Malta’s long-awaited skill game regulations for fantasy sports are out, and US-fantasy sports giant DraftKings today announced that its subsidiary, DK Malta OpCo Ltd., has been granted a Controlled Skill Games Licence from the Malta Gaming Authority (MGA). The company revealed that it is in the process of establishing its operational base in Malta in order to tap the wider European market. With more than seven million registered players worldwide, DraftKings has experienced significant growth since it was founded in 2012 in Boston, USA, and is today one of the market leaders in the fast-growing fantasy sports sector. The hopes are high that the introduction of a dedicated skill games licence by the MGA, and the subsequent arrival of DraftKings on the island, will help Malta become the epicentre of a thriving fantasy sports sector.
New Skill Game Licence
January 2017 has seen the publication of the new skill games licence for fantasy sports operators, a sector that thus far had been largely unregulated, except where it was categorised as gambling. In fantasy sports, players compete against each other by building a team of athletes from a real-world sport. Based on the players’ statistical performance, they earn points and a cash pay-out. "Malta’s intention to regulate digital skill games with a prize was first announced in December 2014 when the MGA published a consultation document. From then onwards, the MGA sought the input of various industry stakeholders and experts in order to develop a framework which facilitates the development of the sector, while ensuring adequate protection for players and fairness of the games”, said Joseph Cuschieri, Executive Chairman of the Malta Gaming Authority.
Joseph Cuschieri, Executive Chairman of the MGA
Malta: A European Base
DraftKings is the world’s largest skill-based Fantasy Sports (FS) platform, allowing players to compete in daily or weekly Manager Game-type online contests across the largest variety of professional sports, including seven leagues of Football (soccer), North American Sports (NFL, MLB, NBA, NHL, CFL & NASCAR), Mixed Martial Arts, Golf (PGA & European Tour) and eSports. The Skill Games Licence from the MGA will enable DraftKings to operate in Malta and a number of other European countries. DraftKings intends to begin offering fantasy sports contests in some markets in the first quarter of 2017, with additional countries to follow.
“We are excited to embark on this important phase of our international expansion,” said DraftKings co-founder and CEO Jason Robins. “We are pleased that Malta has recognised the need for special regulation of certain skill based games such as online fantasy sports, which are an important and growing sector of the digital economy. The Malta Gaming Authority has been a terrific partner in terms of depth of analysis, appreciation of DraftKings’ product and examining how our system is built to provide maximum enjoyment and peace of mind to our customers. We take pride in being regulated by this Authority.”
Jason Robins, DraftKings co-founder and CEO
Jeffrey Haas, DraftKings’ Chief International Officer, explained in an interview with MaltaProfile that the company will first base its regulatory and compliance function in Malta. “The intention is to grow from there with customer service, fraud, payments, and localisation functions coming online as the business develops. At the moment, we are just getting started and in the process of staffing up. We are taking our initial steps, but our expectation is to be investing a lot in Malta over the years to come.”
DraftKings move into Malta comes nearly a year after it began successfully operating in the United Kingdom. In 2016, the company saw year-to-year growth of 20 percent, and a twelve-fold increase since 2014. In the United Kingdom, DraftKings has averaged nearly 20 percent month-over-month growth of its user base in the first nine months of operation, outpacing the growth curve of the US launch for the same time period.