Malta Gaming License

Tetra Consultants assists our international clients to secure Malta gaming license. Our service package includes company registration, corporate bank account opening, license application including advisory services, compliance review, and preparation of business plans and internal policies.

Company Registration

3 Weeks

Local Director?

No

Bank Account Opening

4 Weeks

Travel Required?

No

Excellent

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Malta gaming license

Tetra Consultants assists our international clients in securing the Malta Gaming License. Under the Gaming Act published in April 2018, the Malta Gaming Authority (MGA) has increasingly broaden its oversight to manage innovation and its regulatory objectives. Recognising how the gaming industry has evolved from traditional brick and mortar casinos to iGaming, the challenges brought forth also requires greater regulation and management by the Authority.

Introduction

Under the Gaming Authorisations Regulations, it is stated that “no persons shall provide or carry out a gaming service or provide a critical gaming supply from Malta or to any person in Malta, or through a Maltese legal entity, except when in possession of a valid license, or when such person is exempt from the requirement of a license under the Act or any other regulatory instrument”.

Types of Malta Gaming Licenses

Typically, license is expected of any persons looking to operate the following businesses:

Malta Gaming Service License

A business to consumer license to offer or operate a gaming service

Malta Critical Gaming Supply license

A business to business license to provide or carry out a critical gaming supply. Generally, the gaming types should be any one or more of the following:

Type 1

  • Games of chance played against the house. Generally, casino type games such as roulette, blackjack, baccarat and E-sports is classified under Type 1.

Type 2

  • Games of chance played against the house with outcome determined by an event or competition separate from a game of chance. Games such as fixed odds betting and pool betting are classified under Type 2.

Type 3

  • Games of chance not played against the house, with the operator being protected to gaming risk. Instead of profiting from the game, the operate generates revenue by taking a commission or charging based on the stakes of the price. Games such as poker, bingo are classified under Type 3.

Type 4

  • Controlled skill games such as fantasy sports are classified under Type 4.

Other considerations

  • If your business intends to run the above services, you will have to apply for a Malta Gaming License. The license will hold for ten-years and requires your reapplication thereafter. However, it is to note that the following games are exempted from the requirement. The list includes:
    • a game of skill which does not require a stake nor returns prizes;
    • a game of skill to enable participation and prize unless otherwise shown to be a controlled skill game;
    • a game of chance which does not require a stake to enable participation and does not envisage the possibility of a prize;
    • a de minimis game; and
    • a licensable game organized onboard any vessel flying or entitled to fly the flag of Malta or is registered in Malta.
  • If a particular game provided by your company falls within more than one of the four categories, the MGA will classify the game according to what it deems most reflective of the nature of the game.

Mandatory Requirements for Malta Gaming License

To be awarded a Malta Gaming License, you will have to possess the following qualities:

  • ready to conduct a gaming business;
  • correctly prepared from a business strategy perspective;
  • has the operational and statutory requirements to meet the obligations prescribed by law and policy; and
  • has correctly implemented and reviewed, in a virtual environment, before its official opening

When an applicant is examined, specifically incorporation documents, games, business processes, rules, terms, conditions, policies, procedures and technical documentation of the gaming system is evaluated. Licensees are also subjected to a minimum issued and paid-up share capital as per their license type.

Applicants looking to apply for a Type 1 or Type 2 license must have minimally €100,000. On the other hand, applicants looking to acquire a Type 3 or Type 4 license must possess minimally €40,000.

Timeline of Malta Gaming License Application

The process of applying for a Malta Gaming License can be split into 5 phases.

Malta Gaming License Timeline

Phase 1: Review of Applicant

  • Once an application has been submitted to the MGA, a fit and proper assessment will be conducted. The assessment includes a review of all information related to the applicant. Information regarding financing, managing and business viability will be taken into consideration when assessing the candidate’s suitability. For foreign businesses, MGA will further collaborate with other national and international regulatory bodies and law enforcement agencies to gauge the capability and legitimacy of the applicant.

