Global Law Experts Logo
GLE-PP

Find a Global Law Expert

Specialism
Country
Practice Area
awardsr

Awards

Since 2010, the Global Law Experts annual awards have been celebrating excellence, innovation and performance across the legal communities from around the world.

The Technicalities of the Malta Gaming Authority’s DLT Sandbox Framework

posted 6 years ago

The nation
of Malta has led the way with its blockchain regulations
and has encouraged its other major authorities to embrace the technology. The
Malta Gaming Authority is a leading regulator of online and land-based gambling
and has recently published its guidelines to move towards accepting virtual
financial assets and distributed ledger technology within the gaming industry.

The Malta
Gaming Authority announced in March 2018 that they would be creating methods of
welcoming distributed ledger technology and cryptocurrencies into the gaming
industry. They announced that a licensing system would be established alongside methods of using wallets of digital
currency at gaming websites and a way of calculating exchange rates. It was at
this time that the Malta Gaming Authority announced their plans to create a
sandbox testing environment in which developers could test their games to see
if they are in line with the upcoming regulations of the Malta Gaming
Authority.

In October
2018, the Malta Gaming Authority released its guidelines for the framework that
they had created to assist the budding technology in the gaming industry.



The Malta Gaming Authority releases
its sandbox framework

The announcement detailed the two phases of the framework. Phase one is set to commence on the
1st of January 2019, at which point the Malta Gaming Authority will
be accepting applications from bodies within the gaming industry looking to
allow the use of virtual financial assets and virtual tokens as a means of
payment. In phase two, their framework will be extended to allow for
applications from those looking to use innovative technology arrangements, such
as distributed ledger technology, within the key technical equipment of
licensees: this is to coincide with further developments made by the
established Malta Digital Innovation Authority. The Malta Gaming Authority is
expecting the sandbox framework to continue until October 2019, but the paper
is to be considered as a live document so that the regulatory requirements
initially envisioned can be changed to adapt to technological and regulatory
developments if necessary.

Even if an
applicant fully complies with the Maltese blockchain legislation, they must
still obtain a license from the MFSA before being granted access to the sandbox
framework. Furthermore, applicants can apply for the inclusion of their testnet within the sandbox framework should
their live environment go live within the three months following their approval
by the Malta Gaming Authority.

The Malta
Gaming Authority have established criteria
as to how to define virtual assets and the steps required to use assets from
distributed ledger technology. Prior to
the involvement of the Malta Gaming Authority, an operator shall need to
undergo a Financial Instrument Test that is issued by the Malta Financial
Services Authority to be able to determine the nature of the distributed ledger
technology asset, be it a virtual financial asset or a virtual token. Once this
has been established, the operator shall
submit the Malta Financial Service Authority’s findings with other appropriate
documentation to the Malta Gaming Authority as a stage of the application
process to be approved for the sandbox.



Regulating the use of virtual
financial assets

If the asset
is deemed to be a virtual financial asset, it adheres to established statutes
of Maltese law. Operators can then use virtual financial assets that are
overseen by the Malta Financial Services Authority in accordance with the Virtual Financial Assets Act. Those deemed
to be financial instruments, per the Investment Services Act, or electronic
money, per the Financial Institutions Act, can only be accepted as a method of
payment if they are specifically approved by the Malta Gaming Authority, which
shall be decided on a case-by-case basis
at the Authority’s discretion.

When users
sign-up to gaming websites with the intent to use virtual financial assets,
only wallet addresses that are specifically tied
to the individual will be permitted
within the gaming ecosystem. Once the wallet has been recognised, for a deposit
of virtual financial assets to be successful, the operator must verify the individual’s
details and their wallet. Once verification is complete, players receive their gaming
funds. Withdrawals can only be performed
to verified wallets, and if a pending transaction does not match the player’s
verified wallet address, funds will be returned to their point of origin or
shall be frozen.

The operator
must clearly identify and forewarn all players to withdrawal and deposit
transaction fees should these exist on their platform. Within the operator’s
ecosystem, virtual financial assets and fiat currencies shall be treated as separate entities, with an
exchange between the two not permitted. For the sandbox framework, the exchange
rate applied shall adhere to that of the virtual financial asset exchange
declared to the Malta Gaming Authority by the operator. The exchange rate shall
be taken for the virtual financial assets
permitted against the Euro (€) at the time of 12:00 Central European Time on
the last day of the reporting month with the taken exchange rate unable to
change throughout that same reporting
month. However, exchange rates can change from reporting month to reporting
month. Operators shall enforce a maximum deposit to the value of €1000 in
virtual financial assets per month.



