Remote Gaming In Malta

Published 6 Jan 2015

Remote Gaming In Malta

Introduction to remote gaming in Malta

Malta, being the first EU member state to regulate remote gaming, has successfully established itself as a leading, serious and well-regulated European online gaming jurisdiction. There has been a steady increase in the number of licensees operating in Malta during the last decade. In fact Malta currently hosts around 10% of the world’s online gaming companies and is home to some of the world’s largest and most profitable online gaming companies.

Benefits of gambling licence in Malta

  • Stable regulatory framework and sound reputation
  • Establishes a safe environment for players 
  • Game neutral and technology neutral 
  • Freedom of establishment and freedom to provide cross-border services within the EU 
  • Favourable company tax regime
  • Network of over 70 double taxation treaties 
  • Attractive gaming licensing fees 
  • Gives operators a competitive edge 

 Who needs a licence?

The remote gaming sector is regulated under the provisions of the Remote Gaming Regulations. The Lotteries and Gaming Authority (‘LGA’) is responsible for the governance of all forms of gaming in Malta, including remote gaming. 

Any person engaged in the carrying out of remote/online gaming activities in or from Malta must be licenced by the LGA to provide remote/online gaming operations, unless such person is already in possession of a valid licence which is recognised by the LGA. 

Intermediaries (also known as ‘skin’, ‘affiliate’ or ‘white label’) partnering with a licensee for marketing purposes do not need to be licenced (although notifications are required).

Licencing Framework

The LGA has a licencing framework based on 4 different classes, being:

Class 1 Licence

Required for operators managing their own risk on repetitive games (including casino-type games and online lotteries). It is also possible to have a Class 1 on 4 licence, whereby the Class 1 licensee operates its games on the software and in certain cases through the equipment of a Class 4 licensee).

Class 2 Licence

Required for operators managing their own risk on events based on a matchbook. Under this class, operators can offer fixed odds betting (including odds betting, pool betting and spread betting). It is also possible for operators to have a Class 2 on 4 licence, whereby the Class 2 licensee runs a remote betting office on an existing Class 4 licensee. 

Class 3 Licence

A licence to promote and/or abet remote gaming in or from Malta, where players on the network play against each other and operators takes a percentage of the rake for organising and promoting the game (including poker networks, peer-to-peer gaming, game portals). It is also possible to have a class 3 on 4 licence, whereby the operator uses a licenced Class 4 as its platform.

Class 4 Licence

A licence to host and manage remote gaming operators, excluding the licensee itself, whereby software vendors provide management and hosting facilities on their platform. In essence, this is a business-to-business gaming licence.

Licence Application Procedure

The Application process can be completed in as little as two months from the submission of a complete application. Furthermore, licences are issued for a period of five (5) years. On the expiration of the initial 5 year term, a licence may be renewed by the LGA for further five (5) year periods at a time. 

Phase 1: Online Gambling Licence Application

The prospective licensee submits an application form and provides detailed information about the proposed business and persons involved in the proposed operation. The prospective licensee must demonstrate that the company applying for the Malta remote gaming licence and all related stakeholders are ‘fit and proper persons’, and that it has the business and technical ability to carry out the operation.

Phase 2: LGA Audit And Inspection

The LGA will review the System Architecture and Application Architecture, rules of the games, playing procedures and operator’s procedure. Upon successful completion of Phase 2, a ‘Letter of Intent’ is issued which is in essence a provisional licence for 6 months.

Phase 3: Software Verification

During this phase, the licensee is expected to go live. The authority will closely inspect the gaming office’s control system and related administrative and accounting procedures to ensure compliance with local laws and regulations. Control system must be certified as being compliant (ISO/IEC17799 standard). 

Following the granting of a licence, the licensee is under an obligation to comply with certain terms and conditions that may be imposed therein by the LGA, including the appointment of a Key Official within 21 days of issue of the Licence.

Fees and Taxes 

LGA FEES

  Class 1 (€) Class 2 (€) Class 3(€) Class 4 (€)

One-time Initial Licence Fee

2,330

2,330

2,330

2,330

Minimum share Capital

100,000 100,000 40,000 100,000
One-time Company Registration Fee 870* 870* 870* 870*
Annual Licence Fee 7,000 7,000 7,000

0-6 month

0

 

6-12 months

2,300 per month

 

Thereafter

4,660 per month

Company Annual Return Fee 400* 400* 350* 400*
Renewal Licence Fee (after 5 year term) 1,165 1,165 1,165 1,165
*Based on minimum  required share capital        

Gaming Tax

Class 1 (€) Class 2 (€) Class 3(€) Class 4 (€)

0-6 months

4,660 per month 

- flat tax

 

Thereafter

7,000 per month

- flat tx

0.5% of the gross amount of bets accepted 5% of real income (revenue from rake less bonus, commisions and payment processing fees)

2,330

Class 1 on 4

1,200 per month,

payable to Class 4

Class 2 on 4

0.5% of the gross amount of bets accepted, payable to class 4 

class 3 on 4

5% of real income, payable to Class 4

Licence hosting of an EEA licenced Buisness to Consumer Operator 

1,165 per month, per operator

The total amount of tax payable by any one licensee in respect of any one licence is capped at €466,000 per annum      

Corporate Tax

Corporate tax in Malta is payable at the rate of 35%. However, shareholders may apply for tax refunds amounting to six-sevenths (6/7) of the tax paid by the company upon distribution of its profits. This effectively results in a net tax paid by the shareholder of 5%.

JTC and Remote Gaming in Malta

We pride ourselves on offering a personal and efficient approach with a commitment to tailoring our services to meet your needs. This process is overseen by professionally qualified individuals including lawyers, accountants, chartered bankers, chartered secretaries and trust and estate practitioners.

We assist our clients with all licensing and compliance issues, and provide a full spectrum of services, including company registration, preparation and co-ordination of all aspects of the application process with the LGA and on-going support for operators establishing their operations in Malta. 

 

This publication is intended to provide an overview of the subject matter and is not comprehensive in nature or to be construed as legal or tax advice. We recommend that clients seek professional advice on any particular matter.

 

 

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