Phase 2: Analysis of Business Plan

  • In the following step, the MGA will review and analyse the business plan prepared and submitted by the applicant. Typically, the outline of your plan should include an elaborate forecast of the operation. Accounts of marketing and distribution strategies should be attached to the business plan.

Phase 3: Review of Applicant’s Ability to Meet Operational and Statutory Requirements

  • At this stage, the Authority will review all supporting documents submitted by the applicant. This will include analyzing incorporation documents, games, business processes, rules, terms, conditions, policies, procedures as well as all other technical documentation related to the gaming and control system. It will also be reviewed as to whether the license is meeting the minimum issued and paid-up share capital requirements. The requirements are as follow:
Type of Gaming Service Issued and Paid-up Share Capital
Type 1 Minimum €100,000
Type 2 Minimum €100,000
Type 3 Minimum €40,000
Type 4 Minimum €40,000
  • In essence, this stage will be seemingly alike to a desk-based audit of the application requirements.

Phase 4: System Review

  • Following the above 3 phases, you should receive your application outcome. If successful, you will be invited to implement the operation into a technical environment. A 60 days deadline will be imposed where you may appoint a Service Provider approved by the MGA to carry out a system audit. After the deadline has crossed, the application will be considered as cancelled and you will have to reapply for the license.

Phase 5: Compliance Review

  • The licensee will have to undergo a series of compliance audits within 90 days from the notice issued by the MGA. Typically, the compliance audit would come after the first year of operation or is otherwise reliant on the compliance plan. Adhering to a compliance audit is important or you could face a suspension or termination of your license.

Fees

License holders are required to pay a fixed annual license fee and compliance contribution to the Authority. There are 2 types of licenses in Malta, the Gaming Service License/Business-to-Consumer (B2C) License, and the Gaming Supply License/Business-to-Business (B2B) License.

Gaming Service License/Business-to-Consumer (B2C) License

  • This is a license for an online gambling operator who wishes to provide online gambling services such as poker, roulettes, slots, and lotteries to consumers. The gambling platform provided must have a B2B license.

Fees for Gaming Service license (B2C License)

Non-refundable Fixed Annual License Fee
Type 1, Type 2, Type 3 Holders €25,000
Type 4 Holders €10,000
Type 1 Gaming Services
Compliance Contribution for the Financial Year Rate
For every euro of the first €3,000,000 1.25%
For every euro of the first €4,500,000 1.00%
For every euro of the first €5,000,000 0.85%
For every euro of the first €7,500,000 0.70%
For every euro of the first €10,000,000 0.55%
For every euro of the remainder 0.40%
Type 2 Gaming Services Rate
Compliance Contribution for the Financial Year 4.00%
For every euro of the first €3,000,000 3.00%
For every euro of the first €4,500,000 2.00%
For every euro of the first €5,000,000 1.00%
For every euro of the first €7,500,000 0.80%
For every euro of the first €10,000,000 0.60%
For every euro of the remainder 0.40%
Type 3 Gaming Services
Compliance Contribution for the Financial Year Rate
For every euro of the first €2,000,000 4.00%
For every euro of the first €3,000,000 3.00%
For every euro of the first €5,000,000 2.00%
For every euro of the first €5,000,000 1.00%
For every euro of the first €5,000,000 0.80%
For every euro of the first €10,000,000 0.60%
For every euro of the remainder 0.40%
Type 4 Gaming Services
Compliance Contribution for the Financial Year Rate
For every euro of the first €2,000,000 0.50%
For every euro of the first €3,000,000 0.75%
For every euro of the first €5,000,000 1.00%
For every euro of the first €5,000,000 1.25%
For every euro of the first €5,000,000 1.50%
For every euro of the first €10,000,000 1.75%
For every euro of the remainder 2.00%

Companies that register in Malta can apply for a Malta Gaming License. The Malta Gaming License cost is generally determined based on the type of license and type of gaming service your company provides.

If you are applying for a B2C License, you will have to choose at least one out of the four types of gaming service your company is providing. If you are applying for a B2B License, there will only be an additional license fee incurred for providers that supply Type 4 gaming supplies.

