The iGaming industry in Malta is thriving in the 21st century. Fundamentally, the innovative and robust gaming framework that began in 2004 has made Malta the hub of the iGaming sector. The Malta Gaming Authority (MGA) has since been considered a flagship authority within the gaming industry.
Started in 2004, The Remote Gaming Regulations placed Malta as the first member state of the European Union to regulate remote gaming. Notably, the Remote Gaming Regulations are now replaced by the updated and relevant Gaming Act, which came into force in August of 2018.
Considering its rapid expansion, the iGaming industry in Malta has experienced significant growth over the years and is poised for even greater momentum in the future. With new opportunities continuously emerging, there has never been a better time for iGaming companies to capitalize on the numerous advantages Malta offers.
In this article, we introduce the iGaming industry in Malta, with an overview of it's the benefits and business probabilities.
What is iGaming?
iGaming or online gaming involves wagering money (in certain forms) on the outcome of an event or a game, whether generated randomly or not, using the internet. iGaming activities may include:
- Games such as Poker or Bingo
- Online casinos, including slots
- Lotteries
- Fixed-odds betting, including sports events
- Fantasy sports
A substantial portion of the online gaming market is made up of casino games and sports betting. Hence, companies looking to operate an online gaming company in or from Malta must possess a valid license issued by the Malta Gaming Authority. The license should either be a gaming service license applicable to B2C operators or a critical gaming supply license appropriate for B2B operators.
What is a Remote Gaming Licence?
The Maltese Gaming License allows companies to provide gaming services in or from within Malta. Activities and services of these companies include games such as slots or casinos, fixed odds betting, including horse racing or sports pools, and peer-to-peer games, such as poker or bingo or controlled skill games.
Primarily, any gaming company targeting Maltese players with gaming services in or from Malta needs to apply for a gaming license with the MGA. The permit covers the types of games offered and the services provided. This covers B2B and B2C services.
Types of Remote Gaming Licenses
The Malta Gaming Authority grants four types of licenses:
Class 1
Granted to online casinos focusing on repetitive games or games based on a chance.
Class 2
Issued to gambling businesses accepting online bets on certain events.
Class 3
Aimed at poker rooms, bingo games, betting pools and betting exchanges.
Class 4
Designed for gambling software providers as well as online games and hosting.
The Cost of Procuring a Gaming License in Malta
Gaming License Fees applicable to licensees in Malta are comparatively less expensive than in other gaming jurisdictions. All the B2C Gaming Services licensees are subject to an annual fixed license fee of €25,000. The only exceptions are the suppliers of Type 4 games, who are instead subject to a yearly fixed license fee of €10,000.
On the other hand, the license fee for B2B Critical Gaming Supply licensees shall vary between €25,000 to €35,000, depending on their annual revenue. Moreover, a reduced License Fee of €10,000 shall apply if the licensee provides critical supplies solely to Type 4 game providers. Lower annual License Fees apply to B2B licensees providing Critical Gaming Supplies consisting only of back-office related services, such as provision and maintenance of software.
Depending on the revenue generated, the Gaming License Fees Regulations impose a Compliance Contribution solely on B2C gaming service providers in terms of a sliding scale.
|
B2C License Type |
Minimum Compliance Contribution |
Maximum Compliance Contribution |
|
Type 1 Gaming Services |
€15,000 |
€375,000 |
|
Type 2 Gaming Services |
€25,000 |
€600,000 |
|
Type 3 Gaming Services |
€25,000 |
€500,000 |
|
Type 4 Gaming Services |
€5,000 |
€500,000 |
It is important to note that B2C gaming services providers who qualify and are duly approved by the MGA as a startup are entitled to a one-year exemption on Compliance Contributions. B2B Critical Gaming Supply licensees are not subject to Compliance Contributions.
Gaming Tax Rates in Malta
With the sole aim to grow and secure the online gambling companies in Malta since 2004, authorities have committed themselves to produce new laws and opportunities to grow businesses efficiently with security.
Gaming companies are subject to corporate tax, either companies incorporated in Malta or companies deriving or raising income in Malta. Certain gaming companies are also subject to further gaming tax obligations.
Following the relevant applicable remote gaming activities by the Malta Gaming Authority, Remote Gaming businesses are subject to the following two types of taxes:
Corporate Tax
35% corporate tax rate shall apply to the profits generated by remote gaming operators. Companies will be able to benefit from specific tax incentives, subject to applicable conditions.
Gaming Tax
A 5% gaming tax shall apply to the gaming revenue generated by remote gaming operators from Malta-based players.
In conclusion, a number of events are organised for the iGaming industry in Malta each year, such as the quintessential iGaming destination SiGMA. Whether you are a startup or a big international company, you will find yourself at one of such iGaming events.
