In mid-2003 the Malta Lotteries & Gaming Authority announced that a new licensing regime for online gaming was in the pipe-line and that it was very likely that these new regulations would be issued by the end of February 2004.
These new Remote Gaming Regulations were effectively published and entered into force in April 2004. Through these regulations other gaming activities, besides betting, were introduced. these ranged from online casinos, casino-style games, betting exchanges and lotteries. These new regulations have ensured that not only those who are highly interested in the commercial and tax advantages offered by Malta, are satisfied, but even those who are concerned that there could be a proliferation of under-regulated Maltese licensed sites.
A system of checks and balances was effectively created: an advantageous and competitive regime on one hand and regulation and seriousness on the other.
Through this system, the Maltese government ensured that the regulations would offer protection to the players, whilst at the same time, excessive bureaucracy and red-tape are avoided, hence enhancing Malta’s reputation as a reputable financial services jurisdiction.
Highlights of the Legislation
Raison d’tre behind the Regulations
The proper operation on interactive games
The protection of players
The prevention of money laundering
Exigencies of public interest
Mechanics
The appointment by the Licensee of one key official to personally supervise the operations
Appointed key individual person must be a director of the company and is to report to the Authority
The Online Gaming System to be tested by an approved laboratory at least within six months prior to the application
Player Protection (to come into force within 1 year from the date of these regulations
Granting of License – valid for 5 years on a non-refundable basis
Player Protection
Players funds to be kept separate from Licensees own funds
Licensee shall instruct and authorize the credit financial institution by which a players account is held to disclose any information as may be requested by the Authority
Funds in the players account, including funds in transit or in the process of being cleared through the banking system must be at all times at least equal to the aggregate of the amount standing to the credit of players account held by the licensee
Four classes of licenses
Class 1 Online Gaming License;
Class 2 Online betting office license or an online betting exchange office license;
Class 3 License to promote and abet gaming from Malta (includes betting exchanges & poker operations)
Class 4 License to host and manage online gaming operators, excluding the licensee himself.
Taxation on all Three Classes
Online Gaming License – a sum of Euro4,700/month in the first six months after the issue of the license & Euro7,000 per month for the entire duration of the of the license period.
Online gaming operated by a Class 4 Remote Gaming licensee, licensee who operates the hosting platform shall not pay any tax for the first six months after the issue of the license, then he pays Euro2,350 per month for the subsequent six months and subsequently Euro4,700 per month for the entire duration of the license.
Licensees operating from the hosting platform – a sum of Euro1,200/month.
Online Betting Operations – a sum equivalent to 0.5% on gross amounts of bets.
Online Betting Exchanges – a sum equivalent to 0.5% on the sum of all net winnings calculated per player
Pool betting a sum equivalent to half of one per centum (0.5%) on the aggregate of stakes paid.
Provided that in all cases the total maximum of tax payable per annum by one licensee in respect of any one license shall not exceed Euro465,000.
The Malta Remote Gaming Regulations 2004 have undergone a major revamp.
The proposed new regulations were publicly presented by the Lotteries and Gaming Authority (LGA) in mid-October 2005. The LGA commissioned the Malta Remote Gaming Council (MRGC) to lead the consultation process and the Legal & Regulatory Workgroup of the MRGC has actively worked on suggestions for presentation to the LGA. These were presented to the LGA in November 2005 and are now awaiting final approval.
