“ Gaming regulation has allowed operators to provide their gaming services to end users in a safe and regulated space , which caters to player protection and anti-money laundering measures . Such regulatory measures are simply not available to end users whenever they engage with unregulated entities in the black market .”
— James Baldacchino , Head of Legal and Enforcement , Malta Gaming Authority
The White Label Route
Another alluring aspect of Malta for online gambling enterprises is that it gives companies holding local B2C certifications the right to extend their platforms to third parties via “ white label ” agreements .
This capacity helps to streamline established operational regulatory and compliance parameters while allowing such affiliated entities to launch iGaming domains of their own relatively quickly via the use of their associate ’ s master license . This ability moreover permits newbies to tangibly test their attendant business and marketing plans without having to fork out the large investment needed to establish and run a standalone remote gaming venture of their own .
Under this white-label model , fledgling iGaming operators agree to pay an initial integration / commitment fee in addition to minimum regular charges or royalties that could run to as high as 20 percent of their associated gross gaming revenues ( GGR ). This sees their offering become an extension of their larger partner ’ s platform while placing the onus for all regulatory compliance squarely at the feet of the ultimate license holder to leave the client primarily responsible for marketing and promotional activities .
“ There is obviously an element of risk for the license holder , and they need to make sure that prospective white-label partners are reputable and would operate or market their services within acceptable parameters ,” says Mifsud .
“ This is because they could be heavily fined by the Malta Gaming Authority or any other gambling regulator from which they may hold a license where they have a similar setup within . They could furthermore have their iGaming license suspended or even revoked should any of these partners fall foul of the licensee ’ s compliance obligations .”
Mifsud explains that the white-label route to market has often proven to be particularly attractive to smaller entities seeking to complement their existing marketing or affiliate activities via the launch of a Malta-licensed online gambling service . He concedes that this group is augmented by sufficiently resourced parties that have every intention of obtaining a license of their own but want to first dip their toes into the scene to speedily validate their proof of concept without undergoing a significant investment at the beginning .
“ The white-label model in Malta also allows larger groups interested in getting involved in the iGaming sphere to see the numbers and determine whether their ideas or assumed competitive advantage will work ,” Mifsud says . “ This is especially significant for entities situated in new jurisdictions that may be looking to regulate the online gambling space . The opportunity to work with a white-label provider allows such parties , who may sit in adjacent industries such as telecoms , to test their concepts slowly without having to go toe-to-toe with industry giants at a potential cost of hundreds of millions of dollars .”
The head of legal and enforcement for the Malta Gaming Authority , James Baldacchino , says his organization currently licenses 196 entities to offer B2C online gambling services . He says the current regime obliges any outsourced service provider not holding one of its certifications to conduct operations “ as if they were bound by the same regulatory instruments as the ultimate licensee .”
“ Firms operating under white-label arrangements are considered by law to be acting for and on behalf of Malta Gaming Authority-licensed entities with the onus being placed on the licensees to ensure that any services offered are done so in line with the regulatory framework ,” Baldacchino says .
“ Therefore , it is these licensees who are responsible for the actions of their white-label partners where the certification issued by the Malta Gaming Authority is concerned . In those instances where the services provided by an outsourcing entity are licensable in nature , such parties need to apply for their own licenses in order to deliver such services .”
Baldacchino says Malta was one of the first jurisdictions within the EU to implement an iGaming regulatory framework , and has since instigated several “ tweaks ” to ensure that such activities remain free from crime and are being offered in a safe , fair and transparent manner . He goes on to affirm that these changes have also encompassed measures to make sure minors and other vulnerable persons are adequately safeguarded .
“ Gaming regulation has allowed operators to provide their gaming services to end users in a safe and regulated space , which caters to player protection and anti-money laundering measures ,” Baldacchino says . “ Such regulatory measures are simply not available to end users whenever they engage with unregulated entities in the black market . Consequently , third parties providing non-licensable services under our regulatory framework in line with the requirements of the law are allowed to operate in a responsible and reasoned manner .”
Full-Service Providers
Established in 2016 as part of Soft2Bet Group , Maltix Limited is just one of
32 Global Gaming Business MAY 2023