Regulating the use of virtual tokens

The use of
virtual tokens shall also be decided on a case-by-case basis by the Malta
Gaming Authority: a decision which is guided by their distributed ledger
technology economics criteria as well as an evaluation of token’s technology,
the company’s structure, human resources, market applications, and security.
Registered players can acquire virtual tokens from the operator on the
operator’s platform for use on the platform. Virtual tokens can purchased with the use of fiat money as long as
withdrawals following the use of the virtual tokens can also be made in fiat
currency at the same rate of exchange as they
were initially acquired.



Regulating the use of innovative
technology arrangements

During the
operation of the sandbox framework, the Malta Gaming Authority shall be
accepting games and components of games that are
fully or partially hosted in a distributed ledger environment, but these
technologies shall also be subject to an audit. Other essential components
hosted on distributed ledger technology will also be accepted if the Malta
Gaming Authority is satisfied by the technology’s compliance with regulation
and is successful in an audit.

Approval
from the Malta Gaming Authority and inclusion within the sandbox framework is required of any operator seeking to make use
of innovative technology arrangements as a part of its key equipment, and each
element of innovative technology arrangements shall be audited by registered auditors of the Malta Digital Innovation
Authority. The technology is only accepted if the audit report concludes with a
positive outcome and the Malta Gaming Authority is satisfied that its
regulatory requirements will be adhered to by the operator.

Smart contracts will only be permitted if: the smart contract’s code is
reviewed by an audit; necessary amendments are made following the results of
the audit; necessary safeguards are put in place to protect the transferred
assets; revocation of a smart contract can occur should a flaw generated in the
code be discovered; and wallet verification is part of the player’s identity.
The main focus of the Malta Gaming
Authority, with regards to smart contracts, is where the funds placed in escrow during a contract are held by the smart
contract.

According to the Malta Gaming Authority’s Guidelines on Technical
Infrastructure Hosting Gaming and Control systems, hosting architecture must be
located within the nation of Malta, a European Union member state, or a member
of the European Economic Area to ensure that the same principles are upheld,
which would seemingly exclude the use of public distributed ledger technology
platforms.
But
applications to the sandbox framework using such technology will not be
scrutinised for not abiding by these guidelines. To gain a license, however, the
operator of this technology will need to establish a node in Malta to adhere to
requirements.

Once
approved by the Malta Gaming Authority, the licensee will be rewarded with a dynamic seal, acknowledging
that they are a participant of the sandbox framework.

 

Author

Find the right Legal Expert for your business

The premier guide to leading legal professionals throughout the world

Specialism
Country
Practice Area
LAWYERS RECOGNIZED
0
EVALUATIONS OF LAWYERS BY THEIR PEERS
0 m+
PRACTICE AREAS
0
COUNTRIES AROUND THE WORLD
0

Join

who are already getting the benefits
0
Sign up for the latest legal briefings and news within Global Law Experts’ community, as well as a whole host of features, editorial and conference updates direct to your email inbox. Naturally you can unsubscribe at any time.