Gaming Supply License/Business-to-Business (B2B) License

  • This is a license for a game developer or software provider for online gambling. They supply the gaming platform that is to be used by the operator to provide the gambling service to consumers.

Fees for Critical Gaming Supply License (B2B License)

Non-refundable Fixed Annual License Fee
Type 4 Holders €10,000
Supply and Manage Material Elements of the Game
License Fees on Annual Revenue Fee
Where annual revenue does not exceed €5,000,000 €25,000
Where annual revenue exceeds €5,000,000 but does not exceed €10,000,000 €30,000
Where annual revenue exceeds €10,000,000 €35,000
Supply and Management of Software
License Fees on Annual Revenue Fee
Annual revenue does not exceed €1,000,000 €3,000
Annual revenue in excess of €1,000,000 €5,000

Additionally, for low-risk games, you can expect to make payment for a one-time non-refundable fee of €25. Generally, this would apply to non-profit, commercial communication and limited commercial communication games. A universal 5% gaming tax is also imposed on Gaming Revenue generated from local-based players. To determine if you are charged a 5% tax, the player’s permanent address will be reviewed. It is also important to note that for start-ups who qualify under the Directive on Start-Up Undertakings will be exempted from paying compliance contribution for a period of 12 months.

How to apply for Malta gaming license?

  • Prior to commencing the engagement, our consultants will seek to understand your gaming business before advising you on the relevant license and compliance obligations to keep your business running.
  • Upon registering the company, we will proceed to open a corporate bank account with either a reputable local bank or an international bank. The bank account will primarily be utilized to deposit the minimum pay up capital required. You can expect your corporate bank account to be ready in 4 weeks.
  • Concurrently, our dedicated team of consultants will assist you in preparing the necessary documents for submission to the MGA. Typically, these documents will include your Certificate of Incorporation, identity documents, bank references and more.
  • A detailed business plan with details of the games, rules, terms, conditions as well as software systems is required to be submitted to the MGA. As such, Tetra Consultants will draft a copy for your perusal to ensure that you meet the necessary requirements and gain approval for your application.
  • To meet your compliance requirements, you will require to undergo a series of audits imposed as a requirement by the MGA. Prior to the audit, our team of Chartered Accountants will also assist in reviewing your business operations to ensure the successful process. Following, a Service Provider approved by the MGA has to be appointed to assist in conducting the audits. Our team of consultants will also assist in the appointment.
  • As you will require to conduct a test-run, our team will advise and review your business operations to ensure that you meet all compliance requirements during the test-run.

Financial and Operational Activity

Once your license has been approved, you will be granted a ten-year license. If you wish to make any changes to the details and rules of the game that has not already been stated in the original license application, you will have to seek approval from the Malta Gaming Authority.

In addition, you will face a compliance audit after the first year of operation. Tetra Consultants will continue to remind you about your compliance obligations and assist you in meeting these requirements. Key reports that you will need to submit include:

Yearly Audited Accounts

  • Your company will be required to submit a set of financial statements that is prepared and audited according to the International Financial Reporting Standards (IFRS). The financial report must include a Directors’ Report and the report should be submitted within 180 days after company’s financial year has ended.

Half-Yearly Reports

  • Management Accounts
    • Management accounts that include records spanning the first 6 months of a company’s financial year are to be submitted before the end of the 8th month of the company’s financial year. The deadline for submission is 7 September.
  • Industry Performance Return (IPR/Return)
    • The Industry Performance Return composes of bi-annual information on all licenses and provides important data on the difference aspects of the operation of each company. There is a fixed form for the Return that can be downloaded and completed from the MGA official website. The Return is to be submitted through the Licensee Relationship Management System (LRMS) portal every 6 months and the deadline for submission is 28 February.

Monthly Reports

  • Gaming Tax report
  • Player Funds report
  • Other reports may also be requested by the MGA.

