All the latest gambling news confirms the stable rise of the gambling business, even before the coronavirus lockdown. It forces businessmen to think about opening online casinos and betting firms. However, conquering a global market can be possible only by having a gambling license, and Malta's one seems to be a perfect choice.
Preconditions that made Malta a place for receiving a gambling license
Being a small island in the Mediterranean Sea, Malta is undoubtedly a unique country. It is one of the smallest states in the world in terms of territory but is among the most populous ones at the same time.
The archipelago that forms Malta consists of a few small islands. Their location in the middle of the Mediterranean Sea made those territories a desirable destination to own for dominant European powers throughout the whole history. Malta served as the port and military base for different antique countries, and the last was British ruling since the beginning of the 19th century till gaining independence in 1964.
This fact explains why the English language is the second official language except for Maltese as the primary one. What is interesting, this aspect makes Malta a rather flexible place for different activities, starting with tourism, and ending with getting gambling licenses.
Another crucial benefit of Malta is its membership in the European Union since 2004 and in the United Nations since gaining independence. Joining the Eurozone monetary union in 2008 widened the possibilities of this small country to be among the comfortable places to have a partnership with.
However, Europeans regarded Malta as the desirable place much earlier. Thus, STMicroelectronics has built an assembly line in the country in 1981, which now is the biggest private employer on the island. It has shown that the country was ready for a tight partnership with the rest of the world years ago.
Also, the lack of freshwater limited the agricultural potential of the country and forced it to focus on other ways of earning money. Due to its favourable climate and geographical location, Malta is a wonderful place to spend a vacation, which makes tourism the core direction in the economy. However, the government doesn't bet only on one sector, so international trade and finances are also vital areas. Thus, the Maltese gambling license is one of the oldest and world-known in the gaming industry, and that will be the primary topic to discuss in the further article.
Gambling traditions in Malta
Malta has almost 20 years of experience in regulating and providing gambling activity. The Malta Gaming Authority (MGA) has been established in 2001 and now is the core legislative structure that provides control over the gaming and betting firms that are registered on the island. Those who want to receive a Malta gambling license also have to cope with this organisation, which is one of the most experienced in the world.
As it has been mentioned above, Malta has limited natural opportunities to earn money, so their attention to online gaming is not accidental. However, since the MGA foundation, they provide rather strict rules towards existing and new clients. Getting a license in Malta usually means that the gambling company delivers all the needed protection and quality measures to their clients.
Traditionally, MGA's primary rules are based on the following international directives and regulation documents:
- Anti-Money Laundering Directives, including the recent European AMLD5;
- Counter-Terrorism Financial Regulation;
- Unusual Transactions Act;
- Know Your Customer Policy.
Among the crucial aspects that confirm the serious Maltese approach to giving licenses is the requirement to divide a company's account and players' funds. It allows excluding the loss of the players' money if the gambling provider goes bankrupt. Such aspects make Malta’s gambling certificate among the most authoritative all over the world.
Another necessary step that MGA makes before giving a license is the thorough check of all the elements related to opening a new online casino or a betting website. Thus, experienced representatives check all the application documentation, serviceability of the website, and suggested slot machines or lotteries, compliance with all the legal requirements, and so on.
Actually, Malta can be considered as one of the pioneers in giving the gambling licenses of the highest quality. Their rules and laws provide strict limitations towards new gambling providers, which provides a superior level of protection to the players. It makes Maltese gambling license a guarantee of the quality for both casinos and players who are using a gaming provider.
Types of Maltese gambling certificates
Being a progressive place for getting a gambling license, MGA suggests 4 types of permissions:
- Random generator games. It relates to all the gambling activity, where the random number generator determines the winner. This principle, including lotteries, holds a lot of games in both online and offline casinos.
- Events' outcomes or bookmaking. This type of license allows acting as a bookmaker, where the player wins in accordance with the third-party’s results, usually events that assume sports bet variety . In this case, the gaming provider receives revenues from a regulated commission for the provided services, and when players don't guess the right outcome.
- Player vs. Player. That is the commission-based type of receiving revenues as the competition is held among the players. Online poker sites are a perfect example of such kinds of services.
- Aggregating statistical performance. That is a mix of bookmaking and statistics, which helps to win prizes when a player has forecasted a long-lasting outcome. Usually, the talk is about fantasy sports events.