Online Casino Reviews

  • Freeroll Poker Tournaments For Real Money
  • Australian Online Casino Real Money
  • Best Slot App To Win Real Money
  • Online Casino Real Money Australia
  • Best Paying Online Pokies
  • Wizard Of Oz Online Slots
  • All Slots Casino Mobile
  • Best Online Poker App Real Money
  • Best Online Casino To Play Roulette
  • Is Online Casino Legal
  • Online Casino That Accepts Paypal
  • Play Roulette For Real Money
  • Slot Apps To Win Real Money
  • Real Money Slots Online Usa
  • Safe Online Casino
  • Wizard Of Oz Slots
  • Real Online Pokies Nz
  • Biggest Online Casino In The World
  • Online Casino Pay With Paypal
  • Online Casino That Accept Paypal
  • Online Casino Canada Real Money
  • 3 Card Poker Online Real Money
  • Online Slots Real Money Canada
  • Best Online Poker Sites For Real Money
  • Real Money Poker App Android Usa
  • How To Make Money From Online Casino Bonuses
  • Real Money Poker App Iphone
  • How To Play Blackjack Online For Real Money
  • Best Slots To Play
  • Top 10 Online Pokies
  • Best Poker Apps Real Money
  • Online Casino Legal
  • Best Payout Online Casino Uk
  • Win Money Online Slots
  • Online Poker Nj Real Money
  • How To Win Online Slots
  • Casino Gaming License
  • Play Real Pokies Online
  • Blackjack Sites For Real Money
  • Real Money Casino Games For Android
  • Best New Online Slots
  • Flaming 777 Slots Games
  • Online Blackjack With Live Dealers
  • How To Play Online Slots
  • Facebook Casino Games Real Money
  • Online Casino With No Minimum Deposit
  • How To Beat Online Slots
  • Online Casino License
  • The Big Payback Slots
  • Royal Vegas Online Casino Withdrawal
  • Online Casino Minimum Deposit 5
  • Online Pokies Real Money Australia
  • Las Vegas Usa Online Casino
  • Real Money Poker App Android
  • Wheel Of Fortune Slots
  • Game Of Thrones Slots
  • Online Poker Real Money Usa Legal
  • Best Online Casino European Roulette
  • Blackjack Online Real Money Paypal
  • Online Video Poker Real Money Usa
  • How To Create An Online Casino
  • Lucky Nugget Online Casino Mobile
  • How To Withdraw Money From Online Casino
  • Platinum Play Online Casino Download
  • Online Casino For Usa Players
  • Best Online Casino Usa Real Money
  • Online Roulette Real Money Usa
  • Best Real Money Poker Sites
  • Android Slots Real Money
  • How To Start An Online Casino Business
  • How To Start An Online Casino
  • How To Start An Online Gambling Site
  • Best Online Casino For Blackjack
  • Play Baccarat Online For Money
  • Online Pokies New Zealand
  • Best Slots To Play At Golden Nugget
  • Slots Of Vegas Online Casino
  • Best Online Pokies Site
  • How To Beat Online Roulette
  • New Zealand Online Pokies
  • Online Poker Mobile Real Money
  • Which Online Slots Payout The Most
  • Is Online Casino Legal In India
  • Online Casino Software For Sale
  • Best Online Casino For Craps
  • Hard Rock Casino Slots
  • Win Real Money Online Pokies
  • Online Casino With Highest Payout Percentage
  • Poker Apps With Real Money
  • Online Roulette Real Money Review
  • Full Tilt Poker Real Money
  • Online Casino 5 Dollar Minimum Deposit
  • Online Roulette With Real Money
  • Best Online Roulette For Real Money
  • I Migliori Casino Online Italiani
  • Best Payout Online Slots
  • How To Play Baccarat Online
  • Play Casino Card Game Online
  • Play Blackjack Online For Real Money
  • Best Paying Online Slots
  • Casino License Cost
  • Online Poker Real Money California
  • Safe Online Casino Australia
  • Online Roulette Australia Real Money
  • Online Poker Real Money Texas
  • Online Roulette Real Money Paypal
  • Online Slots Australia Real Money
  • Golden Nugget Online Casino Review
  • Casino Games To Win Real Money
  • Online Pokies Australia Real Money
  • Online Gambling Blackjack Real Money
  • Win Real Money Playing Slots
  • How To Win Roulette Online
  • Aristocrat Pokies Online Real Money
  • Hollywood Casino Online Slots
  • Play Online Keno For Real Money
  • What's The Best Online Casino
  • Triple Double Diamond Slots
  • Play Roulette Online With Real Money
  • Roulette Online For Real Money
