Maltese Online Gaming Licences
The LGA (Lotteries and Gaming Authority) is a public single regulatory body that is responsible for the governance of all forms of gaming in Malta.
Background
Malta is the only European Union member state which regulates 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 provisions of the Remote Gaming Regulations regulate it.
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 Maltese Lotteries and Gaming Authority (LGA) has been set up and is charged with overseeing the regulatory infrastructure and implementation of remote gaming operations set up 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 was launched. This Council brings together all Maltese remote gaming licensees, 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 car-ried out by the regulators The LGA also launched an on-line forum aiming to create an on-going discussion between all stakeholders, Internet Service Providers (ISP), and legal and financial representa-tives from the Maltese remote gaming industry.
Licensing of Remote Gaming Operations
All operators of remote gaming in or from Malta must possess a valid licence of the relevant class as set out in the First Schedule of the Remote Gaming Regulations. Applicants must satisfy relevant criteria amongst other things they must be:
1. limited liability companies registered in Malta,
2. they must satisfy the “fit and proper persons” test which involves rigorous due diligence checks on all persons (in-dividual or corporate) who have a significant stake in the enterprise,
3. demonstrate business, financial and technical ability to carry out the operation, and
4. demonstrate its solvency in order to ensure player winnings and deposit returns are safeguarded.
Malta Company as a Corporate Vehicle for Remote Gaming Operations
A convenient, tax efficient vehicle for the carrying out of these activities from Malta is the Maltese Company. Maltese companies are fully regulated under the Companies Act 1995 and depending on the circumstances may offer attractive fiscal incentives.
Gaming Tax
The Legal Notice 176 of 2004 proposes a gaming tax under the fourth schedule, which varies depending on the type of licence held as follows:
Class One: €4,600 per month for the first six months; thereafter a monthly flat rate tax of €7000;
Class Two: fixed odd bettings: 0.5% on the gross amount of stakes accepted; on betting exchanges (where the exchange is involved in the risk): 0.5% on the sum of all net win-nings calculated per player per betting mar-ket; pool betting: 0.5% on the aggregate of stakes paid;
Class Three: 5% on net income. The net income is defined as revenue from rake less bonus, commissions and payment processing fees (e-commerce fees);
Class One on a class Four: the gaming tax payable by the casino operator is €1,200 per month. The gaming tax payable by the host platform is NIL TAX for the first six months of operation, €2,300 per month for the subsequent six months and €4,600 per month thereafter for the duration of the licence.
There is a tax capping mechanism which limits the gaming tax payable annually by any one licensee to a maximum of €466,000.In the case of class one under class four situation, the tax cap of €466,000 is applicable to the total tax payable by ALL licensees in that ‘cluster’ together.
The table above, should simplify the different licencing fees and gaming tax applicable to each class:
Key Official
Every licensee must appoint a key official who shall be responsible to personally supervise the licensee’s operations.
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The Lotteries and Gaming Authority (LGA) is a public single regulatory body that is responsible for the governance of all forms of gaming in Malta.