Malta Online Gaming Licence
The Lotteries & Gaming Authority (LGA) is the organization responsible for regulating all gambling activity in Malta, including the issuing of licenses to online gambling operators. The LGA carries out a thorough investigation before awarding such licenses. There are currently over 500 gambling sites that are licensed by the organization. Malta Gaming License Learn about Malta Gambling License prestige, benefits, requirements, cost, and much more The island of Malta is considered as the gold standard of iGaming licensing. The Malta Gaming Authority has been regulating gaming and issuing licensing since the early 2000s. Malta Online Gaming Licence Application CSB Group offers a “one-stop-shop” service to online gaming operators by assisting clients in setting up or relocating their gaming operation to Malta. Malta Online Gaming Licence Types Under the Remote Gaming Regulations, the Malta Gaming Authority may issue a business-to-consumer or business-to-business licence. The Gaming Service licence is a B2C licence and is meant for those offering or carrying out a gaming service.
CSB Group assists clients in obtaining a Malta Online Gaming Licence and provides support throughout the whole gaming licence application process. Our gaming tax advisors can guide you on the Malta's Administrative and Compliance dues as well as the Malta Gaming Authority (MGA) Gaming Licence Fees.
Administrative and Licence Fees as applicable by the MGA
In addition to administrative fees as per the fourth schedule found under the Gaming Licence Fees Regulations (S.L.438.12) that were brought into force on 1 January 2018, the following fixed annual licence fees apply.
| B2C Fixed Annual Licence Fee | |
|---|---|
| Non-refundable Fixed Annual Licence Fee | €25,000 |
| Non-refundable Fixed Annual Licence Fee for operators providing solely Type 4 gaming services | €10,000 |
| B2B Fixed Annual Licence Fee | |
|---|---|
| Licence Fee for providers supplying solely Type 4 gaming supplies | €10,000 |
Licence and Compliance Dues as applicable by the MGA
The Gaming Licence Fees Regulations (L.N. 409 of 2017), were brought into force on 1 January 2018. Any person in possession of a licence issued by the MGA shall pay the Authority the appropriate non-refundable fixed annual licence fee. Licensees shall also pay the compliance contribution depending on the type of approval issued by the Authority.
5% Gaming Tax is applied on Gaming Revenue generated from Malta based players. Determination of taxability is whether the player is established, has his permanent address and/or usually resides in Malta.
Our team of specialised gaming tax advisors can help you set up your iGaming operation in Malta while benefiting from the most competitive tax rates in Europe. Our advisors can help you optimise your tax position while abiding to the Gaming Tax Regulations as established by the Malta Gaming Act.
* Minimum compliance contribution for new operators will not apply until the first financial year end of operations following licence acquisition.
** Start-Ups who qualify under the Directive on Start-Up Undertakings will benefit from a moratorium period of 12 months in which they are exempt from paying compliance contribution.
Source - MGA (Malta Gaming Authority)
Frequently Asked Questions about iGaming Tax in Malta
What is the gaming tax in Malta?
Referred to as a Compliance contribution, this is dependent on the type of license an operator has obtained. Business to consumer compliance contributions are calculated on the gross gaming revenue and come in a descending tiered structure.
When is the gaming tax in Malta due?
The gaming tax is payable monthly together with the submission of any regulatory returns containing the relevant data to calculate said tax.
How can you qualify for a Start-Up status?
A 'start-up' undertaking shall mean a person who, at the date of the licence application, fulfils a list of applicable criteria. The CSB Group iGaming team provides guidance on the methodology used in assessing these criteria and guiding our clients accordingly.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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Serious gaming companies understand the importance of a reputable license. Being perceived by players as safe and credible will provide for greater credibility to online game sites and therefore assist in making them more attractive to potential players. This will in turn facilitate player acquisition and retention and consequently lowers the costs associated with such acquisition. As all operators know, the cost of player acquisition can be a determining factor in the success or otherwise of their online gaming operation.
Malta offers the Online Gaming Industry a package that few other jurisdictions can match. The Remote Gaming Regulations issued in early 2004 by the Lotteries and Gaming Authority continue to enhance on the existing rules and further enhances Malta’s reputation as a jurisdiction to be trusted by both players and operators. Thanks to such industry specific legislation and regulations, Malta has, over the past 7 years become the number one jurisdiction for online gaming operations.
Online Gaming Licence Malta
The Authority will grant licenses to operate gaming offices to such persons who have demonstrated “appropriate business ability to conduct the betting office successfully”.
