Malta7 Things to Know About Malta Gaming License in 2024

February 17, 2023by Tetra Consultants0
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  • Online gaming is a highly restricted business in countries like Malta. Hence, any company that intends to operate online gaming in any manner must first get a gaming license
  • According to the licensing experts at Tetra Consultants, a gaming license may envisage a complex application process and gaming taxes, but it is recommended for established international companies seeking an “immediate credibility boost” as It also fosters trust between the operator and the client, which is essential in such a competitive industry. Further, with such authorization, you may open a payment account, acquire payment processors, and negotiate partner and advertisement arrangements. Moreover, if you operate your gaming business without a license, you are breaching the law and might risk prison, penalties, or being prevented from operating in online gaming industry for a certain period of time.
  • The Malta gaming license is highly sought after across the world. The license is the “gold standard” of casino regulation, giving the bearer an instant credibility boost and letting people know they are into serious business. But the procedure to acquire one such license can be overwhelming if you are not well-versed with the legislative norms governing the gaming industry in Malta. As a consequence, it is always advisable to enlist the help of a professional. In this article, Tetra Consultants’ team of licensing experts has laid down the 7 important things to know before you proceed to apply for a Malta gaming license and jumpstart your gaming business in the nation.

Types of Licenses:

  • There were various distinct types of licenses available in Malta until around two years ago. The sort of license needed was determined by the type of games intended to provide. The MGA then simplified the procedure by introducing two options: B2B and B2C. There is no need for further licenses or add-ons; instead, the operator chooses whatever class is appropriate and adequate. Now. the licenses are categorized as below:

Business-to-Consumer (B2B) services: Gaming Service License Types

  • Type 1 –(casino games, lotteries with a guaranteed prize).
  • Type 2 –(sportsbooks, e-sports).
  • Type 3 –(poker, pool betting, lotteries, bingo, lotto, peer-to-peer games).
  • Type 4 – (Skills Games)

Business-to-Business (B2C) services: Gaming Supply Licence Types

  • Types 1, 2, and 3 – Gaming Supply Licence (Intended for platform providers)
  • Type 4 – Gaming Supply Licence (Intended for Skill Games, Fantasy sports Platform Providers)

Regulatory body

  • Under the Gaming Act published in April 2018, the Malta Gaming Authority (MGA) has increasingly broadened its oversight to manage innovation and its regulatory objectives. Recognizing how the gaming industry has evolved from traditional brick-and-mortar casinos to iGaming, the challenges brought forth also require greater regulation and management by the Authority.

The Benefits of Obtaining a Malta Gaming License

  • One of the most important components of Malta’s online gaming ecosystem is undoubtedly a skilled and qualified workforce in a variety of business fields. Over 10,000 online gaming employees work directly in online gaming companies in Malta, and this figure is increasing year after year. The quality and experience that skilled applicants potentially bring to a company are vital to its success.
  • Malta’s favorable tax policy is the foundation of the country’s robust economy. A reduced tax rate has allowed businesses to thrive by reinvesting revenues and establishing a future-proof company with solid economic underpinning.
  • A healthy economy is required for a strong business to thrive. Malta’s capacity to consistently seek development at various levels, boost GDP, reduced unemployment, and controlled inflation throughout the years are all signs of a country that has set its sights on a continuous, steady, and consistent economic path.
  • We live in a globally connected world and economy. Malta, the EU’s smallest member state, has made a reputation for itself in a variety of economic areas since its accession. From a booming online gaming country to a fintech hotspot and, more recently, a pioneer in E-Sports and peer-to-peer gaming business models, Malta has come a long way.
  • The Malta License has grown in popularity since Malta introduced sector-specific restrictions in online gaming in 2004. This progress has resulted from a coordinated and nationwide effort to be proactive in an industry that, when properly controlled, can build an eco-system that allows diverse local economic sectors to thrive.
  • Malta’s license is a symbol of player trust. The Malta Gaming Authority guarantees that all Malta operators are periodically scrutinized and inspected to verify that player safety procedures are in place, but more importantly, that they are monitored and applied. The Authority also guarantees that all online games licensed in Malta are authorized and tested by independent and licensed testing organizations to safeguard the integrity of the games.
  • The current FIAU implementation processes on particular sectors of the economy have undoubtedly validated the gaming industry’s resilience and excellent anti-money laundering requirements. Regular FIAU and MGA license inspections have allowed the authorities to collaborate with the sector to elevate the standard on AML.

