27.10.2020

Are you interested in incorporating an iGaming company in Malta and don’t know where to start? Or perhaps you are still not sure whether you should select Malta as a jurisdiction to apply for an iGaming and betting license in? If you are interested in this sector and would like to have a better insight on how Malta operates, read here.

Thanks to Iosif Galea, a Gambling Consultant with years of experience in Malta’s online gaming industry, we can answer all your questions in this Question and Answer article. Fairwinds Management Limited works closely with Iosif Galea, and together we can provide clients with a holistic service. This article also tackles Brexit’s impact on Europe’s gambling industry.

  1. As a gambling consultant, which services do you offer to local and foreign clients?

As a gambling consultant, I provide strategic advice, business planning and regulatory advice. Being a consultant who have worked at the Malta Gaming Authority (MGA) as a compliance officer for seven years, I have hands on experience of the Malta regulatory regime and deep knowledge of regulation in the other EU jurisdictions such as UK, Italy, Romania and Sweden. I provide advice on licensing, compliance and the continuous monitoring of compliance and regulatory affairs. Furthermore, I offer my advice on regulatory risk assessment prior to choosing a jurisdiction to regulate the gambling operation.

Malta is an EU country since 2004 and offers a very strong regulatory environment. The main advantages of setting up shop in Malta are the lowest taxation rates in the EU and a very attractive fiscal regime. In comparison with other jurisdictions, gaming operators have and continue to choose Malta because there are clear and rapid licensing procedures with an effective and highly reputable regulator, the Malta Gaming Authority. Another main advantage is that Malta has become a regional ICT hub, thus one can find many IT and Financial services institutions connected within the gaming industry in the same ecosystem.

2. Malta is an iGaming hub. What are the advantages of this jurisdictions when compared to others?

The remote gaming regime applied by the MGA is both technology and game-neutral, therefore encompassing any type of gaming offered by means of distance communication (including, but not limited to, internet, digital TV, mobile phone technology and telephony). Any game offered by means of distance communication, which can be securely managed and is compliant with the Regulations, will be reviewed and considered for licensing by the MGA. Malta boasts of a rigorous vetting and compliance system, therefore the gambling operator must be prepared with all the corporate, financial and technical documentation prior to applying for a Malta Gaming License. Every applicant must be prepared with documentation relevant to the corporate structure and the shareholders, business plans and the technical documentation relevant to the gaming system and the infrastructure which shall be used by the applicant.

3. Do gambling companies face any difficulties when intending to operate in Malta?

The gaming regulatory framework developed by the Maltese authorities provides for several innovative incentives.

Foremost among these are the wide-ranging incentives available to employees of remote gaming businesses, licensed by the MGA, that may include, subject to satisfying certain criteria, reduced rates of income tax on personal income, exemptions on income derived from patents, refunds on dividends and double taxation relief, apart from all the advantages linked to the free movement of goods and services within the EU.

Non-residents who opt to relocate to Malta are also eligible to benefit from some very attractive tax planning opportunities. These include the High Net Worth Individuals Scheme and the Global Residence Programme.

Other initiatives include a Company Re-domiciliation Act that further serves to enhance Malta’s appeal, as does a very favourable Participation Holding Exemption regime. Albeit taxes levied on gaming activities vary depending on the type of gaming licence that is applicable, it is widely acknowledged that Malta’s tax rates are among the most competitive in the world.

4. What should be considered by those who plan to obtain Malta license for remote gambling?

With a sound jurisdiction that steers clear of bureaucracy and that has a proven track record, the iGaming industry in Malta is continuing to build on its successful trajectory. The next three years will see the sector, as certain regulations are re-visited and new schemes intended to sustain the industry’s rapid growth are introduced.

The number of licensees, both local and overseas, operating under a Maltese gaming legislation which number continues to increase consistently year-on-year as does the influx in gaming operators setting up shop locally, benefitting from the advanced technical capability and relatively low labour costs of the local workforce.

As jurisdictions try to catch up by adopting Malta’s regulatory approach, the MGA, together with the Maltese authorities, continues its mission to create the right environment for gaming operators to feel safe and protected.

A consistent approach to regulation, together with the launch of Gaming Malta and the Gaming Academy, will ensure that Malta will continue to be considered by the gaming industry as a centre of excellence – both as a gaming jurisdiction as well as a dynamic economic hub for iGaming and its ancillary services.

The detailed process related to the MGA online Gaming license application can be accessed here. This document has been drafted courtesy of the Malta Gaming Authority.

5. What were the major changes that occurred in Malta recently?

Malta’s legislative framework has always been a very innovative one. Earlier this year, the MGA has introduced the Skill Games Regulations (Fantasy Sports). The latter regulations are now in force and already big names such as Draftkings and Fanteam have acquired such license. A fantasy sports game will qualify for this type of license if there is a monetary prize, if the winning is predominantly determined through the skill or knowledge of the player and if the result is determined by the accumulation of statistical results of the performance of a number of individuals in sporting events. A controlled skill games licence may be a licence to provide a service for the purposes of engaging with end consumers, or a licence to provide a supply that is in a business-to-business capacity. The license is valid for five years and is subject to a number of requirements, including a procedure to ensure that the persons behind the business are fit and proper, financial and system auditing to ensure that the operation is fair, sound and secure, and other measures to prevent fraud and money-laundering, a consumer-centric approach to the business, a high level of information security and segregation of player funds.

Malta currently awards B2C (Business to Customer) and B2B (Business to Business) license the MGA.Last year, the MGA has also issued a position on technical infrastructures. The approach adopted by this body is intended to provide the necessary flexibility for operators to exploit the benefits of technology; including cloud hosting solutions while ensuring adequate supervision over an operator’s systems.

6. How will Brexit impact Europe’s gambling industry? Will companies have to change their jurisdictions?

According to 888’s annual report, it states: “The proposed status of Gibraltar in relation to the United Kingdom as a result of ‘Brexit’ is at present unclear. If 888 were to remain registered, licensed and operating in Gibraltar in these circumstances, its ability to rely on EU freedom of services/establishment principles in supplying its services within the EU will be limited.”

It went on to state: “Brexit could adversely affect economic or market conditions in the United Kingdom, Europe or globally and could contribute to instability in global financial markets, in particular until there is more certainty as to the form that Brexit will take and its effect on Gibraltar, the United Kingdom and the EU. Malta may be considered as an alternative ‘dot com’ licensing jurisdiction.”

As a result of the Brexit and the proposed status of Gibraltar in relation with the UK, I definitely think that this will affect Malta positively. Throughout the years, Malta’s tax rebate policies were surely the island’s main assets and they have encouraged business relocation from all over Europe and beyond. Malta is improving its competitiveness according to a report released by the World Economic Forum. In the report, Malta was placed 40th in the overall ranking, making the fifth largest jump out of the 138 countries involved. This was the highest position achieved within the last decade.

Do you need more information? We at Fairwinds Management Limited are teamed up with Gambling Consultant Iosif Galea to provide you a holistic service. Together we will help you in the application process to obtain an iGaming and betting license, create business plans and forecasts, among other services. Get in touch with one of Fairwinds Management Limited Directors, Ms Joceline Caruana, B.Com, M.Acc, Melit, AIA, Cert. Tax on jcaruana@fairwindsmanagement.net to get started. More information about Iosif Galea here: www.gamblingconsultantmalta.com