Malta's Remote Gaming Licenses Regulations

Under the new Remote Gaming Regulations,

in April 2004. These regulations were a much awaited mile-stone superseding the previous law regulating offshore betting offices (The Operation of Betting Offices Regulations, 2000 - LN 34).

Under the old law, licensing of a betting office setting up shop in Malta required a presence in Malta in the form of a premises from which the betting office's operations were carried out. These regulations covered only betting operations and did not cater for computer-generated games. Infact the internet was merely sanctioned as a communication medium to the call centre.

Other factors also hit the Maltese offshore betting regime badly: the UK responded to the exodus of UK operators by changing its betting tax to 0%, hence resulting in 16 operators closing down shop in Malta; the Maltese offshore regime was being phased out and the need was being felt that new Regulations were necessary. These had to reflect the needs of a changing market and to cater for other emerging forms of gaming, besides betting.

The new Remote Gaming Regulations, 2004 presented a completely new solution to all types of operators and activities. Activities range from betting, online casinos, casino-style games, betting exchanges, lotteries and bingo to gaming software houses and marketing companies.

The aim of the new regulatory regime is to provide a Cyber-Space Gaming License that is both technology neutral and game neutral – encompassing any type of gaming using any means of distance communication, including internet, digital TV, mobile phone technology, telephone and fax. 

Raison d'Etre behind the Regulations

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

Supervisory Body

The regulatory authority in charge of issuing remote gaming licenses is the Lotteries & Gaming Authority.

The Licensing Process

The licencing process is regulated by the Remote Gaming Regulations 2004 issued under the Lotteries and Other Games Act. To provide remote betting/gaming services from Malta, an operator needs to obtain a licence of the class appropriate to its operations. The framework requires licensees in accordance to LGA's policies, laws and regulations , as well as anti-money laundering laws, e-commerce legislation and any other applicable legislation.

Player Protection

The new licensing laws give particular focus to player protection. In fact, the operator has to follow particular rules, including:

Players funds to be kept separate from Licensee’s own funds

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 to the LGA

Funds in the player’s 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

Four classes of licenses

Class 1 – Online Gaming License (covering casinos & casino-style games);
Class 2 – Online betting office license or an online betting exchanges;
Class 3 – License to promote and abet gaming from Malta (includes betting exchanges & poker operations)
Class 4 License to host and manage online gaming operators, excluding the licensee himself (software platforms from which gaming operators can operate).

Taxation on all Three Classes

Online Gaming License - a sum of LM 2000/month in the first six months after the issue of the license & Lm3,000 per month for the entire duration of the of the license period.

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 one thousand Maltese Liri (Lm1,000) per month for the subsequent six months and subsequently two thousand Maltese Liri (Lm2,000) per month for the entire duration of the license.

Licensees operating from the hosting platform  - a sum of Lm500/month.

Online Betting Operations - a sum equivalent to 0.5% on gross amounts of bets.

Online Betting Exchanges - a sum equivalent to 0.5% on the sum of all net winnings calculated per player

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 Lm200,000
.

See also:

Our i-Gaming Unit: licensing, company formation & administration, recruitment, accounting & tax planning, web hosting...
Gaming News
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