Remote gaming regulation in Malta

Stories | 07 Sep 2017

When choosing a regulator to issue a remote license permit, many operators and software providers choose the Malta Gaming Authority.

This article is going to discuss benefits of such choices and the reasoning behind an operator’s and a software provider’s choice.

Malta is a country in southern Europe and it consists of an archipelago in the Mediterranean Sea which is an indirect benefit for operators and software providers. Being a country in the Mediterranean Sea, Malta focuses on developing their sea tourism, which attracts many tourists all around the world. Annually, Malta is visited by 1.6 million tourists, creating an opportunity for companies to acquire multilingual human resources.

Malta joined the European Union on the 1st of May 2004, which gives operators and software providers additional assets to enjoy: the benefits of the single market and four freedoms of the European Union – free movement of goods, services, capital and labour.

When it comes to the choice of remote gaming licenses, Malta’s Remote Gaming Regulations have distinguished four types of licenses, which are classified in accordance with the service the legal entity  is providing in the remote gaming. Therefore, the legislation has the following licenses:

  • Class 1 Remote Gaming Licence shall be a remote gaming licence,
  • Class 2 Remote Gaming License shall be a betting office license,
  • Class 3 Remote Gaming Licence shall be a licence to promote and, or abet remote gaming from Malta and
  • Class 4 Remote Gaming Licence shall be a licence to host and manage remote gaming operators, excluding the licensee himself.

Each one of these remote gaming licenses is subject to a different taxation amount that  shall be paid by the operators/software providers. Accordingly, the license classes are taxed as follows:

  • Class 1 Remote Gaming License taxation fee equals to the amount of four thousand six hundred and sixty euro (€4,660) for the first six months and subsequently seven thousand euro (€7,000) per month for the entire duration of the licence period:
    • Provided that a Class 1 Licensee operating on a hosting platform in possession of a Class 4 Remote Gaming licence, shall pay one thousand and two hundred euro (€1,200) per month for the entire duration of the license.
  • A Class 2 licensee, including a Class 2 licensee operating on a hosting platform in possession of a Class 4 remote gaming licence, shall pay a sum equivalent to half of one per centum (0.5%) of the gross amount of bets accepted in remote betting operations.
  • A Class 3 licensee, including a Class 3 licensee operating on a hosting platform in possession of a Class 4 remote gaming licence, shall pay a sum equivalent to five per centum (5%) of real income:
    • Provided that the Authority, in accordance with article 76A of the Act, shall have the power to issue directives as it may deem necessary in respect of the computation of real income: Provided further that the licensee shall not be entitled to any relief, reduction, credit or set-off of any kind in respect of such tax.
  • A Class 4 licensee, hosting and managing other remote gaming operators, shall pay – (i) no tax for the first six months; (ii) two thousand and three hundred and thirty euro (€2,330) per month for the subsequent six months; and (iii) four thousand and six hundred and sixty euro (€4,660) per month thereafter for the entire duration of the licence:
    • Provided that without prejudice to the provisions of regulation 3 of these regulations, the Class 4 licensee shall also pay a monthly tax of one thousand and one hundred and sixty-five euro (€1,165), for every operator which is not in possession of the relevant Class 1, Class 2 or Class 3 licence in terms of these regulations, being hosted and managed by the Class 4 licensee on its platform.

Generally, it takes around sixteen to twenty weeks in order for the Malta Gaming Authority to issue a license. The MGA receives an overwhelming amount of application requests, which is the reason that it is  above the industry standard for time for license issuance.

An additional benefit of acquiring a Malta license is a regulated remote gaming advertisement. The current objective of the European Commission is to  establish a single digital market which has an aim to increase consumer protection on the internet, including online gamblers. Malta’s limited advertising is a step towards the achieving that objective. By choosing Malta’s license, operators/software providers are not only enjoying the above-mentioned benefits but they are choosing a jurisdiction which is striving to follow and adjust their laws to meet the challenges imposed by the remote gambling sector.

Sources:

  • SUBSIDIARY LEGISLATION 438.04 – REMOTE GAMING REGULATIONS 20th April, 2004; 20th July, 2004; 20th April, 2005 – LEGAL NOTICE 176 of 2004, as amended by Legal Notices 110 of 2006, 270 and 426 of 2007, 90 of 2011 and 131 of 2016
  • http://www.mga.org.mt/