Malta Gaming Authority defines the path for sweepstakes while California closes its market

The imminent ban of online casino-style sweepstakes in California has sent the industry searching for new strategies. With major suppliers like Play’n Go exiting the US market, the focus is shifting to regulated jurisdictions, placing Malta’s well-defined legal framework under a global spotlight.

The ban has triggered immediate strategic realignments within the sector. Play’n Go, a major game supplier with a base in Malta, announced it is ending its sweepstakes operations in the US to concentrate on European markets. This move highlights a broader industry trend of seeking stability in regions with established regulatory pathways.

As the industry looks for new hubs, the regulatory approach of Malta, a key European iGaming jurisdiction, becomes highly relevant. In a statement to iGamingCapital.mt, the Malta Gaming Authority (MGA) clarified that its legislation does not use the terms “sweepstake” or “contest.”

Instead, the MGA’s Gaming Definitions Regulations focus on the functional elements of a “game of chance,” defined as an activity whose outcome is determined “by chance alone or predominantly by chance.”

The Authority outlined a three-element test to determine if a license is required:

1.  The commitment of a stake by participants.

2.  An outcome that is predominantly based on chance.

3.  The outcome of the game is linked to a potential prize.

“If all three elements are present, and the game is offered in, from, or to Malta, it must be operated under an authorisation issued by the Malta Gaming Authority,”** the MGA stated. This functional assessment stands in contrast to the US legal debate, which has heavily centred on the concept of “consideration” and the role of AMOEs.

A potential pathway for a displaced Industry?

The MGA’s response indicates that there is no exemption from licensing for sweepstakes-style offerings that meet the “game of chance” criteria. This requirement for formal authorisation presents a clear, if rigorous, pathway for operators seeking legitimacy in a regulated market.

The strategic moves of companies like Play’n Go and Pragmatic Play – which recently launched a new sweepstakes platform while also maintaining a major presence in Malta – suggest that the island’s ecosystem is being viewed as a potential base for this strategic pivot. The MGA emphasised it remains “open to discussions with any entity seeking to operate under an MGA authorisation,” provided the legal requirements are met.

California’s ban underscores the volatility of operating in legally ambiguous environments. As the sweepstakes industry contracts in the US, the need for predictable and clear regulation becomes paramount for companies looking to sustain and grow their business.

While it demands full licensing compliance, Malta’s element-based framework also provides the legal certainty that the industry now desperately seeks, potentially positioning the island as a key jurisdiction for the next phase of the global sweepstakes market.