The Malta Gaming Authority (MGA) issued a controlled skill games (CSG) license to fantasy sports platform provider Oulala.
The new license category launched in February this year, with DFS operator DraftKings the first to receive a license. DraftKings will use its Maltese license to launch daily fantasy sports in Germany.
Oulala’s licence is the first CSG license to go to a DFS platform that is also a business-to-business provider. It will now be able to offer its fantasy sports platform more widely. The focus will be operators in European Union member states wherever DFS is allowed.
Benjamin Carlotti, one of Oulala’s co-founders and current managing director said:
“The authorities in Malta were the first in foretelling the impact of DFS’s potential in Europe, and the MGA was in fact the first regulator to acknowledge our needs. We are incredibly proud to be participating in the development of a licensing framework that regulates skill-based games, fantasy sports included.
This was a highly significant step in the right direction, and our hope is that other European regulators will soon follow suit.”
Skill game license are expected to be a growing business
The MGA launched CSG licenses as a way of serving a market need that other regulators have been slow to address.
The licenses handle games at the blurred boundary between social gaming and gambling. It’s an area where the MGA believes regulation is required. But it is needed at a lower and less burdensome level than is needed for traditional gambling games.
Controlled skill games are those where games are predominately based on skill, but where there is a large enough element of luck to lend themselves to an element of gambling.
MGA Executive Chairman, Joseph Cuschieri said:
“Malta’s regulatory framework ensures a high standard of player protection and game fairness whilst allowing operators space for growth and innovation. It is for this reason that operators such as Oulala have chosen Malta as their primary place of establishment.”
The less intrusive regulatory regime is likely to be attractive to operators that specialize in such games and don’t need the full gambling license offered by the MGA.
In other EU jurisdictions such as the UK and France, DFS operators need to comply with all the requirements of a full online gambling license.
The CSG license retains key consumer protections
The CSG license may be light touch, but it retains the primary consumer protections of standard gambling regulation.
The MGA explained:
“The licence is valid for five years, and is subject to a number of requirements, including a procedure to ensure that the persons behind the business are fit and proper, financial and system auditing to ensure that the operation is fair, sound and secure, and other measures to prevent fraud and money-laundering, a consumer-centric approach to the business, a high level of information security and segregation of player funds.”
CSG license holders must also pay administrative fees, license fees and taxes set at five percent of gaming revenue.
Oulala offers a turnkey package to online gambling operators
The UK Gambling Commission already licenses Oulala. It operates in Italy through a deal with Game Interaction Group Ltd (GIG).
Benjamin Carlotti is confident that existing sports betting operators are increasingly looking to third-party providers such as Oulala to add DFS to their product range. The Oulala platform allows them to do this with minimum risk.
He points out that games such as DFS are particularly popular with the millennial demographic. From a long-term business perspective, it’s important to give this market segment the social gaming style products they expect.
“The millennial generation is expecting social skill games, so the iGaming sector must realize that adding DFS games to their list of products will only be beneficial for them in the long run.”
Oulala DFS uses big data to increase the element of skill
Oulala’s implementation of DFS differs from the DraftKings and FanDuel models. It uses “big data” to offer many more variables that players can use when selecting their fantasy soccer teams.
Over 70 different criteria are available for players to analyze. That’s compared to the 5 to 16 available on competing DFS platforms.
There is also a “live coaching” feature that allows users to make real-time changes to their fantasy lineups.
Oulala argues that differences make its DFS “arguably the most realistic fantasy football game currently on the market.”
Oulala also states that the two features substantially reduce the role of luck, and increase the element of skill. That’s something that makes their version of DFS more attractive to some.