Second Phase of Sandbox Framework Launched by MGA

Applications to Start Being Accepted

Dr. Silvana Zammit | Published on 19 Sep 2019

2nd phase  Sandbox Framework

The Malta Gaming Authority (MGA) announced the launch of the second phase of the Sandbox Regulatory Framework earlier this month, where applications to use Innovative Technology Arrangements (ITAs), such as Distributed Ledger Technology (DLT) and smart contracts, will start to be accepted by the authority.  

First Phase of the Regulatory  Sandbox Framework

The implementation of the second phase follows the initial stages of the framework whereby, as of the beginning of this year, it was confirmed that operators may be allowed to use Virtual Financial Assets (VFAs) as a means of payment. 

Further Developments 

The MGA also announced the extension of the Sandbox Regulatory Framework until the end of the year 2021, as well as the updating of the guide on ITAs and VFAs in order for it to remain relevant amidst recent developments within the sector.  Similarly, the Licensee Relationship Management System (LRMS) has also been amended to state that licence holders must seek the approval of the MGA in order to be able to implement ITAs. 

Requirements for Sandbox Framework and ITAs 

In accordance with the Innovative Technology Arrangements and Services (ITAS) Act (Chapter 592 of the Laws of Malta), it is required that ITAs be audited by MDIA-registered auditors.  The resulting audit report must be of a positive nature and the MGA must be satisfied with the legal requirements set, in order for the MGA to accept such ITAs. 

The applicant must also hold a relevant licence issued by the MGA in order to be able to take part in the Sandbox Regulatory Framework, as well as adhere to other legal requirements such as the Virtual Financial Assets Act (Chapter 590 of the Laws of Malta). 

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