Basic Requirements for a Malta Gambling License:

Here are the standard requirements that any applicant will have to meet. Each and every officer, authorized person, shareholder, director, beneficial owner, or ultimate beneficial owner must provide the following documents:

  • A police good conduct certificate dated no older than three months for each company owner and applicant
  • Passing a “Fit and Proper Test”
  • The ability to fill various key functional roles within the company. If you are unable to do so at the time of application, Fast Offshore can provide team members to carry out these duties
  • Original bank references of all owners/applicants dated no older than three months
  • Notarized copies of passports of all owners/applicants
  • A detailed business plan
  • A compliance and software audit
  • Details of all gaming software used and third-party agreements
  • All operations and gaming servers must be within Malta.

Furthermore, a licensee for Malta gaming license (for B2B class) is subject to minimum issued and paid-up share capital requirements:

  • Type 1 – Minimum €100,000
  • Type 2 – Minimum €100,000
  • Type 3 – Minimum €40,000
  • Type 4 – Minimum €40,000

Companies with multiple type approvals must meet the above share capital requirements cumulatively up to a minimum capping of €240,000.

Gaming operation review

  • The applicant is examined on the instruments required to conduct the business. This process includes examining incorporation documents, the operational policies and procedures, the games and the gaming and control systems, the technical setup, including system, network, and application architecture, the rules, terms, conditions, and procedures of the games, and other documents which might be required.
  • The above components constitute the desk-based audit of the application requirements. Inconsistent and low-quality applications will be dropped and the applicant will be subject to re-application.
  • Once all three areas are successfully completed the MGA will inform the applicant that the application was successful and will invite the applicant to implement it in a technical environment in preparation for going live. The applicant will be allowed 60 days to complete this operation after which the application will be considered suspended and subject to re-application. At any point within those 60 days, the applicant may trigger a request for an external System Review (performed by an independent 3rd party contracted by the MGA against a fixed market price). The System Review will audit the live environment against the proposed application.
  • At this stage, the MGA expects minimal deviation from the application. Significant changes to the gaming system will require the applicant to re-apply through a new application. On successful completion of the certification process, the Authority issues a five-year license.
  • The MGA mandates that after going live a Licensee shall undergo a number of compliance reviews of its operation, performed by independent 3rd parties contracted by the MGA against a fixed market price. The MGA will require such reviews to take place on the following schedule:
  • After the first year of operation after being licensed by the MGA.
  • Any other audit depends on the compliance plan set by the MGA.
  • Failure of a compliance review could lead to suspension or termination of a license.

Application procedure 

  • The application process has been harmonized into a singular stage. Applicants can submit all the required information in one go and the MGA commits itself to the analysis of all information through multiple internal process streams.
  • Step 1: Incorporation of a Maltese entity
  • Step 2: Opening of corporate bank account
  • Step 3: Drafting of license application and supporting documents (AML/CFT Policies, business plan, etc.)
  • Step 4: Submission of license application and review of the application by MGA
  • Step 5: Analysis of the business plan
  • Step 6: System and compliance review

Taxes

  • Any Malta-based company is subject to a 35% corporate tax rate. Malta operates a full imputation system which means that the effective rate of tax can be as low as 5%, depending on the situation.
  • The 35% tax rate is paid on all corporate revenue. After this, the dividends that are distributed to shareholders are entitled to a tax credit which is equal to the tax on the profits that the dividends are paid out of. The most common tax credit rate is 6/7ths which can make the amount paid, around 5%. At this rate, Malta is one of the jurisdictions with the lowest rate of corporate tax in the European Union.

Conclusion

  • Navigating the country of Malta’s complex business climate as a firm intending to provide a range of online gaming services and in need of a Malta gaming License might be a challenging process – a hassle to say the least. As such, Tetra Consultants hopes that this article has provided you with a much better understanding of the 7 things to know about Malta Gaming License in 2024 so that you can truly decide on whether you should do so yourself. 

So, what are you waiting for? Contact us to find out more about the steps to register company in Malta and obtain a Malta gaming license, and our dedicated and experienced team will respond within the next 24 hours.

Tetra Consultants

Tetra Consultants is the consulting firm that works as your advisor and trusted partner in your business expansion. We tell our clients what they need to know, instead of what they want to hear. Most importantly, we are known for being a one-stop solution for our valued clients. Contact us now at enquiry@tetraconsultants.com for a non-obligatory free consultation. Our team of experts will be in touch with you within the next 24 hours.

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