaming activities.
|Gambling Revenue Distribution for Type 1 Remote Gambling Activities in Malta for 2019|
|Casino Table Games||21.5%|
|Other Gaming Products||4.1%|
Relevant Gambling Advertising Legislation in Malta
The number of player accounts at MGA-licensed online gambling sites has seen consistent growth in recent years. New registrations reached a staggering 13.8 million in 2019, while the number of active player accounts stood at 20.4 million. Various responsible gambling measures are in place to protect this constantly growing customer base, including age and advertising restrictions.
In 2018, the MGA unveiled new guidelines for gambling advertising all locally licensed operators must abide by. The marketing of gambling products and services is subject to the provisions of Subsidiary Legislation 583.09, otherwise known as the Gaming Commercial Communications Regulations.
|Number of Online Player Accounts at MGA-Licensed Gambling Sites from 2017 to 2019|
|Year||New Registrations||Active Player Accounts|
|2017||9.67 million||13.99 million|
|2018||12.35 million||18.14 million|
|2019||13.80 million||20.42 million|
Part III of the secondary legislation requires all MGA licensees to market their products in a socially responsible manner, with a special emphasis on protecting underage and vulnerable individuals from gambling-related harm. The advertisements must not encourage socially irresponsible behavior or present gambling as a means of solving one’s personal and financial problems.
The marketing materials should not propose that players’ skills can impact the results of games that rely solely on chance. The operators are also prohibited from sending unsolicited promotional materials to their customers and providing misleading information about the odds of winning.
Respectively, the operators should not make any attempts to induce customers to continue betting if they have clearly indicated they want to end their gaming sessions. Additionally, gambling marketing is prohibited in public places, including in public transportation. The law makes one exception for places frequented by tourists, such as airports, for instance.
In August 2019, the MGA set up the Commercial Communications Committee whose main task is to ensure compliance with Subsidiary Legislation 583.09 and observe for any potential breaches of the regulator’s guidelines for gambling marketing. The Committee reports all instances of noncompliance directly to the MGA.
Regulations on Gambling Advertising via Broadcasting Means
In addition to the above-listed regulations, Malta-licensed gambling operators who advertise via broadcasting means must comply with the Requirements as to Advertisements, Methods of Advertising, and Directions Applicable to Gambling Advertisements (Subsidiary Legislation 350.25).
MGA Penalties for Noncompliance with Gambling Advertising Laws
As one of the strictest regulatory bodies in the industry, the MGA does not hesitate to penalize gambling operators for failing to comply with its advertising guidelines. In 2020, the Maltese watchdog reminded its licensees to remain socially responsible when marketing their services during the novel coronavirus pandemic.
The regulator prohibited operators from exploiting and directly or indirectly referencing the disease in their marketing communications. The Commercial Communications Committee held 32 meetings in total and established that eleven advertisements and promotions violated the Commercial Communications Regulations.
Some breaches concerned advertisements on social media where the operators had failed to provide references to the terms of promotional schemes. Others had to do with ads that lacked the necessary disclaimers as required by local law.
After an extensive investigation, the Maltese gambling regulator issued nine administrative fines, canceled seven licenses, and ordered the suspension of two permits. The MGA collected €2.43 million from fines for the period between January and June 2020.
Gambling Advertising Regulations in Other Major European Markets
1Sweden’s Ministry of Finance calls for “special” moderation of gambling marketing
The MGA is hardly the only European regulator to recently toughen its stance on gambling-related advertisements. Sweden became one of the most recent examples after the Swedish Ministry of Finance released a proposal for the introduction of stricter rules on gambling advertising in June 2021.
The Ministry insists on special moderation in gambling marketing similar to that implemented for alcohol advertising. The measure aims to strengthen the level of customer protection and reduce problem gambling rates among Swedish residents. If approved, the proposal will come into effect in July 2022.
2Italy has a blanket ban on gambling advertisements
Another example of tougher advertising regulations comes from Italy. Gambling ads have been prohibited in the country since 2018 with the passage of Law 96/2018, which prohibited gambling operators from marketing their services on websites, television, radio, newspapers, or billboards across the country.
The Italian authorities further toughened their stance at the beginning of 2019, banning sponsorships and gambling ads during sports and cultural events. Operators who violate the rules risk being hit with heavy financial penalties.
In March 2021, the local communications authority AdCom issued a €50,000 fine against the Italian news website Il Giunco.net for publishing a marketing banner that linked to an affiliate website with an article on the best online casinos. According to the communications authority, the banner featured a call to action and promoted gambling sites. Additionally, the website of the affiliate linked to several online casinos.
3Scandinavian countries have partial restrictions on gambling ads
Norway is another European country to clamp down on gambling advertising. At the beginning of 2020, the country’s parliament introduced changes to the Norwegian Broadcasting Act that effectively prohibited unlawful gambling advertising on television. Finland has partially banned gambling marketing, while in Denmark gambling-related ads cannot contain direct invitations to bet or visit gaming sites and venues.
4No gambling ads on UK television or radio before the 9 pm watershed
In the UK, there is a whistle-to-whistle ban on gambling ads broadcast on television and radio. It is prohibited to show any gambling-related adverts during televised sporting events before the 9 pm watershed, including five minutes before a game starts and five minutes after it finishes.
Additionally, 90% of UK-licensed gambling operators agreed to voluntarily cease all radio and television advertising during the coronavirus lockdowns in 2020. The UK industry may see further restrictions in the future as a YouGov survey revealed 77% of the adult British public favor a total ban on gambling adverts on radio and television. The British Committee of Advertising Practice (CAP) has also proposed to ban celebrities and influencers from appearing in gambling ads.
Is Malta Likely to Impose a Total Ban on Gambling Adverts?
Similarly to other EU jurisdictions, Malta might see further restrictions on gambling adverts in an attempt to strengthen consumer protection and reduce the negative social effects of gambling addiction. However, some industry participants argue that a complete ban on gambling ads would violate the EU principles of freedom of service.
Previous attempts to enforce a prohibition of casino advertising in Malta have failed. One example comes from 2013 when the former editor of the Sunday Times newspaper, Lawrence Grech, filed an appeal against the country’s Attorney General, Finance Minister, Prime Minister, and Police Commissioner after being charged for publishing an advert that allegedly promoted the Maltese Oracle Casino.
The former editor argued the article in question was published for free in the newspaper’s social section and had to do with a Go Mobile promotion. Mr. Grech stressed that other local papers frequently published adverts for Maltese gaming venues and cited Malta This Month, a Malta Air in-flight magazine, as an example.
Justice Gino Camilleri upheld the editor’s appeal, arguing that a ban on gaming advertising restricted Mr. Grech’s right to freedom of expression. Malta-licensed gaming venues were readily accessible by local citizens and banning such ads was more of a “cosmetic gesture”. Gambling advertising was permitted in places frequently visited by tourists.
Justice Camilleri emphasized Malta residents could easily come in contact with such marketing materials targeted at foreign visitors, at airports, for example. Given all this, Maltese regulators might introduce further restrictions in the interest of socially responsible advertising but the country is unlikely to see a complete ban on gambling marketing in the years to follow.