Online Gambling License in Malta

E-Gaming

In the autumn of 2000 the Maltese government passed legislation enabling online betting centres to be set up in the country, and this legislation, coupled with provisions from the Income Tax Act written specifically for international companies, made Malta an attractive location for casino and sportsbook operations.

A large number of companies from around the world expressed interest in Malta, including Stanley Leisure, William Hill, Ladbrokes, Paddy Power, Unibet, GC Sports, International Allsports, and Eurofootball.

Malta became the first EU member state to regulate internet gaming in May 2004 with its Remote Gaming Regulations under the Lotteries and Other Games Act 2001. By the end of 2009 Malta had attracted 330 remote gaming companies and processed over 500 licenses. These businesses employ about 5,200 people in Malta, and service around 10% of the world’s internet gaming market. They generated tax revenues for the government of EUR52.5m in 2009.

The e-gaming industry in Malta is regulated by the Lotteries and Gaming Authority, which was established in 2002 and is responsible for the governance of all gaming activities in Malta including casino gaming, commercial bingo games, commercial communication games, remote gaming, sports betting, the National Lottery and non-profit games. According to its mission statement, the Authority’s role is to ensure that “gaming is fair and transparent to the players, preventing crime, corruption and money laundering and by protecting minor and vulnerable players.”

In 2002 the Malta Lotteries and Gaming Authority put together the legislative framework for a new licensing regime encompassing online casinos, sports betting, betting exchanges and lotteries, which came into effect in early 2003. Said the Authority: “This framework has the objective of providing regulation which is strong and serious but not unnecessarily bureaucratic, ensuring vigorous protection for users of online gaming, and dovetailing with Malta’s long-established and reputable financial services sector.”

There are four classes of license available to operators in Malta, as follows:

• Class1 – For operators managing their own risk on repetitive games. This class covers casino-type games.
• Class 2 – For operators managing their own risk on events based on a matchbook. Under this class operators can offer fixed odds betting.
• Class 3 – For operators taking a commission from promoting and/or betting games. This class includes peer-to-peer games, poker networks, betting exchanges and online lotteries.
• Class 4 – To host and manage remote gaming operators, excluding the licensee themselves. This is intended for software vendors who want to provide management and hosting facilities on their gaming platform.

Licenses are granted for a period of five years and licensees must have the core part of their online operation physically located in Malta.

The amount of tax paid by online gaming companies located in Malta depends on the type of license they hold: Class 1 license holders pay EUR4,660 for the first six months, then EUR7,000 per month thereafter; Class 2 firms involved in fixed odds betting pay a 0.5% tax on the gross amount of bets accepted; Class 3 license holders pay a 5% tax on real income; and Class 4 license holder pay no tax in the first six months of operations, then EUR2,330 per month for the following six months, and EUR4,460 per month thereafter. The maximum amount of tax payable annually in respect of any one license is EUR466,000. In 2011, application and annual license fees are EUR2,330 and EUR8,500 respectively for all classes of license.