Tax Considerations

  • There is more to love about Malta. With extensive taxation benefits, Malta is viewed as an ideal jurisdiction among many foreign investors looking to expand their gaming business. Besides exemption benefits from the Value-Added Tax Act, gaming businesses set up in Malta can also leverage on over 70 double taxation treaties. For highly qualified persons, you can expect to be taxed a flat rate of only 15% on your personal income. Should your Maltese company also hold minimally 10% of equity, capital gains and dividend income received from subsidiaries of your company will also be exempted from any tax payments.
  • Typically, for tax purposes, all gaming services are mandated to pay a tax rate of 5%. This is imposed on their Gross Gaming Revenue generated. This applies to Malta-based players as per referenced from his permanent address. In sum, gaming taxes are largely capped at a maximum of € 466,000, per annum.

Other Benefits of Malta Gaming License

High Credibility

  • Malta is the first country in the European Union (EU) that started regulating online gambling. Established in 2001, the Malta Gaming Authority ensures that all licensed companies which provide gambling services are transparent in the reporting of their source of revenue and expenditure. The MGA works together with the Maltese government to ensure that the interests of both players and business owners are protected through a safe gambling environment. By implementing regular checks on businesses and having strict licensing requirements, the MGA ensures that no illegal activities are taking place. The MGA also regularly suspends licenses of companies that do not adhere to their compliance obligations and works closely with other international authorities to crack down on any possible money laundering, corruption, and other illegal activities.
  • As such, the Malta Gaming License tend to be known as the preferred global online gaming license because of the Malta Gaming Authority’s reputation and history in ensuring strict compliance with regulations. Online gambling companies that hold a Malta Gaming License are usually regarded to be more credible because the license acts as a testimony that the operator is transparent, fair, and honest.

Fair Game

  • All companies with Malta Gaming Authority licenses have to undergo regular checks to ensure that the gaming mechanism implemented by the company is fair and honest and cannot be tampered or influenced by the operator. Online games are tested and approved by independent licensed testing companies that are not affiliated with the operator, to ensure that the software implemented does not have pre-determined results. The MGA also assists in the enforcement of the transfer of prized money to the players.
  • Due to the strict regulations and monitoring of gaming mechanisms and activities by the MGA, the Malta Gaming License is regarded by players to be a trusted license. Online games that hold a Malta Gaming License are generally regarded to be safe and fair to play. The high level of player trust associated with this license has attracted many online gambling companies to apply for this license.

Qualified Labour Force

  • The digital gaming industry, also known as the iGaming industry, is a significant part of the Malta’s economy and contributes to approximately 10% of Malta’s GDP. As such, the local workforce is highly trained and equipped with the skillsets needed in a digital gaming company. This includes IT, programming, data analytics, marketing, and advertising skills. Most people in Malta are also multilingual and can speak both English and another European language.

Stable Economy

  • Classified as an advanced economy by the International Monetary Fund (IMF), Malta is a high-income country that is driven by its technology, financial, manufacturing, tourism, and service sectors. As a member of the European Union (EU), Malta officially adopted the euro as its currency in 2008. The country’s large banking sector, strong-performing service sector and its EU membership have contributed to the country’s stable and consistent economic growth. The unemployment rates in Malta have been decreasing over the years and remain at a relatively low level of 3.3% in 2020.

EU Member

  • The EU law provides member countries with the autonomy to organize their gambling services, as long as they adhere to the Treaty on the Functioning of the European Union (TFEU). Since Malta is the first EU member country to provide a remote gaming license, the checks and regulations introduced by the Malta Gaming Authority are often used to set the standard for licensors in other jurisdictions.
  • As a member of the EU, the Malta Gaming Authority also complies to the legislation the EU has on gaming. Thus, this acts as a reassurance that operators are managing its operation in accordance with the EU legislation.

