Tax Malta, Tax Efficiency Malta, Gaming Malta, Shipping Malta, Financial Services Malta, Trusts Fiduciary in Malta
Remote Gaming
Background
Malta was one of the pioneers amongst the European Union Member States which regulated remote gaming. Maltese law provides for the establishment and operation of companies engaged in remote / online gaming activities (such as online casinos, casino-style games, betting exchanges and lotteries) which benefit from very attractive fiscal incentives. The remote gaming sector is dynamic and has rapidly grown in Malta.
The first online betting legislation in Malta was enacted in 2000, established under the Public Lotto Ordinance (L.N. 34 of 2000), to regulate offshore betting offices. Since then, the Lotteries and Gaming Authority (LGA) has been set up as the single regulatory body responsible for the governance of all forms of gaming in Malta. Following a publication in April 2004 of the revamped Remote Gaming Regulations, Malta became the first EU member state to regulate Remote Gaming.
In March 2005, the Malta Remote Gaming Council (MRGC) was formed. This Council, an initiative of the Lotteries and Gaming Authority, brings together Malta licensed operators, data carriers, internet service providers, lawyers and professional services providers giving them the opportunity to meet new challenges and voice their opinions from an operational point of view, in order to complement the work and research carried out by the regulator.
License Application Process and Fees
The Lotteries and Gaming Authority applies a rigorous process prior to granting a remote gaming licence. The application process is divided into three stages. The first stage is to conduct a fit and proper exercise on the applicant. The Authority analyses all information related to persons involved in financing and managing the operation and on its business viability. The Authority conducts probity investigations with other national and international regulatory bodies and law enforcement agencies. It also carries out a financial analysis of the business plan.
On successful conclusion of the first stage the applicant is assessed on the instruments required to conduct the business. This process includes examining incorporation documents, the games, the business processes related to conducting the remote games, the rules, terms, conditions and procedures of the games, the application architecture and system architecture of the gaming and control systems. Normally the first stage is completed within 4 weeks and the second stage within 8 weeks, depending on the correctness and completeness of the information submitted to the Authority.
At the end of the second stage the applicant is given a licence to operate remote gaming with the intent of obtaining a certification of compliance within six months. The applicant establishes the business in Malta, concludes all agreements and carries out testing of the set-up pending final approval by the Authority and the granting of compliance certification. This process would normally take from one to two weeks to be performed.
License Type, Class and Gaming Tax
The First Schedule of the Remote Gaming Regulations stipulates the licenses that can be applied for and the Fourth Schedule provides for the gaming tax for each type of licence. The below table illustrates the detailed interpretation of the provisions.
| Class | Operation Type | Gaming Tax Applicable |
|---|---|---|
| 1 | Traditional Casino Style Games, Slots, Bingo, Live Casino Games, Scratch Cards and Lotteries. | The first six months attract a fixed gaming tax of €4,660. Thereafter a fixed gaming tax of €7,000 applies. |
| 1 on 4 | Traditional Casino Style Games, Slots, Bingo, Live Casino Games, Scratch Cards and Lotteries hosted by a platform. | A fixed gaming tax of €1,165 per month applies. |
| 2 or 2 on 4 | Fixed Odds Betting and Binary Betting. Pool Betting. Betting Exchanges partaking in the gaming risk. | 0.5% on the gross bets accepted. 0.5% on the aggregate of stakes paid. 0.5% on the sum of net winnings calculated per player and market. |
| 3 or 3 on 4 | Player to Player Poker, Live Poker, Bingo or Skill Games. Betting Exchanges not partaking in the gaming risk. | A 5% gaming tax on Real income applies. Real Income is defined as total commission less bonuses played, intermediary commissions and deposits processing fees. |
| 4 | Platforms hosting and managing Operators of Sports Book, Betting Exchange, Casino, Live Casino, Poker, Live Poker, Bingo or Skill Games. | The first six months do not attract any gaming tax. The subsequent six months attract €2,300 gaming tax per month. Subsequent months attract €4,600 per month. |
Key Official
At the end of the second stage of the application process the Licensee must appoint at least one Key Official who shall be responsible to personally supervise operations and ensure compliance with applicable laws, regulations, LGA Directives and conditions of the License.
The Key Official is also required to be a Director of the Company which holds the Malta License and therefore the Key Official’s functions will include all the tasks associated generally with company directors under Maltese Law.
Malta Company as a Corporate Vehicle for Remote Gaming Operations
A Malta Company is a convenient, tax efficient vehicle for the carrying out of these activities from Malta. Maltese companies are fully regulated under the Companies Act 1995 and depending on the circumstances offer attractive fiscal incentives.