The variety of certificates allow a businessman to choose one of the directions to focus on and predetermine the application procedure, which slightly varies from type to type. However, the requirements are still very similar as most of the needed documentation is related to opening an office in Malta with appropriate spendings. So, if one wants to become a multifunctional gambling provider with all types of services, he or she needs a broader pool of proper programming descriptions.
How to get a Malta gambling license in 2020?
The application process for receiving Maltese gambling documentation usually lasts between three and six months. During this period, MGA will check all the needed information about the potential gaming business owner and all the required technical data. To make it a bit clearer, we highlight the most important steps and elements that should be made to receive a Maltese license:
- The full list of personal documents (passport, curriculum vitae, bank details, recent utility bills, confirmation of no criminal records, and so on).
- Incorporate a new firm in Malta (including office, office workers, and related documentation).
- A detailed description of the provided games (including the international requirements to random generator games, appropriate equipment that will be holding online games).
- Open Maltese hosting and server (MGA requires only local technical facilities for better control of the suggesting services).
- Prepare specific bank accounts (In Malta, you need merchant and corporate bank accounts for the proper functioning of a gambling firm).
- Pay for application and receiving a required license (the financial issue will be discussed in more detail further in this article).
What is interesting, MGA is ready to help everyone during the application process. They recommend the list of the required documentation concerning all the aspects and consult business owners. It decreases the number of unlucky tries made by potential gambling license holders due to missed details during the application, which confirms the country's focus on the gaming industry and expertise in this area.
How much does a Maltese gambling license cost?
Taxes and other regular payments
Maltese government and related organisations formed a rather flexible taxation system for new businesses. Their approach is based on two factors: help for the newcomers and showing that the certificate is respected all over the world. Moreover, they also understand that some operators can buy the license of only one type, and operate on the third-party platforms, which are also certificated by MGA. That is why Malta suggests several taxation discounts for newly created gambling firms and flexible conditions:
- For type 1 license, Malta requires €4660 per month during the first half of the year, with a further €7000 monthly payment.
- For type 1 working on type 4, MGA requests €1200 per month.
- For type 2 working on type 4 and type 2 only, taxes depend on the revenues and are 0,5% of the gross bets.
- For type 3 working on type 4 and type 3 only, the tax rate is 5% on the real income.
- For type 4, there is no tax during the first half of the year, then €2330 monthly till the end of the year, while the further monthly payment is €4660 till the end of the license period.
- For types 1, 2, or 3, the annual certification fee is €25 000.
- For type 4, the Maltese government imposes a regular payment of €10 000 per year.
- Additional 5% tax for the players that are based in Malta and use a gambling platform.
MGA has also provided limits on the maximum taxes paid during the year for one license type by its holder, which is €466 000. It means that the actual tax rate depends on the revenue amounts. So, if an online casino or betting firm brings a lot of money, the owner will pay fewer tax rates and earn more. To facilitate Maltese license value on the market, MGA has provided flexible taxation rates.
Application and license cost
However, taxes and regular fees are not the only spendings that a business owner should pay for receiving a Malta gambling license. Thus, there are some one-time payments, that can be divided according to its type and destination:
- €5000 – a new certificate application cost;
- €5000 – a renewal fee for any license type;
- €2500 – the auditing of the systems;
- €3500 – the auditing of compliance;
Of course, one has to be ready to pay for other types of services that are related to opening a business on the island. Thus, hosting and server sides of the gambling platform vary from 8 to 12 thousand euros for one year, while hiring and maintaining appropriate managing staff usually costs another 5-9 thousand euros per month. Also, there can be one-time spending for consultancy services, which can vary depending on the number of questions and work that should be done by the outside party.
In total, receiving a Malta gambling license for one year can cost from €100 000 and up to a few hundred thousand euros, depending on the needed certification types and amount of outside consultancy help.
Advantages of having Maltese gambling certificate
As Malta is one of the most wishful destinations in terms of receiving a gambling license, they have a rather impressive list of advantages for the potential gaming business owner:
- High reliability of the certificates, which helps in promoting a newly appeared online casino or betting platform.
- Flexible application approach, which includes the help of the MGA and relatively short terms of gaining a license.
- A developed infrastructure, as the government of this country has created all the necessary conditions for new abroad businesses, which are facilitated by a stable political atmosphere.
- Ability to choose the gambling direction and pay only for one of the four types of activity.
- Leading legislation approaches in terms of gambling, which allow creating reliable protection of both players and casino providers.