The new rules provide for four different classes of licenses, namely:
Class 1 – Casino style games, lotteries and slots
Class 2 – Betting , pool and sports betting
Malta Online Gaming License Cost
Class 3 – Online games such as poker, betting exchange, bingo, tournaments
Class 4 – Provision of online gaming platform
Licenses are issued for a minimum period of five years and may be extended for further periods of five years each.
Licensing Requirements
Obtaining an online gaming license in Malta is a serious affair. It is not an issue of just paying the required fee. There is a detailed application process and the applicant and the proposed operation is subjected to detailed reviews aimed to ensure they meet the legal requirements as provided by local and international legislation and directives. In the long run, such a rigorous licensing process is of benefit to the operation itself. Keeping away the problematic operators can only enhance the reputation of our jurisdiction, which in turn will reflect on the local licensed companies
The licensing procedure is quite extensive but thanks to the professionalism of the persons involved, this procedure should not take more than two to three months.
The application for a gaming license requires the following documentation:
1. Detailed profile of the promoting company
2. A copy of the last audited accounts of the promoting company, where applicable
3. A business plan indicating the economic activity – including job creation if any – which will be carried out from Malta
4. A plan of the premises earmarked for adoption as a call centre – when applicable
5. Personal details of all shareholders having more than 5% interest in the local operations.
6. A detailed narrative of the software proposed to be used by the operator.
Basic Requirements
1. Both hardware and software involved in the operations must be located in Malta, and there exist companies that can provide this service without the need for the licensee to obtain its own hardware or premises they so require.
2. All licenses are issued only to companies registered in Malta
3. The company must nominate one of its directors as KEY OFFICIAL who will act as the main communication channel between the Authority and the Operating company.
Licence Fees
The costs associated with an online gaming license application are:
- Payable on submission of the license – Euro 2,350
- Payable for software review – Euro 2,350
- Payable once the license is issued – Euro 7,000
- Payable every year thereafter – Euro 1,200
Taxation
Once a gaming license is obtained, gaming tax will become payable to the authority from the date the operations goes LIVE.
The gaming tax varies depending on which class of license one obtains as follows:
Class 1 – fixed at Euro 4,650 monthly for the first 6 months and Euro 7,000 per month thereafter.
Class 2 – Betting operation – 0.5% (half of one percent) on gross amounts of bets
– Betting Exchange – 0.5%(half of one per cent) on net winnings
– Pool Betting – 0.5%(half of one per cent) on aggregate stakes paid.
Class 3 – 5% of net income
Class 4 – fixed at NIL per month for first 6 months, at Euro 2,330 monthly for next six months and at Euro4,660 monthly thereafter.
Company Registration
A Malta based gaming operation must be carried out by a Malta registered company as specified in Regulation 4 of the Remote Gaming Regulations (LN176/2004). Gaming companies are not subject to any special tax regime. In fact, online gaming operations may be carried out through a normal limited liability company registered in Malta under the Companies’ Act.
Taxation of Online Gaming Companies
Companies registered in Malta are taxable at the rate of 35% . However in view that Malta has the INPUTATION system of taxation, wherein tax paid by the company is transferred to the shareholders when a dividend is paid, shareholders are entitled to claim back any excess of tax paid by the company over their own personal tax rate. In the case of non resident shareholders such personal tax rate is just 5% which means that such non resident shareholder has a right of refund of 6/7ths of the tax paid by the company.
In addition, Malta does not levy withholding tax on any outbound distributions of dividends. The refund system and the absence of a dividend withholding tax ensures that profits derived by gaming companies are taxed and repatriated outside Malta in the most efficient manner.
Other Legal Issues
Malta became a member of the European Union on 1st May, 2004. Therefore companies registered in Malta have the right to operate in the Single European Market which itself is covered by various directives. Unfortunately online gaming is still the subject of heated discussions between member states and currently the industry is awaiting the results of the GREEN PAPER issued in 2011. Therefore every operator is encouraged to familiarize himself with the legislation of his target markets.
Obtaining a Malta online gaming license does not exclude you from complying with the laws of other countries
What Malta Offers
Fiscal Benefits
- Low taxation on gaming operations in Malta
- Tax leakage in Malta may be as low as 5%
- A wide network of double taxation agreements
Other Advantages
- A sound legal and financial system
- A sound ICT infrastructure
- Legislation on betting and e-commerce
- Strong regulatory bodies
- A solid international reputation
- Skilled work force
- Low cost of doing business
- State of the Art telecommunications facilities
- An internal market of circa 500 million EU citizens.
Disclaimer
The above information is being provided as a general guide only and should not be considered as a substitute for professional advice.
George Farrugia is the founding partner of MGI Malta. He can be reached at [email protected]