Remote Gaming

Remote Gaming

Background

Malta was one of the pioneers amongst the European Union Member States which regulated remote gaming and ever since this decision was taken by the Maltese Government Malta has emerged as a leader in the field and as a hub for remote gaming operators. Maltese law provides for the establishment and operation of companies engaged in remote / online gaming activities (such as online casinos, casino-style games, betting exchanges and lotteries) and offers these company’s shareholders very attractive fiscal incentives.

The first online betting legislation in Malta was enacted in 2000, established under the Public Lotto Ordinance (L.N. 34 of 2000) to regulate offshore betting offices. Subsequently the Malta Gaming Authority (MGA) was set up as the single regulatory body responsible for the governance of all forms of gaming in Malta. Following a publication in April 2004 of the revamped Remote Gaming Regulations, Malta became the first EU member state to regulate Remote Gaming.

In March 2005, the Malta Remote Gaming Council (MRGC) was formed. This Council, an initiative of the Malta Gaming Authority, brings together Malta licensed operators, data carriers, internet service providers, lawyers and professional services providers giving them the opportunity to meet new challenges and voice their opinions from an operational point of view, in order to complement the work and research carried out by the regulator.

License Application Process and Fees

The Malta Gaming Authority applies a rigorous process prior to granting a remote gaming licence.  Primarily the Malta Gaming Authority will carry out the necessary fit and proper tests on the directors and shareholders of the company, and will ensure that the company applying for a licence is in good standing. The authority will review and verify the due diligence documents submitted to the authority by carrying out probity investigations with other national and international regulatory bodies and law enforcement agencies. Upon satisfaction the authority will carry out a financial analysis of the business goals and projections which are to be contained within a business plan. The next step would be for the Malta Gaming Authority to review and scrutinize the technical and organisational set up of company, the rules of the game and the games being. The Malta Gaming Authority also needs to be privy to any agreement entered into between the company and a service provider or contractor. For this reason, agreements with data centres, software houses, game developers and web-designers needs to be attached to the Remote Gaming Application. If the authority is satisfied with the proposed set up and believes that the company objectives lead to a viable business operation, the authority will request the company to carry out a system audit whereby what has been quoted on the technical documents submitted needs to be corroborated with the actual implemented set up.

Although not carved in stone, normally the reviewing of documentation by the Malta Gaming Authority takes no longer than 12 to 14 weeks. The duration between the system audit and the approval of the application takes another 2 weeks. Following approval a licence is issued in favour of the successful applicant. A compliance audit will be carried out after the first year of operation.

License Type, Class and Gaming Tax

The First Schedule of the Remote Gaming Regulations stipulates the licenses that can be applied for and the Fourth Schedule provides for the gaming tax for each type of licence. The below table illustrates the detailed interpretation of the provisions.

ClassOperation TypeGaming Tax Applicable
1Traditional Casino Style Games, Slots, Bingo, Live Casino Games, Scratch Cards and Lotteries.The first six months attract a fixed gaming tax of €4,660. Thereafter a fixed gaming tax of €7,000 applies.
1 on 4Traditional Casino Style Games, Slots, Bingo, Live Casino Games, Scratch Cards and Lotteries hosted by a platform.A fixed gaming tax of €1,200 per month applies.
2 or
2 on 4
Fixed Odds Betting and Binary Betting.
Pool Betting.
Betting Exchanges partaking in the gaming risk.
0.5% on the gross bets accepted.
0.5% on the aggregate of stakes paid.
0.5% on the sum of net winnings calculated per player and market.
3 or
3 on 4
Player to Player Poker, Live Poker, Bingo or Skill Games. Betting Exchanges not partaking in the gaming risk.A 5% gaming tax on Real income applies. Real Income is defined as total commission less bonuses played, intermediary commissions and deposits processing fees.
4Platforms hosting and managing Operators of Sports Book, Betting Exchange, Casino, Live Casino, Poker, Live Poker, Bingo or Skill Games.The first six months do not attract any gaming tax.
The subsequent six months attract €2,300 gaming tax per month.
Subsequent months attract €4,600 per month.

Key Official

A pre-requisite to the issuance of Licence is the appointment of the Key Official. The Key Official is a director of a company who must be physically resident in Malta and who is to serve as the direct point of communication between the Malta Gaming Authority and the Licensee. The Key Official shall be responsible to personally supervise operations and ensure compliance with applicable laws, regulations, MGA Directives and conditions of the License.

The Key Official is responsible for notifying the Malta Gaming Authority of any substantial changes in the Licensee’s gaming or control systems and of any addition to the portfolio of games offered on the Licensee website. In addition the Key Official shall ensure that all gaming taxes owing to the Malta Gaming Authority are paid in a timely manner and shall ensure that any requests for information made by the authority are answered within a reasonable time.

Malta Company as a Corporate Vehicle for Remote Gaming Operations

A Malta Company is a convenient, tax efficient vehicle for the carrying out of these activities from Malta. Maltese companies are fully regulated under the Companies Act 1995 and depending on the circumstances offer attractive fiscal incentives.