Strict Regulation against Money Laundering

  • The MGA conducts regular inspections on companies that own a Malta Gaming License and are not hesitant to suspend licenses of companies that show non-compliance to any rules and standards set by the MGA. Established in 2002, the Financial Intelligence Analysis Unit (FIAU) aids the MGA in ensuring that companies which provide online gambling services are not involved in money laundering activities.
  • Due to the effective monitoring and regulation of online businesses, Malta has not been listed in any international blacklist of countries involved in money laundering activities. Malta also adheres strictly to the EU legal framework on anti-money laundering and is an active participant of initiatives launched by the Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL) and the Financial Action Task Force on money laundering (FATF).

Greater Access to Markets

  • A Malta Gaming License can be used in any country that has not banned online gambling However, they cannot be used in jurisdictions that have been blacklisted by the FATF, or jurisdictions that require a local license. As a Malta Gaming License is recognised internationally, there are no barriers to entry in setting up remote gaming in markets that do not prohibit online gambling. Moreover, since Malta is a member of the EU, a Malta Gaming License will not be restricted in the EU as long as the MGA shows compliance to EU law. Hence, a license obtained from the MGA gives your company access to both international markets and the large EU markets.

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FAQ

The above guide provides almost all the information you need to know before applying for a Malta Gaming License. Yet, there may still be some lingering questions you have in your mind. So, in this segment – we will answer all the other frequently asked questions to provide you with a comprehensive understanding.

What type of games would require a license to operate?

  • The games that require a license to operate are games of chance, peer-to-peer games, and controlled skill games.
  • A game of chance is a game in which the outcome is determined by a random number generator or an event, while a peer-to-peer game is a game which allow the transfer of data and gaming functions between two or more players. Controlled skill games are games based on skills such as fantasy sports. The MGA will determine whether a game is a skill game or otherwise, based on a fixed set of criteria.

How to apply for a license?

  • Applicants can apply for a license by completing the application form and submitting all the relevant documents through the MGA portal. Documents required include the applicant’s personal information, a business plan consisting of the company’s financial statements, a Human Resource (HR) plan, marketing and distribution strategies and growth targets.
  • During the application process, the applicant will also need to choose the type of gaming license. If the company is a game developer, the applicant will opt for a Gaming Supply (B2B) License. Otherwise, if the company is a game operator, the applicant will opt for a Gaming Service (B2C) License. If the company opts for a B2C license, it will also need to choose the type of gaming service it is providing.
  • There are 4 types of gaming services. Class 1 gaming license in Malta involves game of chance where the outcome is determined by a random number generator;  Class 2 gaming license in Malta involves game of chance where the outcome is determined by the result of an event; Class 3 gaming license in Malta involves games of chance where the operator generates revenue through a commission fee rather than the outcome; Class 4 gaming license in Malta involves a controlled skill game.

Do I require a separate license for each type of game produced?

  • No, you do not need to obtain a separate license for each type of game. When you apply for a license, you are required to clearly state the category that each game belongs to in your application process. If you have already obtained a license from the MGA and wish to offer an additional or different type of game, you will have to apply through the MGA portal for a separate approval.

What special privileges are granted to Start-ups?

  • Under the Business Start Scheme, start-ups can obtain a grant of up to €10,000 to facilitate their early development stage. For start-ups that are able to present a feasible business plan, they will be able to receive a further grant of up to €20,000 per quarter. The maximum grant a start-up can receive is €200,000 and the grant incentive is only available from 1st January 2021 to 31st December 2023.

What are the standards require to be qualified as a Start-up?

  • To qualify as a start-up, the company must be a recognised business entity, that is not controlled by business owners who already have existing businesses or interests in other undertakings in the same or related sector that exceed 25%. Business owners are also not allowed to have previously owned a business in the same or related sector that has closed down within 12 months of its establishment.
  • A start-up also cannot be older than 48 months from its date of incorporation. Only start-ups that engage in eligible activities such as manufacturing, pharmaceutical, software development and other innovative activities will be eligible for the grants provided by the Business Start Scheme 2021. Companies that engage in real estate activities or gambling services are also not eligible for the Business Start Scheme 2021.

What are the limits imposed on advertising for my Malta gaming business?

