One of the smallest nations in Europe, Malta is located south of Sicily in the Mediterranean Sea. Ruled by the British until 1964, it is now independent and a member of the European Union.
In 2001, the Lotteries and Other Games Act laid the foundation for the regulation of online gaming in Malta. It established the Malta Gaming Authority (MGA) and provided the legal framework for the licensing and regulation of various gaming activities, including online gaming.
The Remote Gaming Regulations of 2004 set out specific rules and requirements for the operation of remote gaming activities, covering licensing conditions, player protection measures, and technical standards.
The Malta Gaming Authority Act of 2014 further strengthened the regulatory framework by establishing the Malta Gaming Authority as a separate legal entity. The MGA was granted increased autonomy and powers to regulate various gaming sectors, including online gaming.
In 2016, the Skill Games Regulations were enacted. The regulations provide specific requirements and conditions for the licensing and operation of games whose outcome is predominantly determined by skill rather than chance.
The Gambling Act, recently introduced in 2018, was a significant update to the legal framework governing gaming in Malta, aiming to modernise the regulatory framework, aligning it with contemporary industry standards. The act consolidated various gaming laws and regulations into a single piece of legislation.
The same year, the Malta Gaming Authority introduced the Gaming Authorisations and Compliance Directive, providing detailed guidelines and procedures regarding the application and compliance processes for gaming licences, covering various aspects such as due diligence, reporting requirements and compliance assessments.
The Player Protection Directive was also introduced in 2018, focused on ensuring a high-level of protection for players participating in online gaming activities by outlining specific requirements related to responsible gaming measures, including self-exclusion tools, age verification, and responsible advertising practices.
The Malta Gaming Authority issues all gambling licences and rules on any game-related issue with the exception of horse racing (governed by the Malta Racing Club and the Ministry for Justice and Home Affairs) and spread betting (which falls under the authority of the Malta Financial Services Authority).
The Authority strives to protect public interests and ensure the stability of the Maltese gaming industry, by making sure that all gaming is conducted responsibly and in a transparent manner, preventing crime and protecting minor and vulnerable players.
The Malta Gaming Authority (MGA) issues licences for the following categories, for a period of 10 years:
A gaming service licence (B2C) which allows the holder to offer gaming services directly to the public.
A critical gaming supply licence (B2B) which is required if the licensee intends to (a) supply, provide or manage material elements of a game, or (b) supply, provide or manage the gaming software, either as a standalone product or as part of a system that generates, captures, controls, or processes essential regulatory records, including the supply and management of the control system where the software is deployed.
The different game categories covered by an MGA licence include:
Type 1: Games of chance against the house where results are determined by a random generator (RNG). This encompasses casino games like roulette, blackjack, baccarat, poker against the house, lotteries, secondary lotteries, and virtual sports games.
Type 2: Games of chance against the house where outcomes are determined by events or competitions external to the game and where operators manage their risk by adjusting odds.
Type 3: Games of chance where the operator earns revenue through commissions or charges based on stakes or prizes, includes player versus player games like poker, bingo, betting exchange, and other commission-based games.
Type 4: Controlled skill games, as per regulation 8 of the Gaming Authorisation Regulations, including fantasy sports.
The Malta Gaming Authority (MGA) can also issue a recognition notice, whereby an licence or 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.
Recognised notices can be issued for both B2C and B2B services and for all game-types. 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 B2C and B2B services and cover all game types.
Corporate groups may apply for a B2B corporate MGA licence, whereby the whole group is deemed to be the Licensee, as long as the group’s parent entity exercises control to the extent of over ninety percent over other bodies corporate in the same group, whether by way of shareholding or voting rights. The company designated as the nominal holder of the group licence shall be vested with the primary responsibility to pay the relevant dues to the Authority and to satisfy information and reporting requirements in terms of applicable regulatory instruments. Importantly, services provided within the same corporate group are considered as carried out by the licensee, rather than outsourced. Please note that the type of licence and games applied for will influence the minimum issued paid-up share capital.
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
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
Following the initial year, the licence fee is calculated as per the following guidelines:
Annual Gaming Licence fee
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
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:
OTHER Administrative FEES
The following Administrative Fees, as per the Gaming Licence Fees Regulations are applicable to Licensees operating Gaming Premises:
RECOGNITION NOTICE FEE
In line with regulation 22 of the Gaming Authorisations Regulations, a recognition notice carries a fee, payable in advance to the MGA.
Favourable taxation
Malta offers extensive tax benefits, making it a preferred jurisdiction to establish and expand gaming operations. Businesses in Malta benefit from exemption under the Value-Added Tax Act and can leverage over 70 double taxation treaties. Highly qualified persons enjoy a flat personal income tax rate of only 15%. Additionally, capital gains and dividend income received from subsidiaries of Maltese companies holding at least 10% equity are exempt from tax.
