Malta Online Gaming Licences

In mid-2003 the Malta Lotteries & Gaming Authority announced that a new licensing regime for online gaming was in the pipe-line and that it was very likely that these new regulations would be issued by the end of February 2004.

These new Remote Gaming Regulations were effectively published and entered into force in April 2004. Through these regulations other gaming activities, besides betting, were introduced. these ranged from online casinos, casino-style games, betting exchanges and lotteries. These new regulations have ensured that not only those who are highly interested in the commercial and tax advantages offered by Malta, are satisfied, but even those who are concerned that there could be a proliferation of under-regulated Maltese licensed sites.

A system of checks and balances was effectively created: an advantageous and competitive regime on one hand and regulation and seriousness on the other.

Through this system, the Maltese government ensured that the regulations would offer protection to the players, whilst at the same time, excessive bureaucracy and red-tape are avoided, hence enhancing Malta’s reputation as a reputable financial services jurisdiction.

Highlights of the Legislation

bullet-red.png Raison d’tre behind the Regulations

bulletarrow.png The proper operation on interactive games
bulletarrow.png The protection of players
bulletarrow.png The prevention of money laundering
bulletarrow.png Exigencies of public interest

bullet-red.png Mechanics

bulletarrow.png The appointment by the Licensee of one key official to personally supervise the operations
bulletarrow.png Appointed key individual person must be a director of the company and is to report to the Authority
bulletarrow.png The Online Gaming System to be tested by an approved laboratory at least within six months prior to the application
bulletarrow.png Player Protection (to come into force within 1 year from the date of these regulations
bulletarrow.png Granting of License – valid for 5 years on a non-refundable basis

bullet-red.png Player Protection

bulletarrow.png Players funds to be kept separate from Licensees own funds
bulletarrow.png Licensee shall instruct and authorize the credit financial institution by which a players account is held to disclose any information as may be requested by the Authority
bulletarrow.png Funds in the players account, including funds in transit or in the process of being cleared through the banking system must be at all times at least equal to the aggregate of the amount standing to the credit of players account held by the licensee

bullet-red.png Four classes of licenses

bulletarrow.png Class 1 Online Gaming License;
bulletarrow.png Class 2 Online betting office license or an online betting exchange office license;
bulletarrow.png Class 3 License to promote and abet gaming from Malta (includes betting exchanges & poker operations)
bulletarrow.png Class 4 License to host and manage online gaming operators, excluding the licensee himself.

bullet-red.png Taxation on all Three Classes

bulletarrow.png Online Gaming License – a sum of Euro4,700/month in the first six months after the issue of the license & Euro7,000 per month for the entire duration of the of the license period.

bulletarrow.png Online gaming operated by a Class 4 Remote Gaming licensee, licensee who operates the hosting platform shall not pay any tax for the first six months after the issue of the license, then he pays Euro2,350 per month for the subsequent six months and subsequently Euro4,700 per month for the entire duration of the license.

bulletarrow.png Licensees operating from the hosting platform  – a sum of Euro1,200/month.

bulletarrow.png Online Betting Operations – a sum equivalent to 0.5% on gross amounts of bets.

bulletarrow.png Online Betting Exchanges – a sum equivalent to 0.5% on the sum of all net winnings calculated per player

bulletarrow.png Pool betting a sum equivalent to half of one per centum (0.5%) on the aggregate of stakes paid.

Provided that in all cases the total maximum of tax payable per annum by one licensee in respect of any one license shall not exceed Euro465,000.

The Malta Remote Gaming Regulations 2004 have undergone a major revamp.

The proposed new regulations were publicly presented by the Lotteries and Gaming Authority (LGA) in mid-October 2005. The LGA commissioned the Malta Remote Gaming Council (MRGC) to lead the consultation process and the Legal & Regulatory Workgroup of the MRGC has actively worked on suggestions for presentation to the LGA. These were presented to the LGA in November 2005 and are now awaiting final approval.