Social Gaming

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As a relatively new frontier in the gaming industry, social gaming covers playing activity by way of social interaction or the use of social networks, as opposed to player activity in solitude. With reference to current operations, social games include card games involving multiple players, board games and multiplayer video games.

The Social Gaming Industry in Malta and Cyprus

In addressing the changing interest of players, an increasing number of operators are seeking to explore this class of gaming. In view of this increasing interest in social gaming in the past years, Malta has worked to provide an alternative and advantageous solution to social games providers and today plays  host to a good number of the biggest players in this industry, including King.com, Codemasters, Bigpoint and Exient. Indeed, Malta is one of the fastest growing information and communications technology markets in Europe, enjoying its position as a niche for ground breaking technological solutions. With its reliable laws, and a sound tax regime which provides a number of fiscal advantages and a stable environment, Malta is rapidly continuing its growth as a hub for e-commerce,digital gaming and online gambling.

Cyprus is no stranger to the global phenomenon of the social gaming either, which is gradually developing within its shores. 

Operator-centric Legal Framework

Whilst Malta has been one of the first jurisdictions to regulate iGaming, its legislation has always been clear and unambiguous, and meticulous in explaining that pay-to-play games and skill games awarding a prize are not licensable, whilst games having an element of chance and awarding a prize are licensable. This has attracted a number of operators to relocate to Malta to take advantage of its fiscal environment, and enjoy legal clarity as to where their gaming operations stand vis-à-vis licensibility.

Malta, being at the forefront of such modern industries, is aware of the addictive effects that non-licensable social gaming, as well as all other forms of licensable gaming, can have on players. This is an unfortunate reality which affects people of all backgrounds and ages from all countries. Efforts have been made on an international scale towards regulating the industry as much as possible in order to curb addictions and under-age gaming. For this purpose, in late 2014, the Malta Gaming Authority (MGA) issued a consultation paper for the regulation of skill games awarding a prize. The scope of the consultation paper is to discuss with the industry itself the regulatory needs in this respect.

As an EU member state, Malta needs to implement the various EU directives which regulate on this matter, such as the Self-Barring Directive of 2011 which allows players to bar themselves from any land-based premises for a stipulated amount of time.

Stable and Reliable Environment

The growth of the social gaming industry in Malta has been facilitated by the tandem growth of ancillary services, such as ICT, telephony, co-location legal and back office services. All this, coupled with a sound regulatory regime, has positioned Malta as a one-stop destination for the social gaming industry. Malta’s added advantage is the fact that it is an onshore jurisdiction. Maltese operators do not face the difficulties that offshore operators face with exchange controls, access to capital markets and access to e-wallets and payment gateways worldwide. Players find comfort in knowing that they are dealing with an onshore jurisdiction whose legislation is in line with the applicable EU legislation and international agreements.

These benefits are supported by the fact that Malta has a stable economy, which has weathered financial crisis and still managed to register financial growth.



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Dr Silvana Zammit

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