Malta Gambling License

Among gambling entrepreneurs, Malta is known as one of the most trusted jurisdictions, providing a regulatory framework for such businesses of gambling as remote gaming, sports betting, amusement games, casino gaming, gaming devices, and various lotteries. The Maltese gambling industry was legalized a centenary ago and since then it has constantly evolved by responding and adapting to the changing needs of the industry and building on the existing know-how. The country offers regulatory clarity, sound business infrastructure, and governmental support, as well as ensures fairness and safety for the market participants.

Advantages of Having a Maltese Gambling License

Malta is a free-market economy offering all the benefits of a convenient and respected EU jurisdiction, only with smaller operational costs. If you’re looking for a way to enter the EU market, including the most prosperous countries, bear in mind that Malta’s gaming license grants EU passporting rights allowing licensees to offer gaming services in other jurisdictions of the EEA. It means that you won’t have to establish physical office branches or apply for a new license in every EEA country where you intend to conduct your business. As long as you hold Malta’s gaming license, notifying relevant national financial authorities will suffice which is more cost-effective compared to obtaining a license in more wealthy European jurisdictions.

In Malta, the Gaming Tax is only 5% which is levied on the gaming revenue generated by the operator from the gaming service provided in a year. Gambling entrepreneurs can take advantage of over 70 international agreements on the elimination of double taxation which guarantee that income generated from gambling activities isn’t taxed twice in two different countries. The Withholding Tax in certain cases isn’t imposed on interest, royalties, dividends, and proceeds from liquidation. Although generally companies are subject to Corporate Income Tax at the rate of 35%, non-resident shareholders can receive a refund of most of this tax, which significantly reduces the effective tax rate. Depending on such factors as the type of the company’s income, the tax can be reduced to 0-10%.

Malta’s companies can also take advantage of the exemption from the audit. For instance, a Private Limited Liability Company (Ltd) can be exempt from audit if its maximum annual turnover doesn’t exceed 80,000 EUR or a proportional amount if the accounting period is other than 12 months, and the company’s shareholders meet the criteria of qualifying shareholders. Availing of this exemption is relatively easy – a company has to submit an application to the Malta Business Registry (MBR) within 6 months from the end of the accounting period to which the exemption should apply.

Gambling Regulations in Malta

Maltese law uses the term “gaming” to refer to all gambling and gaming activities. Pursuant to the Gaming Definitions Regulations of 2018, gaming is defined as an activity consisting of participating in a game of chance or a game of skill, offering a gaming service, or making a gaming supply. An operator provides a gaming service when it makes a game available to players for direct or indirect and solo or joint participation as an economic activity.

The Maltese gaming industry is mainly regulated by the Malta Gaming Act of 2018, the purpose of which is to ensure that the gaming sector is held in the public interest, as well as promote sustainable gaming, economic growth, innovation, and the development of Malta as a center of excellence and expertise for gaming-related competencies. It also covers such aspects as the gaming authority, audit, protection of minors and other vulnerable people, and responsibilities of players.

The following pieces of subsidiary legislation fall under the Gaming Act of 2018 and accordingly provide regulatory clarity:

• Gaming Authorisations Regulations
• Gaming Commercial Communications Regulations
• Gaming Compliance and Enforcement Regulations
• The aforementioned Gaming Definitions Regulations
• Gaming Player Protection Regulations
• Gaming Premises Regulations
• Gaming License Fees Regulations
• Gaming Tax Regulations
• Social Causes Fund Regulations
• Retention of Data (MGA) Regulations

Pursuant to the Malta Gaming Act of 2018, the Malta Gaming Authority (MGA) is responsible for the regulation of various sectors of the gaming industry, including land-based and remote gaming sectors. It ensures that licensed gaming operations are fair and transparent to all players, prevents crime, and corruption, detects money laundering and terrorist financing and protects vulnerable society members.

