Guidance on the use of Innovative Technology Arrangements and the acceptance of Virtual Financial Assets and Virtual Tokens through the implementation of a Sandbox Environment

Regulatory sandbox framework issued by the Malta Gaming Authority (MGA) or the acceptance of Virtual Financial Assets (VFA) and Virtual Tokens and the use of Innovative Technology Arrangements (ITAs) within the gaming industry. The Sandbox framework has two phases (as set forth in the MGA press release of October 4, 2018.)

  1. As of January 1, 2019, the MGA will accept applications to the sandbox for the use of Distributed Ledger Technologies (DLT) assets (which consists of VFAs and Virtual Tokens, also which may use blockchain technology) as a method of payment.
  2. (Undated) The sandbox framework "will be extended to applications for the use of ITAs within the key technical equipment of licensees."

Introduction: This paper presents the Malta Gaming Authority’s (hereinafter ‘MGA’ or the ‘Authority’) position in regard to the acceptance of VFAs and the use of ITAs, including DLT platforms and smart contracts, by operators regulated by the MGA. More specifically, it identifies and examines the details of a regulatory sandbox. The sandbox will commence on 1 January 2019 for the purpose of the acceptance of virtual financial assets and virtual tokens, and last for a period of ten (10) months. For the purpose of leveraging innovative technology arrangements within a gaming operation, the regulatory sandbox will commence on such date as the MGA may establish in due course. If the MGA deems it appropriate, the duration of the sandbox may be extended further for a specified period, in whole or in part.

Contents
1 Context
1.1 Introduction
1.2 Pre-Publication Activities
1.3 Nature as a Living Document
1.4 Eligibility
2 DLT assets used by operators
2.1 Categorisation
2.1.1 VFAs
2.1.2 Virtual Tokens
2.2 Characteristics of wallets
2.3 Deposits
2.3.1 VFAs
2.3.2 Virtual Tokens
2.3.3 Outsourcing service providers
2.4 Wallet verification and withdrawals
2.4.1 Wallet verification
2.4.2 Withdrawals
2.5 Placing limits on players’ deposits in VFAs
2.6 Rate of Exchange
2.7 Additional reports
3 Innovative Technology Arrangements
3.1 General requirements
3.2 Hosting of essential components on DLT
3.2.1 Games and game components
3.2.2 Other essential components
3.3 Smart Contracts
4 Anti-Money Laundering and Counter Terrorist Financing
5 Location of Technical Infrastructure
6 Concluding remarks

Document Details

Document Type: 
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Year of Document: 
2018
Date of Document: 
Thursday, October 4, 2018
Document Authors: 
Malta Gaming Authority

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