  • The Malta Gaming Authority imposes strict limitations on advertising in accordance with the Gaming Commercial Communications Regulations. Businesses are not allowed to promote and advertise their games in public spaces, with the exception of authorised gaming premises and certain tourist locations. When advertising online, companies are expected to advertise their game in a fair and responsible manner without misleading underage individuals. For example, they are not allowed to promote their game as a means of earning a quick buck, downplay the risk associated with their games or target underaged individuals as potential clients.
  • Companies that operate a gaming business are also not allowed to sponsor activities where the audience is made up of mainly underaged individuals. Any sponsorship undertaken by a Malta gaming business will only be identified by the company’s name and logo.
  • The MGA will take strong action against companies that are perceived to have advertised or promoted their gaming business in an irresponsible and misleading manner.

What should be advertised?

  • Responsible gaming messages and the game services provided can be advertised, as long as the game is not portrayed to be socially attractive or reliant on skills. All advertisements should clearly state the name of the gaming company and mention the fact that the company holds a valid gaming license issued by the MGA or a recognised licensing authority.
  • To check whether a Malta gambling company has a license issued by the MGA, you can conduct a gaming license search via the MGA Licensee Register.

Can you gamble with a gaming license?

  • No, a gaming license only allows operators to buy the required software from leading software providers and open an online casino to provide gambling services to customers. The license does not allow an individual to gamble. If the jurisdiction you live in prohibits online gambling, you will not be able to engage in online gambling even if you own a gaming license to act as an operator.

Is gambling taxed in Malta?

  • Yes, players who live in Malta or engage in gambling activities in Malta will pay a gaming tax of 5% on the revenue generated from gambling. All gambling activities in Malta must be authorised by the MGA or other recognised licensing authority.

Is online gambling illegal in Malta?

  • No, it is not illegal to engage in online gambling in Malta, as long as you are above the age of 18.

Is the UK covered by a Malta gaming license?

  • Yes, a company that holds a Malta Gaming License can operate and advertise in the UK. Under the UK Gambling Act 2005, operators from jurisdictions that are part of the European Economic Area (EEA) such as Malta are allowed to advertise their gambling services in the UK. The list of companies that are allowed to operate in the UK are listed in the UK gambling commission register.

What are the standards that a Malta Gaming licensee must adhere to?

  • A holder of the Malta Gaming License must be a legal person established in the EU or the EEA. The licensee must prepare financial statements in accordance with the International Financial Reporting Standards (IFRS) and submit the audited financial report to the MGA on an annual basis. They are also required to submit bi-annual and monthly reports as requested by the MGA.
  • In addition, a Gaming Service (B2C) Licensee is required to appoint an Anti-Money Laundering Officer and a Data Protection Officer who cannot be the same person and must be approved by the MGA through the attainment of a Key Function License. Although online gaming operators can have their gaming equipment, servers and facilities located outside of Malta, their database that contains key information about players and their transactions must be located within Malta.

What are enforcement measures taken by the Malta Gaming Authority?

  • In the case of non-compliance, the Malta Gaming Authority can suspend a company’s license until the licensee commits to undertake appropriate action to rectify the mistake. The license can be cancelled by the Authority if they deemed that the licensee’s action cannot be remedied.
  • In the case that the licensee engages in criminal activity, the MGA can choose to engage the relevant authorities to prosecute the licensee.  If a licensee commits any of the criminal offences listed in the Gaming Act, they will be required to pay a fine that is between €10,000 or/and €500,000, face imprisonment for up to five years. Alternatively, the MGA can reach a Settlement Agreement with the licensee that will pardon the licensee’s criminal liability. This will involve a fine of up to €500,000 for each act of non-compliance or a sum of €5,000 for each day of non-compliance.

What countries are covered by the Malta Gaming License?

  • Countries listed under the Malta Gaming License include any country that has not banned online gambling or require a local license. Operators that hold a Malta Gaming License are also not allowed to operate in jurisdictions that have been blacklisted by the Financial Action Task Force on money laundering (FATF).






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