Gambling is one of the most successful, profitable and dynamic business sectors. Like any business, this industry has its own nuances, among which the issue of obtaining a license for legal activity is of the greatest importance. Malta is one of the most popular jurisdictions certified for issuing gambling licenses. Why is it in demand and where does the Maltese gambling license work? Read on to find out more.
- Malta is a politically stable region where no wars or other conflicts take place.
- The authorities conduct a flexible modern policy in relation to the gambling business and allow any kind of gambling including DFS tournaments organization.
- Adequate requirements for businessmen, quick registration (takes a few days) of a gambling license.
- Low taxes, tax benefits, low obligatory payments.
- Local banks do not impose strict requirements when opening accounts.
- There is a chance to get a residence permit for non-residents.
To top it all off, Malta is located in Europe and is a member of the EU. This is the best choice for those who want to run a business in Europe and neighboring regions.
Maltese Gambling License Requirements
To become the holder of gambling license in Malta, one must fulfill a number of requirements:
- The regulator (Malta Gaming Authority, MGA) issues a license only to companies registered on the island;
- The company must have at least two shareholders (individuals or legal entities);
- The company is obliged to provide a full package of necessary documents in order to be registered;
- To be able to work in Maltese jurisdiction, it is necessary to prove the ability to conduct this type of business and make payments on obligations.
Gambling is regulated by a number of laws and acts. They include a detailed description of the operating regulations of the online sector, which was legalized in 2004.
Read more: Online Gambling in Eastern Europe – Part 1
Types of Maltese Gambling Licenses
For the companies that meet the requirements, MGA issues four types of licenses:
- Class 1. This license type is given to operators who have casinos, lotteries, table games and slot machines. The main condition is the presence of a random number generator (RNG) approved by the regulator. RNG must be part of the operator’s software. This category also has a subclass “1 on 4” for skill games;
- Class 2. Companies that accept online bets on certain single events obtain a Class 2 License. Bookmakers, totalizers and other establishments that place fixed odds for bets and have certain risks during their operation fall into this category;
- Class 3. Operators involved in organizing games (poker tournaments, bingo, betting exchanges, etc.) between the participants receive a Third Class License. The organizer collects a commission from the participants for the events’ arrangement and does not bear any risks, unlike the players. The category has a subclass "3 on 4" for those companies which operate exclusively in Malta. This subcategory may be also obtained by the Class 4 License holders;
- Class 4. Developers of gaming software and gambling platforms that provide hosting services, as well as online casinos operating under any Maltese gambling license, must obtain a Class 4 License.
To obtain a license, you must submit an application, attach a business plan, copies of shareholder’s documents, company’s financial statements, etc. It takes from three to four weeks to review the application. After that you will receive a temporary license valid for six months. If during this period the company fulfills all the requirements, then the temporary license is replaced with a permanent one, valid for five years.
Read more: Online Gambling in Eastern Europe – Part 2
Taxation for Gambling Business in Malta
Tax fees correspond to the class of the license obtained:
- The Сlass 1 License holders who have received a temporary license for six months, pay € 4,660 per month. Six months later, after receiving a permanent license, the monthly payment increases to € 7,000. Those who received a license of the subclass "1 on 4" pay € 1,200;
- Operators with a Class 2 License are required to pay 0.5% of the bet amount and 0.5% of the player’s winnings on a betting exchange;
- Operators who obtained a Class 3 License pay 5% of the profits;
- Сlass 4 License is tax-exempt during the first six months; in the next half a year operators are obliged to pay € 2,660 per month, a year later – € 4,660 per month.
In addition, the Maltese gambling license holders are required to pay a one-time license fee within two weeks after obtaining the license. This fee will have to be paid annually.
Operation in Maltese Jurisdiction
Despite flexible liberal gambling legislation and soft tax conditions, MGA reserves the right to control business transparency and compliance with the requirements.
Licensees are required to pay taxes in a timely manner, protect data, check the integrity of servers and security systems, and conduct an independent audit of the company.
All data must be available to the regulator. In case of non-compliance with the conditions, operators may be subjected to an audit or technical inspection, the purpose of which will be to identify violations of current legislation.
As mentioned earlier, German authorities announced the introduction of a new regulatory system for betting operators starting from 2020.
Read more: GDPR Application Rules