Issue link: https://maltatoday.uberflip.com/i/1034189
The Malta Gaming Authority has reinforced its strategy to be at the forefront of gaming regulation whilst embracing innovation and acknowledging that a prudent approach in this area is both sensible and required maltatoday | SUNDAY • 30 SEPTEMBER 2018 GAMING BLOCKCHAIN G10 VIRTUAL Financial Assets (VFA) and their underlying technology, Distrib- uted Ledger Technology (DLT), also known as Blockchain, are amongst the most recent disruptive phenomena in the technology arena. The hype around their potential as a disrupter has been intense, with many industry experts claiming the technol- ogy has the power to revolutionise the way many industries do business. With this in mind and cognizant of the rapid rise of interest from gaming operators to leverage VFAs and DLT in their operations, the Malta Gam- ing Authority (MGA) has reinforced its strategy to be at the forefront of gaming regulation whilst embracing innovation and acknowledging that a prudent approach in this area is both sensible and required. The MGA's journey on this front has been underpinned by the Authority's regulatory ethos, which is designed to ensure a gaming ecosystem that enables the introduction of new tech- nologies whilst safeguarding players' rights, and ensuring that gaming is fair and free from crime. Within this context, for the last two years, the MGA has kept a watch- ful eye on the ongoing developments in the fields of DLT and VFAs, con- sonant with national policy, and has taken a proactive approach in educat- ing itself around the benefits and the risks pertaining to them, to properly understand how to permit the con- trolled introduction of these technol- ogies in the gaming sector, achieving the right balance between embracing innovation and ensuring regulatory compliance. In this respect the Authority under- took to develop a stringent additional regulatory framework, to complement and enhance existing gaming regula- tion, within which licensed operators would be allowed to accept VFAs as a method of payment, or to make use of DLT, in various forms, as part of their technical systems. In order to design this framework, as early as December 2017, the MGA issued a call for interested parties to share their expertise and details of projects they were undertaking in the fields of DLT and Virtual currencies. The sizeable interest and contribu- tions forwarded to the Authority, together with the studies which the MGA had commissioned in relation to the risks which may affect the sec- tor, provided the necessary insight for the Authority to draw up, with the assistance of DLT experts, a draft framework which was issued for pub- lic consultation in March 2018. Feedback was once again forthcom- ing, with a number of interested par- ties contributing to the formulation of the guidelines. Simultaneous to this public consul- tation exercise, the MGA sought out to challenge and seek alignment of its proposed sandboxed framework with other relevant national stakeholders, such as the Malta Financial Services Authority (MFSA) and the newly es- tablished Malta Digital Innovation Authority (MDIA), to ensure align- ment on a national level such that the MGA's regulatory framework fits in with a holistic regulatory ecosystem across the various involved entities in the jurisdiction. Subsequent to a period of analysis and refinement the Malta Gaming Au- thority is now on the eve of publishing the details of its sandbox framework for the acceptance of VFAs and the use of DLT within the gaming indus- try. This will be done during the upcom- ing Delta Summit, taking place this coming week, between Wednesday and Friday, throughout which the Au- thority will be present to discuss with any parties interested in understand- ing the details of MGA's guidelines. The regulatory framework is intend- ed as a live document, and therefore it will be subject to potential refine- ments on an ongoing basis, stemming from any feedback which may be re- ceived throughout its duration, as well as technological and regulatory developments which may occur. It is envisaged that this sandbox framework will last until the end of October 2019, although its extension, wholly or partially, is not being ex- cluded. Heathcliff Farrugia is CEO of the Malta Gaming Authority Heathcliff Farrugia MGA's sandboxed guidelines for the gaming industry Virtual Financial Assets and Distributed Ledger Technology: