Malta’s gaming industry has undergone numerous changes since the enactment of the Malta Gaming Act in 2018. While previously there were separate licenses for online and offline gaming activities, now a firm can conduct both the activities via the same license.
The 2018 Gaming Act has streamlined licensing requirements and segregated services efficiently, ensuring flexibility in gaming operations. On top of that, a Malta gaming license allows you to conduct business activities in other European countries too.
Are you looking to obtain a Malta igaming license? The article guides you through the types, benefits, key requirements, and the process of obtaining the same.
What is a Malta Gaming License and Which Laws Govern It?
Also known as a Malta gambling license, this license is a legal permit that allows firms to operate a gaming business. It includes both online and offline gaming activities. Like the Nevis gaming license, a Malta Gaming license also has two categories: B2B and B2C.
However, unlike Nevis, any firm wishing to obtain a gaming license in Malta must register itself in the European Economic Area (EEA). The primary Act governing the license is the Malta Gaming Act, 2018 (Chapter 583). Chapter 583 is the umbrella Act establishing the Malta Gaming Authority (MGA), which oversees the gaming industry. Moreover, it has 12 subsidiary legislations (S.L.) that govern numerous elements, such as licenses and gaming categories, premises, compliance, the gaming fund, the gaming foundation, and so on.
What are the Types of Malta Gaming Licenses?
After the enactment of the Gaming Act (2018), there are only two types of Malta igaming licenses. Section 583.5 of the Act covers the categories of gambling licenses in Malta. They are as follows:
- Gaming Service License (B2C License): It is a business-to-consumer (B2C) license that enables firms to carry out gaming services. The license holders serve the end consumers and must enter a binding contract with them.
- Critical Gaming Supply License (B2B License): It is a business-to-business (B2B) license that allows a firm to provide critical gaming supplies, such as software, core logic, and so on. The B2B license holders are not responsible for managing the end consumer’s funds.
What Constitutes Gaming Services and Critical Gaming Supply?
The first schedule of S.L. 583.5 of the Act provides details on activities covered under gaming services and critical gaming supplies. Applying for a license requires you to choose from the following:
| | Gaming Services (B2C) | Critical Gaming Supply (B2B) |
Types | Type 1:
Games of Chance (Against the House/Machine): Outcome is determined by an RNG.
Examples: Slots, Roulette, Blackjack, Baccarat, Lotteries | Type 1:
Supply and management of material elements, such as core logic Examples: Algorithm, Random Number Generator (RNG) |
Type 2:
Games of Chance (Against the House/Events)
The outcome is determined by an event separate from the game. The operator manages the risk in this type of service.
Example: Sports betting | Type 2:
Supply and management of player records. Example: Player Account Management (PAM) |
Type 3:
Games of Chance (Peer-to-Peer (P2P) /(Not Against House)
The operator takes a commission and has no gaming risk.
Example: Poker (P2P), Bingo | Type 3: Supply and management of the control system Example: Hosting server where the gaming software resides |
Type 4:
Controlled skill games in which skills predominate over chance.
Example: Fantasy Sports | |
What are the Benefits of a Malta Gaming License?
Malta is a top-notch gaming jurisdiction and offers numerous benefits. The following are the key advantages of obtaining a Malta gaming license.
Strong Reputation
The gaming license is one of the most authoritative gaming licenses across the globe. It is synonymous with trust and quality, and can operate throughout Europe without obstacles.
Reduced Tax Burden
Malta has a full imputation tax system, under which a non-resident shareholder can claim a 6/7 refund on the tax paid. This reduces the overall corporate tax rate to 5 percent.
No Multiple License Hassle
There is no separate license for online and offline gaming activities. A firm can provide both types of services via a single B2C license. However, it may require different certifications and authorizations to operate offline, such as a premises approval certificate.
Access to the Multiple Markets
With a Malta online gaming license, a firm can easily operate in countries that do not have local gaming licenses. However, a firm must meet local requirements in case a country has active gaming laws.
Long Term Planning
A Malta gaming license is issued for 10 years. This enables firms to plan for long-term, scaled-up business.
Corporate Group License
This is a major addition under the new 2018 Act and is governed by the S.L. 583.5. As per the latest framework, a corporate group is a parent company that exercises 90% or more control over its subsidiaries.
