Malta is currently the only country in the European Union which regulates i-gaming. Over the last four years, it has gained a wealth of experience and has attained an unmatched track record as the best regulated i-gaming jurisdiction.

An Extraordinary Track Record

Malta issued tits first regulations for online gaming in 2000 to establish online betting. These regulations were revised in 2004 and the new Remote Gaming Regulations were published to include all forms of interactive gaming.

In the past four years, over 70 companies applied for a license. Today, a good number of the top fifty i-gaming operators are based in Malta and the industry is showing good signs of growth.

Most operators are attracted to Malta because of its competitive gaming tax, availability of services and most of all, its reputation of having a strongly regulated jurisdiction.

Obtaining a License

Remote gaming licenses are issued by the Lotteries and Gaming Authority, which is responsible for licensing and monitoring all gambling activities in Malta. A license is granted for a period of five years.

The procedure of obtaining a license is divided into three phases. The first step is to go through a fit and proper test for the business and all stakeholders with 5% or more interest.

One needs to present the following documentation to the Authority:

• A business plan
• An abridged 3-year financial forecast for the business plan
• Profiles of all directors and shareholders, with a copy of their passports
• A bank reference or a certificate of good standing. If one has a gaming license in another jurisdiction, then a copy must be provided
• A completed application form

On completion of the first phase without objections, the second step is to establish the gaming operation. This involves:

• Registering a company in Malta, with an International Trading Company status for foreign shareholders
• Obtain an agreement for hosting of servers and Internet bandwidth
• Provide the list of games to be offered with the rules and regulations
• Provide a detailed description of the system, architecture and application

A provisional license is given to the applicant on satisfactorily completion of the second phase. The applicant then has up to three months to set-up and start operating. At any time, the applicant can approach or provide the Authority with a certificate of compliance that has to be issued by an approved entity.

Timeframes

Normally the process of obtaining a license from the beginning to the end of the second phase is between five to eight weeks, depending on whether the information submitted to the Authority is sufficient of correct.

Costs

The application fee for obtaining a license is Lm1,000 (approximately Euros 2,300) and is not refundable. The registration fee for setting up a company in Malta is Lm120 (Euros 300) with minimum capital. A scaled tariff applies increase in share capital. There are no fees for setting up bank accounts, but a deposit is required. Together with its professional services partners, Bell Med can assist you through the whole process required in obtaining the license.

License Types

An applicant can apply for one or more types of licenses depending on the type of operation. Operations fall under four classes:

• Class 1 – Granted to operators who assume the risk on repetitively generated games, such as casinos, lotteries and bingos.
• Class 2 – Granted to operators who assume the risk on games which are carried out by means of bets on singular events. These include fixed odds betting and pool betting.
• Class 3 – Granted to operators who earn a commission from the sale of remote gaming services, such as poker rooms, portals, affiliates and P2P platforms.
• Class 4 – Granted to operators who earn a commission by operating i-gaming platforms (software vendors).

Gaming Tax

All classes pay an annual license fee of Lm3,000. The gaming tax depends on the type of class:

• Class 1 – Fixed rate at Lm3,000 per month
• Class 2 – 0.5% on stake
• Class 3 – Depends on the type of business, normally around 10% of the commission earned
• Class 4 – Fixed tax rate at Lm2,000 per month plus Lm500 for every hosted operator. In all classes, the annual gaming tax is capped at Lm200,000.

Incentives

If an applicant applies for more than one class, the processing fee remains Lm1,000. Class 4 operators start paying tax on the thirteenth month after being granted a license.

Regulations

i-gaming falls under the Remote Gaming Regulations, which was published as Legal Notice 176 of 2004. these regulations fall under the parent act of the Lotteries and Gaming Acts of 2001. Other acts and regulations which may have some relevance to i-gaming are:

• Companies Act
• Income Tax Act
• Personal Data Protection Act
• Prevention of Money Laundering Act
• EU Directives on E-money and E-commerce
• You can download a copy of these regulations from our website at http://www.bellmed.net/regualations

Certification

To be granted a license, the applicant must obtain a certificate of compliance for the operation.

This certification is based on the standard ISO/IEC17799:2000, Information technology – Code of Practice for Information Security Management. The applicant does not need to obtain the actual ISO certificate, but the auditor has to follow the methodology outlined in the ISO document.

The certification entity must obtain prior approval from the Lotteries and Gaming Authority to carry out the audit. A list of approved certification entities can be obtained from the Authority.

Other Requisites

The Remote Gaming Regulations stipulate that licenses are to have all their servers and equipment, which control the gaming operation, located in Malta.

Also, the operator must appoint a company director to the key official for the licensee. The key official must be resident in Malta and is to act as a liaison for the operator with the Authority.