  • Play Roulette Online Real Money
  • Best Online Pokies Real Money
  • Big Red Pokies Online
  • How To Win At Online Blackjack
  • What Is The Best Online Roulette Site
  • Real Money Online Pokies
  • Spin To Win Slots
  • Ruby Slots Online Casino
  • Wheel Of Fortune Online Casino
  • Spin Palace Flash Casino Online
  • Online Poker Real Money App
  • Online Casino With Paypal Deposit
  • How To Win At Online Roulette
  • Can You Win Real Money On Slot Apps
  • Is Ignition Casino Safe
  • Online Casino Blackjack Real Money
  • Online Casino Win Real Money Usa
  • How To Make Money Online Casino
  • Online Casino Real Money Reviews
  • Slot Games To Win Real Money
  • Jackpot City Online Casino Download
  • Online Pokies Real Money
  • Casino War Online Real Money
  • Online Casino No Minimum Deposit
  • Play Wheel Of Fortune Slots Online
  • Best Online Casino Game To Win Money
  • Online Casino Without Wagering Requirements
  • Online Slots For Real Money Usa
  • Legal Online Casino Australia
  • How Do Online Slots Work
  • Best Online Casino For Us Players
  • Online Play Casino Roulette Game
  • Online Blackjack Real Money Australia
  • Real Casino Games Real Money Online
  • Online Slot Machines Real Money Paypal
  • The Best Online Casino For Roulette
  • What Online Casino Pays Out The Most
  • Start Your Own Online Casino
  • Legal Online Casino
  • Online Live Roulette Casino Game
  • Playing Blackjack Online For Real Money
  • Online Penny Slots Real Money
  • Best Online Blackjack For Money
  • How To Win Online Roulette
  • Real Money Poker Sites Usa
  • Best Time To Play Slots
  • Online Keno For Real Money
  • Best Payout Online Slots Uk
  • Online Slots Real Money Reviews
  • Best Online Pokies Nz
  • What States Allow Online Gambling
  • Best Real Money Poker App
  • Online Slots To Win Real Money
  • Real Money Slots App Iphone
  • Jackpot City Flash Casino Online
  • Ignition Casino Legit
  • All Star Slots Casino
  • How To Play Online Casino
  • Real Time Gaming Slots
  • Online Video Poker Real Money
  • How To Play Roulette Online For Money
  • How To Win On Online Slots
  • Age Of Gods Slots
  • Online Real Casino Money Games
  • Best Online Slots To Play
  • Online Poker California Real Money
  • Is Jackpot City Casino Legit
  • How To Win At Online Slots
  • Play Poker For Real Money
  • Safe Online Pokies Australia
  • Best Way To Play Slots
  • How To Play Casino Online
  • Play Online Roulette For Money
  • Online Casino Australia Real Money
  • Which States Allow Online Gambling
  • Play Keno Online Real Money
  • How To Win Online Blackjack
  • Online Blackjack With Real Dealers
  • How To Open Online Casino
  • What Are The Best Online Slots To Play
  • Big Win Casino Slots
  • Spin Palace Online Casino Australia
  • Best Slots To Win On
  • Casino Slots Win Real Money
  • Slots Magic Online Casino
  • Blackjack Online For Real Money
  • Slot Machine App Win Real Money
  • Online Casino Not Paying Out
  • Slots That Pay Out Real Money
  • Online Pokies Australia Reviews
  • Online Casino Minimum Deposit 1
  • Jackpot City Online Casino Review
  • Live Dealer Baccarat Online Casino
  • Online Casino Apps For Android
  • Online Casino Paypal Deposit Australia
  • Online Casino With Live Dealer
  • How To Play Blackjack Online
  • Slots To Win Real Money
  • Wheel Of Fortune Online Slots
  • Play Quick Hit Slots Online
  • Can You Count Cards In Online Blackjack
  • Palace Of Chance Online Casino
  • How To Play Roulette Online
  • Good Slots To Play
  • Which Online Casino Pays Out The Most
  • Heart Of Vegas Casino Slots
  • Best Online Casino For Canadians
  • Australian Online Pokies Real Money
  • Mohegan Sun Online Casino Nj
  • Online Casino Live Games Best Uk
  • Best Online Casino Australia Reviews
  • Play Pokies Online Real Money
  • Best Online Casino For Usa Players
  • How To Win Online Casino
  • Play Blackjack For Real Money
  • Best Slots On Bovada
  • Online Keno Real Money Usa
  • Online Slots Real Money Paypal
  • Best Poker Sites For Real Money
  • Safe Casino Sites
  • The Best Online Slots
  • Play Keno For Real Money