In such a case, subsidiaries do not require separate licenses. They can provide different gaming services under a single license held by the corporate group. Additionally, a corporate group also does not need a B2B license if it is only providing the technical services to its subsidiaries.
What are the Requirements for Obtaining a Malta Gaming License?
The key requirements that must be fulfilled to obtain this license include the following:
Must be an EEA Company
As per the Gaming Act, 2018, any firm willing to obtain the Malta gaming license must be registered in the EEA. Moreover, firms already in possession of a gaming license from other EEA-member countries, such as Spain or Italy, only need to apply for a Recognition Notice. There is no need to undergo the entire licensing process.
Physical Presence
Having a local presence is mandatory for obtaining the license successfully. A firm needs to maintain a local office and staff to meet the economic substance requirements.
Capital Requirements
The capital requirements vary by the license, the game, and the service type. As per the Malta Capital Requirements Policy, the minimum capital can vary between € 40,000 and € 100,000. Moreover, it is mandatory for firms providing both online and offline services to maintain a combined capital of € 240,000.
Fit and Proper Test
Under the MGA's fit and proper guidelines, a fit and proper test is essential to obtain a Malta gaming license. It includes thorough background checks and verification of criminal involvement, civil lawsuits, honesty, financial standing, and competence.
Assign Officers for Key Functions
The fourth schedule of the S.L. 583.5 of the Act makes it mandatory to comply with the key functions, including responsibility for gaming operations, marketing, finance, player support, internal audit, anti-money laundering, risk management, and prevention of fraud.
What are the Documents Required for Obtaining a Malta Gaming License?
A firm must provide the following documents when applying for a gambling license in Malta:
What are the Steps of Applying for a Gambling License in Malta?
The steps can vary depending on the type of activities that a firm provides. For offline activities, a firm may need to take additional steps related to premises verification.
Here are the general steps that any firm must follow to obtain a Malta gaming license:
Step 1: Get in Touch with a Consultant
Appointing a consultant makes it easier to navigate the rules and regulations of the Malta gaming industry. A consultant will guide you through the appropriate license type and applicable services. Moreover, they will ensure you meet all the post-application review requirements.
Step 2: Incorporate a Malta Company
Only an EEA-registered company can apply for a Malta gaming license. Thus, to obtain this license, you must register a Malta limited liability company. It can either be a subsidiary of a holding company or a standalone company. During this step, you must obtain a no-objection certificate from the MGA for the proposed premises of an offline gaming location (if required).
Step 3: Meet the Share Capital Requirements
MGA has strict capital requirements for firms entering the gaming industry. Firms that want to obtain a B2B Malta gaming license must maintain a minimum share capital of €40,000, whereas B2C license holders for type 1 and type 2 games must have a minimum share capital of €100,000. Similarly, any firm obtaining a Type 3 and Type 4 Malta gambling license must have a minimum share capital of €40,000. As mentioned above, firms that offer both online and offline games must have at least €240,000 in share capital.
Step 4: Submit the Application Form and Documents
Once you are done with company formation in Malta and have funded the capital, the consultant will help you submit the form on the Licensee Relationship Management System (LRMS) portal. Along with the form, submit the above-mentioned documents, floor plans, and business permits issued by the country’s Planning Authority (PA).
Step 5: Undergo Review
MGA typically requires firms to undergo three types of reviews: key personnel background checks, funding reviews, and technical infrastructure reviews.
Under the first review check, the background of the ultimate beneficial owner and other key personnel is verified. Similarly, under funding review, the authority authenticates the source of funds and the financial stability of the UBO. The technical infrastructure review is an external audit of the technological framework and the security measures in place to protect clients' data.
Step 6: Get the Approval
Once you have passed all the reviews, the authority will grant you the Malta gambling license to operate in the industry. In the case of a physical premise, the MGA will also grant a Controlled Gaming Premises Certificate of Approval.
Note: MGA also offers additional permits, including a Cruise Casino permit, a non-profit permit (charity events), and a tournament permit, which can be obtained on an ad hoc basis.
How Can Business Setup Worldwide (BSW) Help?
Obtaining the Malta online gaming license can be your passport to accessing a rapidly growing virtual gaming industry. Additionally, it also gives you access to the offline gaming market. The license is comprehensive and covers a wide range of services.
Given that navigating the entire process can be challenging for someone new to the segment, we at BSW can be your guiding light. We help you choose the right gaming service, prepare the documents, meet the review requirements, and more. Contact us to learn more.