The MGA conducts, inter alia, the following regulatory activities:

• Keep under review all regulated practices and operations, as well as the performance of the gaming sector
• Provide the relevant information and guidance to the public
• Ensure that gaming services are advertised fairly and responsibly
• Receive and investigate complaints by players and assist and promote timely, fair, and competent resolution of disputes between players or players and operators
• Request, collect, compile, and maintain records of all relevant data
• Ensure that the persons conducting gaming business are fit and proper and suitable to carry out their functions
• Grant any license,  approval,  recognition, or other authorization for gaming business activities
• Prevent, detect, and ensure the prosecution of any offense against the regulations

In line with the responsible gaming objectives of the Gaming Player Protection Regulations, a gaming operator must provide sufficient evidence to the MGA to show that the following objectives are being satisfied according to the means specified by the MGA:

• Proper controls, policies, and procedures must be in place to prevent gaming by minors
• Proper controls, policies, and procedures must be in place to protect vulnerable persons
• The interests of all players must be adequately safeguarded and players must be provided with information on any resources they may have if they feel aggrieved by a decision of the authorized person
• All information relevant to the gaming service must be readily available to players
• Information related to responsible gaming must be readily available to players
• Tools must be  readily  available to empower players or any other persons to control their use of gaming services and to safeguard themselves from the effects of problem gaming
• Marketing and advertising activities of the gaming service are fair and in accordance with the Gaming Commercial Communications Regulations and any other applicable regulatory instrument or law

Most gaming operators looking to be licensed in Malta must also take note of the Prevention of Money Laundering Act of 1994 and the Prevention of Money Laundering and Funding of Terrorism Regulations of 2018 as they’re required to create internal policies and take other measures to combat and prevent money laundering and terrorist financing. The rules include know-your-customer (KYC) policies, reporting suspicious activities, and performing a business risk assessment. The MGA is responsible for collecting, processing, and analyzing relevant data required to enforce the regulations.Malta Gaming Authority – licensee register

Annual License Fees

According to the Gaming License Fees Regulations, all licensees are obligated to pay the compliance contribution, payable for each and every license period, and the non-refundable fixed annual license fee, payable in advance for the 12 running months following the issuance of the license and every anniversary, throughout the duration of the license.

The annual license fees are payable in advance and non-refundable, and sometimes vary depending on the license type:

• Gaming Service license
  • Type 1-3 – 25,000 EUR
  • Type 4 – 10,000 EUR
• Critical Gaming Supply license
  • Operators supplying and managing the material elements of a game
    • If the company’s annual revenue doesn’t exceed 5 mill. EUR – 25,000 EUR
    • If the company’s annual revenue doesn’t exceed 10 mill. EUR – 30,000 EUR
    • If the company’s annual revenue exceeds 10 mill. EUR – 35,000 EUR
    • If the company has a Type 4 license – 10,000 EUR, irrespective of the annual revenue
  • Businesses supplying and managing software to process regulatory records, etc.
    • If the company’s annual revenue doesn’t exceed 1 mill. EUR – 3,000 EUR
    • If the company’s annual revenue exceeds 1 mill. EUR – 5,000 EUR

How to Establish a Gambling Company in Malta

Before applying for a gaming license in Malta, you should first open a local company. The incorporation process of a Maltese company is relatively quick, provided that all the required information and documents are in place. One of the most common legal structures of a business in Malta is a Private Limited Liability Company (Ltd). You can register a new company within 3 months and even entrust the process to an attorney by signing a power of attorney if you don’t wish to travel to Malta.

Requirements for a Private Limited Liability Company (Ltd):

• Its name must end with the words “Private Limited Company” or the word “Limited” or its abbreviation “Ltd”
• At least one company director
• A company secretary
• 1-50 shareholders who don’t have to be local residents of Malta
• The possession of the minimum authorized capital as per gaming regulations
• A local registered office address

To establish a new company in Malta, you should take the following steps:

• Verify and reserve a unique and compliant company name (valid for 3 months)
• Find office space in Malta and obtain a legal address where the Maltese authorities will deliver legal documents
• Hire a company director, secretary, and an AML officer
• Open a local bank account
• Transfer minimum share capital required for your type of gaming activities
• Pay company registration fees (245-1,750 EUR depending on the value of authorized share capital)
• Submit an application for company registration along with the required documents to the MBR
• Obtain a certificate of registration from the MBR
• Register the company with the Commissioner for Revenue (CFR) for tax purposes

Ensure that you have the following documents prepared for submission:

• A Memorandum of Association
• Articles of Association
• Notarized photocopies of the passports of shareholders and directors
• Form BO1 contains details of the identification of the company’s beneficial owners
• Proof of locally registered office address
• Proof of transferred share capital

Advantages