Reputable Jurisdiction
As the first EU country to regulate online gambling in 2001, Malta ensures transparency in reporting by licensed companies. The Malta Gaming Authority (MGA) collaborates with the government to protect both players and business owners through regular checks and audits, strict licensing requirements and the suspension of non-compliant licences. Holding a Malta Gaming License is a testament to an operator’s transparency, fairness and honesty, and contributes to their credibility.
Qualified Labour
Malta has established an excellent telecom and IT infrastructure with outstanding levels of availability and stability and after more than two decades of contributing significantly to Malta’s economy, the iGaming industry provides a highly trained and multilingual workforce with expertise in IT, programming, data analytics, marketing and advertising.
Stable Economy
Malta enjoys low unemployment rates, stable and consistent economic growth driven by technology, financial services, manufacturing, tourism and services. Malta’s economic stability is further supported by its EU membership and currency.
EU Membership
Malta follows EU legislation on gaming, setting standards that influence other jurisdictions. The Malta Gaming Authority’s checks and regulations align with EU law, providing reassurance to operators, players and third parties (more options for payment providers, merchants, and bank accounts).
Strict AML Regulations
The MGA also conducts regular inspections and collaborates with the Financial Intelligence Analysis Unit to prevent money laundering in companies holding a Malta Gaming License. Malta strictly adheres to the EU legal framework on anti-money laundering, participating in initiatives by MONEYVAL and FATF.
Increased Market Reach
A Malta Gaming License can be used internationally, except in jurisdictions blacklisted by FATF or those requiring a local licence. Malta’s EU membership ensures the licence’s recognition within the EU, providing companies with access to both EU and international markets.
Crypto-Friendly Environment
Malta’s enactment of laws related to blockchain and other fintech services as well as the country’s commitment to embracing cryptocurrencies and innovative financial technologies further enhances its appeal for operators seeking a progressive and crypto-friendly regulatory environment.
During the pre-application process, the MGA will evaluate all documents and information and decide whether the application can continue. The Authority will seek to establish whether the potential applicant is prepared and able to conduct online gaming activities in line with the required standards and expectations.
Legal Entity
A holder of the Malta Gaming License must be a legal person established in the EU or the EEA and is required to establish a physical presence in Malta, ensuring that they can be effectively monitored and regulated by the Malta Gaming Authority (MGA). A company incorporated in Malta to obtain a Malta gaming licence must have a registered office in the country. The entity must have one director and a company secretary, both of whom are subject to the MGA’s Fit and Proper Test.
Due Diligence
Key positions within the entity will be identified and a thorough fit and proper assessment will be undertaken, including probity assessments with other national and international regulatory bodies and enforcement agencies.
Financial analysis
The MGA will conduct a comprehensive business plan evaluation to ensure financial viability.
Operational & Statutory Requirements
The MGA will review incorporation documents, games, business processes, rules, terms, conditions, policies, procedures, and all other technical documentation associated with the gaming and control system.
Capital requirements
Licensees are obligated to meet the specified minimum issued and paid-up share capital requirements:
- Gaming Service Licence (B2C):
Type 1: Minimum €100,000
Type 2: Minimum €100,000
Type 3: Minimum €40,000
Type 4: Minimum €40,000 - Critical Gaming Supply Licence (B2B):
Minimum €40,000
In the case of companies holding multiple type approvals, the cumulative share capital must adhere to the above requirements, with a cap set at €240,000.
System audit
Prospective licensees must undergo a system review and compliance audit in a controlled technical environment before commencing operations. During a 60-day period, part of the application process involves operating in this controlled environment. An external System Review must be requested within this timeframe to audit the live environment against the proposed details in the business plan and application. If significant differences are found, the entire application process will need to be repeated.
Compliance review
The MGA stipulates that after going live, a Licensee must undergo compliance reviews of its operations, conducted by independent third parties contracted by the MGA at a fixed market price. These reviews are required after the first year of operation following MGA licensing and as determined by the MGA compliance plan thereafter. Failure in a compliance review could result in the suspension or termination of the licence.
Technical Infrastructure
Whereas remote gaming operators may have their gaming equipment and servers located anywhere in the EU/EEA, a forensic live copy of the players’ database, financial transactions database and gaming transactions log database need to be located in Malta.
Reporting
A number of key reports are required to monitor overall gaming activity. The list is not exhaustive and other reports may be requested from time to time by the Authority.
- Audited Financial Statements prepared and audited in compliance with International Financial Reporting Standards and International Standards on Auditing.
- Interim Financial Statements which must include a Statement of Financial Position and a Statement of Comprehensive Income.
- Industry Performance Returns (IPRs) which must be compiled bi-annually by licensees.
- Audit of Player Funds & Gaming Revenue Declaration, annual submission within nine months from the financial year-end.
- Auditor’s Management Letter, annual submission within nine months from the financial year-end.
- Monthly Reports, including Gaming Tax and Player Funds reports which are mandatory on a monthly basis.
AML/CFT
Gaming Service licensees providing Type 1, 2, and 3 games are required to comply with Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) requirements, encompassing the following directives:
- Appointment of AML Officer holding a Key Function Holder licence, approved by the MGA and further registered with the Financial Intelligence Analysis Unit (FIAU).
