Malta has a very interesting legal framework for both land-based and online gaming. This is a sector which has registered particular growth over the recent years with the major players in this area of business setting up shop on the island.
Remote Gaming Licensing and procedure
In order to be awarded a Remote Gaming license in Malta applicants must be limited liability companies registered in Malta and be actively operational and have a physical presence in Malta.
There are four classes of licenses:
- Class 1: Operators who manage their own risk on repetitive games. E.g. casino style games, lotteries and slots.
- Class 2: Operators who manage their own gaming risks on markets based on singular events, i.e. sports betting/fixed-odds betting.
- Class 3: Operators promoting games and in return get a commission in a P2P transaction, i.e. multi-player games and betting exchanges such as bingo, poker etc.
- Class 4: Operators who run a software platform to host the service of any of the above classes. This is aimed at software vendors who want to provide managing and hosting facilities on their platform and are not involved in player management functions.
Applicants may apply for more than one license. A Remote Gaming license is valid for a period of five years, which period is renewable for further five year periods.
Administrative and Licence Fees
Administrative and Licence Fees as per Second Schedule of the Remote Gaming Regulations (S.L. 438.04) issued under the Lotteries and Other Games Act (Cap. 438 of the Laws of Malta).
| Application Fee for New License | €2,330 | Paid upon application for a remote gaming Licence |
| System Review | €2,500 | Fee paid in advance for the execution of the audit by the Authority’s approved third party Certifiers/Auditors |
| Licence Fee | €8,500 | Per Annum per Licence |
| Application Fee for Renewal of Licence | €1,500 | Paid upon application for renewal of Licence |
| Approval Fee for Transfer or Assignment of Licence | €1,500 | Per Licence paid upon application for approval |
| Approval of Share Transfer | €1,500 | Per Licensed Company paid upon application for approval |
| Approval of Simple Contractual Commercial Agreements | €70 | Per Annum per contract. Aggregrate amount for approved contracts shall not exceed €30,000 Per Annum |
| Approval of Complex Joint Venture Agreements | Administrative hourly fee which is predetermined and communicated prior to the commencement of approval process |
Other Compliance Fees
| Compliance Review | €3,500 | Fee paid in advance for the execution by the Authority’s approved third party Certifiers / Auditors |
Price Schedule
The MGA is cognisant of the fact that there are companies which hold more than one remote gaming licence issued by the said Authority. Where systems reviews or compliance reviews are carried out by the same third party Certifiers/Auditors and within the same time period, the following pricing structure shall apply to each remote gaming licence being reviewed in the case of remote gaming licences linked to the same company.
- 1st licence being audited – 100% of above price;
- 2nd licence being audited – 75% of above price;
- 3rd licence being audited – 65% of above price;
- 4th and consecutive licences being audited – 60% of above price.
Taxation
All licensed gaming companies are subject to taxation on two levels:
- Corporate Taxation
- Gaming Taxation
Corporate Tax
The remote gaming company shall be subject to income tax on company profits at a rate of thirty-five percent (35%). However, this is subject to Malta’s full imputation tax system, wherein tax paid by a company in Malta is, on the distribution of a final dividends, imputed to the shareholder as a tax credit against the shareholder’s tax liability. Therefore, a shareholder will, upon a distribution of the dividend, be entitled to a refund in part or in full of any advance tax levied on the distributing company. The default tax credit for remote gaming companies, is a 6/7ths refund on active trading income, thereby the effective tax leakage can be lowered to just five percent (5%), and possibly even less.
Gaming Tax Schedule
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| Class 1 Licence |
€4,660 €7,000 |
Per Month for the first 6 months
Per Month for the entire duration of the licence |
| Class 1 Licence operating on a hosting platform in possession of a Class 4 Remote Gaming Licence (Class 1 on 4) | €1,200 | Per Month for the entire duration of the licence |
| Class 2 Licence | 0.5% | Of the gross amount of bets accepted in remote betting operations |
| Class 2 Licence operating on a hosting platform in possession of a Class 4 Remote Gaming Licence (Class 2 on 4) | 0.5% | Of the gross amount of bets accepted in remote betting operations |
| Class 3 Licence | 5% | Of real income |
| Class 3 Licence operating on a hosting platform in possession of a Class 4 Remote Gaming Licence (Class 3 on 4) | 5% | Of real incom |
| Class 4 Licence hosting and managing other remote gaming operators |
Nil €2,330
€4,660 |
For the first 6 months
Per Month for the subsequent 6 months
Per Month thereafter for the entire duration of the licence |
| Class 4 licensee hosting and managing an operator which is not in possession of the relevant Class 1, 2 or 3 licence in terms of the regulations, however hosting an EEA licensed Business to Consumer operator | €1,165 | Per Month per operator, paid by the Class 4 Licensee |
| Remote Gaming Tax Capping per licensee per remote gaming licence | €466,000 | Per Annum |
Casinos
Land based casino gambling is also very popular in Malta. The operation of a land based casino in Malta is particularly regulated and falls, as also is the case with online gaming operations, under the remit of the Lotteries and Gaming Authority. All casino players should be eighteen years of age or above as otherwise they would not be able to participate in any form of casino activities.
PCM Legal provides services in the following areas:
- Online and Land-Based license applications
- Regulatory and Compliance Advice
- Control System Logistical Arrangements
- Key Official Services