  • Real Online Pokies Australia
  • Queen Of The Nile Slots
  • Mummys Gold Casino Online Casino
  • Play Keno Online For Real Money
  • Best Poker Websites Real Money
  • Lucky Nugget Online Casino Download
  • Best Online Casino For Roulette
  • Play Roulette For Money Online
  • Video Slots Mobile Casino
  • Best Time To Play Online Slots
  • Best Real Money Online Poker
  • Play Blackjack Online With Friends
  • Play Baccarat Online For Real Money
  • Is Silver Oak Casino Legit
  • Big Fish Casino Real Money
  • Can You Win Real Money On Caesars Slots
  • Game Of Thrones Slots Casino
  • Best Online Slots Payout Percentage
  • Play Online Pokies For Real Money
  • Play Pokies Online Australia
  • High 5 Casino Real Slots
  • The Best Online Pokies
  • Online Pokies That Accept Paypal
  • Heart Of Vegas Slots
  • How To Play Online Roulette
  • Best Poker App Real Money
  • Best Online Casino Fast Payout
  • Best Slots At Wind Creek Casino
  • Online Casino 10 Minimum Deposit
  • Play Roulette Online For Money
  • Us Real Money Poker Sites
  • How To Win In Online Casino
  • Best Online Pokies Australia Review
  • Where To Play Roulette Online For Real Money
  • How To Beat Online Casino Slot Machines
  • Highest Payout Online Slots
  • Best Paying Online Casino Slots
  • Golden Tiger Online Casino Review
  • Online Casino With Live Dealers
  • Play Roulette Online For Real Money
  • Best Slots To Play At Casino
  • Slot Machine Games Win Real Money
  • Most Popular Online Casino Games
  • Casino Slots App Real Money
  • Online Casino Real Money Canada
  • Online Real Money Pokies
  • Online Roulette Game Real Money
  • Online Casino Roulette Real Money
  • Best Place To Play Roulette Online
  • Online Casino Book Of Ra Paypal
  • Online Blackjack With Real Money
  • Play Online Blackjack For Real Money
  • Is There A Slot Machine App For Real Money
  • Royal Vegas Online Casino App
  • Best Casino Slots To Play
  • Most Popular Online Slots
  • Best Way To Win At Slots
  • Slots You Can Win Real Money
  • Play Roulette Online Real Money Usa
  • Online Casino Real Money Paypal
  • Online Casino Australia Legal
  • Treasures Of Troy Slots
  • Online Casino For Us Players
  • Where Can I Play Blackjack Online For Real Money
  • Online Casino Paypal Book Of Ra
  • Online Roulette For Real Money
  • Best Online Blackjack Real Money
  • Poker App For Real Money
  • Jackpot Magic Slots Facebook
  • Best Online Casino Real Money Usa
  • Best Online Casino New Zealand
  • The Four Kings Casino And Slots
  • How To Play Slots Online
  • Best Online Pokies Australia
  • Usa Online Slots Real Money
  • Real Money Casino Android App
  • Online Slot Machines That Pay Real Money
  • Online Pokies Real Money Nz
  • Online Pokies Real Money App
  • Play Igt Slots Online
  • Best Casino Slots To Win Money
  • Online Casino Business For Sale
  • Play N Go Slots
  • Poker Apps For Real Money
  • Lucky Slots Real Money
  • All Slots Online Casino
  • Best Online Pokies Real Money Australia
  • Online Pokies Win Real Money
  • Best Online Casinos For Roulette
  • Pay Slots For Real Money
  • Best Online Poker Real Money
  • Slots App Win Real Money
  • Play Online Roulette For Real Money
  • Is Ignition Casino Legit
  • Wheel Of Fortune Slots Online
  • Lotsa Slots Real Money
  • Video Poker Online Real Money
  • Online Slots Usa Real Money
  • Play Blackjack Online Real Money
  • Jackpot City Online Pokies
  • Video Slots Online Casino
  • Is 888 Casino Legit
  • Online Slot Games That Pay Real Money
  • Prepaid Visa Card Online Casino
  • How To Stop Online Gambling
  • Best Slots To Play Online
  • Online Blackjack For Real Money
  • Slot Apps For Real Money
  • Mobile Slots Win Real Money
  • Newsletter Sign Up

    About Us

    Global Law Experts is dedicated to providing exceptional legal services to clients around the world. With a vast network of highly skilled and experienced lawyers, we are committed to delivering innovative and tailored solutions to meet the diverse needs of our clients in various jurisdictions.

    Social Posts

    See More:

    Contact Us

    Stay Informed

    Join Mailing List

    GLE