Malta

Malta
The Malta gaming licence issued by the Malta Gaming Authority (MGA) is undoubtedly one of the most reputable licences for online gaming worldwide.

Malta was the first Member State of the European Union (EU) to introduce regulations on online gaming. It is considered as one of the largest online gaming jurisdictions and the most popular location for operators that seek licensing for their online gaming business. The Malta gaming licence issued by the Malta Gaming Authority (MGA) is undoubtedly one of the most reputable licences for online gaming worldwide.

The MGA licence covers all gaming verticals: casino games, RNG based games, lotteries, sports betting, fantasy sports, p2p games, online poker and the provision of games. All these are included under a B2C licence or B2B licence, as per the new Gaming Act issued by the Malta Gaming Authority in 2018.

Benefits for setting up your business in Malta

Apart from having one of the most innovative, whilst at the same time robust online gaming regulations worldwide, Malta is continuing to build on its 15+ years success story, which made the country earn the title of iGaming capital in Europe, through enhancing other benefits and incentives, aimed at attracting gaming business to the island.

A number of such incentives include the employees of online gaming companies which are in possession of a Malta (MGA) gaming licence. Such incentives include the reduced rates of income tax on personal income, applicable to highly qualified individuals, refunds on dividends to online gaming companies leading to a reduced effective tax rate of 5%, and also double taxation relief.

Non-residents who opt to relocate to Malta can also benefit from very attractive incentives which include the Residence Programme and the Global Residence Programme.

This, coupled with the attractive gaming taxes which cover online gaming in Malta, make the MGA licence one of the most sought-after gaming licences, and Malta’s overall tax rates among the most competitive in the world. Over the years, this has resulted in the number of licencees operating under a Malta (MGA) licence, to continue increasing consistently year after year, as does the influx of gaming operators calling Malta their home.

Recognition Notice

A Recognition Notice is a notice issued by the Malta Gaming Authority (MGA) whereby an authorisation issued by another Member State of the EU or the EEA, or a State which is deemed by the Authority to offer safeguards largely equivalent to those offered by Maltese law, is recognised as having the same effect as an authorisation issued by the Authority for the purpose of providing a gaming service or gaming supply in or from Malta.

This refers mainly to licences being issued by another EU member State (or EEA), which need to be authorised (by the MGA) to operate in and from Malta without the need to obtain an MGA licence. Recognised notices can be issued for both for a B2C type service, but also for a B2B supply and cover all the MGA Types; i.e. Type 1, 2, 3 and 4.

In instances where the licence issued in a particular EU member State does not mirror the licences issued by the MGA, a decision on whether to accept or otherwise the issuance of a recognition approval will always depend on the Maltese gaming authority.

A recognition notice carries a fee, payable in advance to the MGA, of €5,000 per year, in line with Regulation 22 of the Gaming Authorisations Regulations.

Malta Licence Types
The MGA offers predominantly two types of licences, and applicants may apply for either a gaming service or a critical gaming supply licence as explained.

Gaming service licence is a business-to-consumer (B2C) licence to offer or carry out a gaming service. A critical gaming supply licence is a business-to-business (B2B) licence to provide or carry out a critical gaming supply.

The following services shall each constitute a gaming service: offering, provision or operation of a gaming service; and hosting by a person in his premises accessible to the public, the operation or making available for use a gaming device or gaming system.

The following services shall each constitute a critical gaming supply: supply and management of material elements of a game; and supply and management of software, to generate, capture, control or process essential regulatory record and/or supply and management of the control system itself on which the software resides.

Applicants applying for a gaming service or a critical gaming supply can offer one or more of the following game types:

Type 1 – Games of chance played against the house, the outcome of which is determined by a random generator, and shall include casino type games, including roulette, blackjack, baccarat, poker played against the house, lotteries, secondary lotteries and virtual sports games;

Type 2 – Games of chance played against the house, the outcome of which is not generated randomly, but is determined by the result of an event or competition extraneous to a game of chance, and whereby the operator manages his or her own risk by managing the odds offered to the player;

Type 3 – Games of chance not played against the house and wherein the operator is not exposed to gaming risk, but generates revenue by taking a commission or other charge based on the stakes or the prize, and shall include player versus player games such as poker, bingo, betting exchange, and other commission based games;

Type 4 – Controlled skill games as per regulation 8 of the Gaming Authorisations Regulations. Further information can be obtained here.

Provided further that in the case of a game displaying elements which may fall under more than one of the types referred to above, it would be up to the MGA’s discretion to categorise the game in the type it believes closest reflects the nature of the game.

The MGA requires a separate approval for each gaming vertical that requires safeguards in order to ensure that it is offered in a manner which adheres to the Law and the regulatory objectives:

  • Casino;
  • Live casino;
  • Lotteries and secondary lotteries;
  • Fixed odds betting;
  • Pool betting, including betting exchange;
  • Poker and other commission-based, peer-to-peer games such as bingo, but excluding betting exchange;
  • Lottery messenger services; and;
  • Controlled skill games.
Malta ADMINISTRATIVE & LICENCE FEES

Licence & Compliance Dues

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.

A non-refundable application fee needs to be paid in order for a gaming licence application to be considered as complete.

Gaming Licence Application Fee
Gaming Licence Application feeFee
One-time, non-refundable licence application fee €5,000

The annual licence fee is required to be paid prior to the issuance of the licence and subsequently, on an annual basis. The annual licence fee is non-refundable and payable upfront in advance.

