The Current iGaming Legal LandscapeMEDIA ROOM
The current legal landscape in Malta – Where are we at the present moment, and how we got here
Malta was the first European Union (EU) member state to fully regulate online gaming operators. The regulation of online gaming in Malta came into force in 2000 through amendments to the Public Lotto Ordinance , which was superseded by the Lotteries and Other Games Act (LOGA) in 2002. The latter also set up the Lotteries and Gaming Authority (LGA), which was to regulate the industry and oversee the operations of the industry players, as licensed by the same Authority.
On the 20th April 2004, the Remote Gaming Regulations (the Regulations) came into force. These regulations shifted the focus from regulation of the games being provided to regulation of the means in which the gaming is carried out. The new Maltese regulatory regime became both game neutral (therefore applicable to all types of games, not merely betting operations) and technology neutral, (therefore applicable to all types of technologies, namely internet, mobile, telephone and other types of remote gaming).
Today, Malta has established itself as a regulatory hub for online gaming. The LGA has to date issued over 600 licences to remote gaming operators, making Malta one of the leading European jurisdictions within the sector . A number of Interactive TV and mobile gaming operators are also based and licensed in Malta. This success is largely due to the Maltese government’s policy, which favours the freedom to provide remote gaming services both in Malta and within in the European internal market. Thus, whilst creating a solid regulatory framework aimed at ensuring that licensees carry out their operations diligently, Malta has also taken an open approach to licensing, with low barriers to entry, low licence fees and an expedient licensing process.
Additionally, the LGA has avoided taking a bureaucratic approach to the licensing of remote gaming operators, by adopting an industry-focused, practical attitude to the particular circumstances of each applicant or licensee, and by implementing measures to address issues which licensees may bring to their attention. One recent example of this is the fact that whereas it was previously mandatory for a licensee to keep its gaming servers in Malta, the LGA now accepts that a server be placed within a foreign jurisdiction, provided that certain obligations as it may impose, are adhered to.
Remote gaming operators were quick to choose Malta even in view of its competitive tax regime. The current corporate tax rate in Malta is fixed at 35% . However, operators generally benefit from substantially lower combined effective Malta tax rates (often no more than 5%) by application of Malta’s full imputation and refundable tax credit systems. As such, upon a distribution of qualifying dividends by a Malta company, its shareholder/s would be entitled to a refund (typically six-sevenths) of Malta tax suffered at the level of the Malta company on the profits out of which the dividends were distributed.
Furthermore, specific gaming taxes apply. These are subject to a tax-capping mechanism, limiting the gambling tax paid annually by any licensee to a maximum of €466,000.
Other factors which contribute to Malta’s success are the availability of state-of-the art infrastructure, specialised English-speaking professionals, membership of the European Union, political stability, the presence of all major audit firms, a solid banking sector, and over ten years’ experience in the sector.