- Development of Internal AML/CFT Procedures and Policies aimed at identifying and reporting activities associated with money-laundering and terrorist financing.
- Implementation of Customer-Due-Diligence (CDD) and Know-Your-Customer (KYC) procedures based on the Prevention of Money Laundering Act of 1994 and the Prevention of Money Laundering and Funding of Terrorism Regulations of 2018.
Responsible Gaming
The overriding objectives are to promote responsible gambling, prevent the occurrence of problematic gambling, and to safeguard players’ rights. It is imperative that Licensees operate in a manner which is transparent and that they implement preventive measures to mitigate the occurrence of gambling-related harm.
The following information must be displayed on-site: licensee details, signage indicating underage gaming is not permissible, a ‘responsible gaming’ message, explaining that gaming can be harmful if it is not controlled as well as information about the player support measures on the website, a dynamic seal or kite mark, a link leading to a webpage or application which includes all relevant responsible gaming information required by the Directive (must be clear, intelligible and within one click from anywhere on the website), a link which enables players to refer to one or more gambling help organisations and a message before first deposit providing information and access to available responsible gaming tools and limits.
IGA offers comprehensive support for the licensing process.
Our services include application assistance, due diligence checks, company formation, appointment of a local director, AML/CFT compliance, ensuring operational transparency, demonstrating financial stability, implementing data security measures, documenting operational policies, ensuring technical infrastructure compliance, keeping abreast of regulatory directives and providing strategic consultation and guidance.
Contact us for further information on how we can assist you.
The application timeframe is estimated at 6-12 months and depends on the applicant’s ability to promptly furnish the MGA with required information. Any incomplete applications are set to ‘incomplete’ status for 60 days. If a complete application isn’t re-submitted within this period, the authority rejects and closes the application off. After obtaining their licence, licensees have a 60-day period to commence operations. Regardless of the start date, licence fees, compliance contributions, and Gaming Tax are due from the licence issuance date.
The duration of a gambling licence is indefinite as long as licence holders comply with MGA regulations within the stipulated scope. There are no validity restrictions on the licence, however, all licence holders are obligated to pay a fixed, non-refundable annual licence fee in advance for the 12 running months from the issuance of the licence and every anniversary thereafter.
Non-residents are allowed to own a gambling company in Malta, with no limitations imposed on the nationality or residency of the company’s owners. One of the most common legal structures for gambling businesses in Malta is a Private Limited Liability Company (Ltd) with 1-50 shareholders, all of which can be non-residents.
A Malta-based gambling company is permitted to have directors who are not local residents, provided that a number of requirements and obligations are met by the company and its directors to comply with the regulations set by the MGA.
Information on the capital requirements may be found in the ‘Requirements’ section under ‘Capital Requirements’
Entities holding a gambling licence in Malta are subject to various taxes and fees, including a Corporate Income Tax imposed on the company’s profits, a Gaming Tax levied on gaming revenue generated within Malta, a Value Added Tax (VAT) applicable based on standard VAT rules in addition to various fees, administrative charges and social contributions.
With an MGA licence an operator can target all regulated markets, provided that online gambling is legal and not subject to local licensing requirements in those jurisdictions and unless the country is blacklisted or greylisted. There are a number of caveats to this rule though, so it is important to stay up-to-date with the evolving regulations.
What is most important for international operations is that if a company based in a country inside the European Union has a gambling licence, its services can be offered throughout the EU – leveraging the potential market of over half a billion people. This is legally framed by the EU Freedom of Establishment law and supported by judgments of the European Court of Justice (European Court of Justice ruling of 9th September 2010 – C316/07).
By definition, the term “key function” means an important function, role or task carried out by a person in connection with a gaming service or a gaming supply, as may be prescribed by the Gaming Authorisations and Compliance Directive (Directive 3 of 2018).
Key Persons are required to have full knowledge, understanding and access to the applicant’s or licensee’s operations, as may be necessary for them to carry out their respective Key Function/s.
Applicants are required to be fit and proper in order to carry out their respective roles, not only at the time of their application for a Key Function Certificate, but also on an ongoing basis thereafter.
Any changes in the individual responsible for any of the Key Functions must be notified to the MGA, and the new individual appointed must likewise be approved by the MGA.
Essential components for the setup of a licensee’s operation include those hosting Random Number Generators, jackpots, games, gaming database, player database, financial database, control systems and any other component deemed critical by the Authority.
The applicable regulations and directives may be found here.
At IGA Group, we are committed to providing the best possible service to our clients by using our wealth of experience and industry knowledge to maximise the potential of their business. We have years of experience in the gaming sector, through previous employment with gaming companies, through software companies providing technical solutions and through various consultancy engagements at the strategic, operational and regulatory levels.
Our expertise covers the whole spectrum of operator activities, including legal, finance, operations, online gaming regulation, compliance, AML, technical , licensing, corporate, SEO, support, company formation, mergers & acquisitions and more…