The applicable amounts for the initial gaming licence fee payment are the following:

Initial Annual Gaming Licence fee
Initial Gaming Licence fee – Gaming Service Licence (B2C)Fee
Non-refundable Fixed Annual Licence Fee€25,000
Non-refundable Fixed Annual Licence Fee for operators providing solely B2C (Type 4) gaming services€10,000
Initial Annual Gaming Licence fee – Gaming Supply Licence (B2B)Fee
Non-refundable Fixed Annual Licence Fee €25,000
Non-refundable Fixed Annual Licence Fee (Back-Office)€10,000

Following the initial year, the licence fee is calculated as per the following guidelines:

Annual Gaming Licence fee
Fixed annual licence fees – Gaming Service Licences (B2C)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
Fixed annual licence fees (B2B)Fee
Where annual revenue does not exceed €5,000,000 €25,000
Where annual revenue exceeds €5,000,000 but does not exceed €10,000,000€30,000
Where annual revenue exceeds €10,000,000€35,000
Licence Fees on Annual Revenue – (B2B Back-Office)Fee
Annual revenue does not exceed €1,000,000€3,000
Annual revenue in excess of €1,000,000€5,000

Compliance Contribution

Compliance Contribution is required to be paid monthly, commencing immediately after the month in which the licence period commences, and then on a monthly basis, with payments to be calculated on the gaming revenue accrued during each and every month falling within a licence period (‘the reference month’). The amount due shall be paid before the expiration of the twentieth (20th) day of the month following the reference month. 

The compliance contributions vary from one category of licence to another and depend on the gaming activities undertaken. It can be calculated as follows, as per the Gaming Licence Fees Regulations: 

Gaming Service Licence – B2C
B2C – Type 1 Gaming Services           Minimum* €15,000; Maximum €375,000
Compliance Contribution for the Financial Year**Rate
For every euro of the first €3,000,0001.25%
For every euro of the next €4,500,0001.00%
For every euro of the next €5,000,0000.85%
For every euro of the next €7,500,0000.70%
For every euro of the next €10,000,0000.55%
For every euro of the remainder0.40%
B2C – Type 2 Gaming Services           Minimum* €25,000; Maximum €600,000
Compliance Contribution for the Financial Year**Rate
For every euro of the first €3,000,0004.00%
For every euro of the next €4,500,0003.00%
For every euro of the next €5,000,0002.00%
For every euro of the next €7,500,0001.00%
For every euro of the next €10,000,0000.80%
For every euro of the next €10,000,0000.60%
For every euro of the remainder0.40%
B2C – Type 3 Gaming Services           Minimum* €25,000; Maximum €500,000
Compliance Contribution for the Financial Year**Rate
For every euro of the first €2,000,0004.00%
For every euro of the next €3,000,0003.00%
For every euro of the next €5,000,0002.00%
For every euro of the next €5,000,0001.00%
For every euro of the next €5,000,0000.80%
For every euro of the next €10,000,0000.60%
For every euro of the remainder0.40%
B2C – Type 4 Gaming Services        Minimum* €5,000; Maximum €500,000
Compliance Contribution for the Financial Year**Rate
For every euro of the first €2,000,0000.50%
For every euro of the next €3,000,0000.75%
For every euro of the next €5,000,0001.00%
For every euro of the next €5,000,0001.25%
For every euro of the next €5,000,0001.50%
For every euro of the next €10,000,0001.75%
For every euro of the remainder2.00%

5% Gaming Tax

For gaming services being offered to players physically present in Malta, the licensee would be subject to the payment of a gaming tax calculated at the rate of five per cent (5%) of the gaming revenue generated from the gaming service in one year. 

* In accordance with the Directive on the Calculation of Compliance Contribution (Directive 4 of 2018), the full minimum amount of compliance contribution shall not be due to the Authority by new operators until a full licence period elapses. 

** Start-Ups who qualify under the Directive on Start-Up Undertakings, in accordance with the requirements as per the Gaming Licence and Regulations Fees Directive, will benefit from a moratorium period of twelve (12) months in which they are exempt from paying compliance contributions.

OTHER ANNUAL FEES

Other Annual Fees, which are applicable to specific licence types include: 

Commercial Bingo Halls LicenceFee
Maintenance fee for an approved gaming premises, payable yearly, in advance (per premises)€500
Controlled Gaming Premises LicenceFee
Maintenance fee for an approved controlled gaming premises, payable yearly, in advance (per premises)€250

OTHER ADMINISTRATIVE FEES

The following Administrative Fees, as per the Gaming Licence Fees Regulations are applicable to Licensees operating Gaming Premises: 

Fee 
Request for the approval of new Gaming Premises for Commercial Bingo Hall Licence (per premises)€1,000
Request for the approval of a new Controlled Gaming Premises (per premises)€250
Request for the approval of a new Gaming Device (per device)€100

SHARE CAPITAL REQUIREMENTS

A licensee is subject to minimum issued and paid-up share capital gaming requirements. The minimum share capital requirement depends on the licence being applied for. 

In the case of a ‘B2C’ gaming service licence, the share capital requirements depend on the game type, as indicated below: 

• Type 1 – Minimum €100,000 

• Type 2 – Minimum €100,000 

• Type 3 – Minimum €40,000 

• Type 4 – Minimum €40,000 

WHY CHOOSE IGA GROUP

At IGA Group, we are committed to providing the best possible service to our clients, by using our wealth of experience and knowledge to maximise the potential of their business. We have years of experience in the gaming sector, both through previous employment with gaming companies, but also through software companies providing technical solutions and also through various consultancy engagements both at a strategic, operational and regulatory level.

Our expertise covers the whole spectrum of operator activities: legal, finance, operations, online gaming regulation, compliance, AML, technical, licensing, corporate, SEO, support, company formation, mergers and acquisitions and more.

Having assisted companies in obtaining gaming licences in Malta, UK, Romania and Curaçao, we pride ourselves for being one of Malta’s most experienced iGaming service providers.