The aforementioned list of benefits confirms again that a Malta gambling license is one of the most desirable all over the globe. Those who have decided to open and develop an online casino or betting firm should necessarily review Maltese conditions of receiving a certificate.
Of course, the financial side cannot be regarded as the advantage of the Maltese license, but the government tries to create suitable conditions for everyone. Thus, their flexible approach towards new gambling companies can be only the first step in this direction that will receive a further positive continuation.
Disadvantages of getting a Malta gambling license
Although a perfect reputation and flexible application approach force to review Malta as the place for receiving a gambling certificate, there are some drawbacks of trying to have it:
- High taxes and fees for the desirable license.
- Different types of licenses create enough confusion and too many additional steps to be done for gaining a certificate.
- Strict requirements towards new businesses, including opening a firm on the island with keeping a managing staff and hardware directly in Malta.
That's true that Maltese gambling permission is not the cheapest one even though MGA tries to make it flexible. Rather strict conditions of having and keeping gambling firms in Malta can also be a drawback for some business owners, but, at the same time, it guarantees more protection to all sides of the gaming process.
Traditionally, people choose between the reliability and costs, and a Malta gaming license is more about better protection and worldwide authority. However, the financial side creates a balance between two major approaches.
Comparison of Malta with other gambling licenses destinations
As there are about 40 states that also give gambling licenses, it can be hard to compare Maltese one with every offer. However, such a comparison can be simplified by grouping all the certificate providers into five big categories. We won't name countries that belong to every group not to confuse the reader with particular examples, while our categorisation will give an overall look at the licensing processes all over the world.
Reliable certificates for internal markets
Traditionally, the regarded states are developed ones and focused on providing clear and strict control over their internal gambling market. It leads to creating reliable rules and policies that protect players, make controllable payments, and regulate advertising processes. Those countries usually focus on their internal market and give licenses only for the providers that want to enter their market.
Maltese certificate is much more flexible in terms of international reputation and gives wider opportunities to its owner. However, the countries from this category often reject any outside license, so even Maltese one will not help. On the contrary, if the provider wants to conquer most of gambling Europe states, Malta license is more suitable for this target as it opens numerous markets instead of a single territory.
Reliable certificates for the international market
That is the group of countries, to which Malta also belongs. Traditionally, the representatives of this category are tiny countries with long-lasting experience in gambling certification. They decided to focus on international financial and gaming markets to expand their influence and trade possibilities. Those countries are usually developed while their certificates are respectable on the global scene. To save such a reputation, they try to implement all the innovations in terms of safety and player protection like Anti-Money Laundering Directives.
Balanced offer with a few attractive aspects
States in this category are looking at the previous one and hope to receive the same level of reputation. However, at some point, they made an emphasis on lower taxes or not so strict accepting rules, which influenced the attitude to them. In general, representatives of this group offer better conditions for those who want to receive a gambling license, but with a limited reputation as the outcome.
Malta is a traditional competitor to this group as the authority aspect gives it a privilege. On the other hand, Maltese higher taxes and more complicated acceptance processes sometimes force businesspeople to look for easier conditions and moderate levels of all the aspects concerning opening a gambling firm.
Inexperienced providers of licenses focused on becoming an international destination
This category can be easily compared to the previous one. However, a decreased general requirements during the acceptance processes don't allow them to compete for the most prospective businesses. So, representatives of this group want to receive wide recognition, but they are forced to make some incredible concessions to interest at least some companies.
The Mediterranean island significantly overcomes the representatives of this category in reputation, but cannot compete in the elements like taxes or ease of the application process. However, clients of both approaches are too different to compare them.
Concrete instances focused on the internal market
This is a group of countries, which satisfy some rather specific internal needs. Such licenses have limited weight even in terms of player or payment protection and have appeared to legalise some local eSports betting providers or national lotteries.
There is no sense to compare Maltese gambling certificates with those as they are too different and have no intersection points.
Without a doubt, Malta is among the primary gambling license destinations for prospective businesses due to several reasons. High reliability and perfect reputation, long-lasting gaming traditions, innovative technical approaches, and flexibility towards every client are the primary reasons to pay attention to this country. Although the taxation system is pretty tough for a gambling business newcomer, Maltese certificates can boost a new casino or betting firm just because of its authority. If someone relies on the financial side as the core argument, he or she has to review other licensing destinations.