CSB Group offers a "one-stop-shop" service to online gaming operators by assisting clients in setting up or relocating their gaming operation to Malta. The Group has been involved in the iGaming industry since its inception in Malta – that is since 2000 and assists clients in submitting and pursuing a Gaming Licence application to the Malta Gaming Authority (MGA).
THE MALTA ONLINE GAMING LICENCE APPLICATION PROCESS
Operators looking to obtain an online gaming licence in Malta are required to undergo a rigorous application process in the course of which applicants are required to submit detailed information and documentation relating to their proposed operations for review and scrutiny by the Malta Gaming Authority (MGA). The process is explained in further detail below.
- The Application Process
- Malta Gaming Authority (MGA) Fit & Proper Test
- Business Planning
- Operational and Statutory Requirements
- Malta Online Gaming Licence Systems Review
- Compliance Review
THE APPLICATION PROCESS
The application process has been harmonised into a singular stage. Applicants can submit all the required information at one go and the MGA commits itself to the analysis of all information through multiple internal process streams.
In the application stage the MGA assesses whether an applicant:
- Is fit and proper to conduct gaming business.
- Is correctly prepared from a business strategy perspective.
- Has the operational and statutory requirements to meet the obligations prescribed by law and policy.
- Has correctly implemented and tested, on a technical environment, what has been applied for, before going live.
1. Malta Gaming Authority (MGA) Fit & Proper Test
The MGA conducts a fit and proper exercise on the applicant by assessing all information related to all shareholders, UBOs, and persons involved in finance and management; as well as on the business viability of the operation. The MGA conducts probity investigations with other national and international regulatory bodies and law enforcement agencies.
2. Business Planning
The MGA conducts an in-depth financial analysis of the applicant's business plan. The applicant's business plan is expected to have a detailed forecast of the operation, inclusive of marketing and distribution strategies, HR plan and growth targets.
3. Operational and Statutory Requirements
The applicant is examined on the instruments required to conduct the business. This process includes examining incorporation documents, the operational policies and procedures, the games and the gaming and control systems, the technical setup, including system, network and application architecture, the rules, terms, conditions and procedures of the games, and other documents which might be required.
Furthermore, a licensee is subject to minimum issued and paid-up share capital requirements:
- Type 1 – Minimum €100,000
- Type 2 – Minimum €100,000
- Type 3 – Minimum €40,000
- Type 4 – Minimum €40,000
Companies with multiple type approvals are required to meet the above share capital requirements cumulatively up to a minimum capping of €240,000.
The above three components constitute the desk-based audit of the application requirements. Inconsistent and low quality applications will be dropped and the applicant will be subject to re-application.
Malta Online Gaming License Systems Review
Once all three areas are successfully completed the MGA will inform the applicant that the application was successful and will invite the applicant to implement onto a technical environment in preparation to going live. The applicant will be allowed 60 days to complete this operation after which the application will be considered as suspended and subject to re-application. At any point within those 60 days the applicant may trigger a request for an external System Review (performed by an independent 3rd party contracted by the MGA against a fixed market price). The System Review will audit the live environment against the proposed application.
At this stage the MGA expects minimal deviation from the application. Significant changes to the gaming system will require the applicant to re-apply through a new application. On successful completion of the certification process, the Authority issues a five year licence.
4. Compliance Review
The MGA mandates that after going live a Licensee shall undergo a number of compliance reviews of its operation, performed by independent 3rd parties contracted by the MGA against a fixed market price.
The MGA will require such reviews to take place on the following schedule:
- After the first year of operation after being licensed by the MGA.
- Any other audit depending on the compliance plan set by the MGA.
Failure of a compliance review could lead to suspension or termination of a licence.
MALTA GAMING LICENSE COST
The MGA applies non-refundable administrative fees upon an application for a Malta gambling license. Annual license fees as well as compliance contributions are also to be paid to the MGA based on revenue generated and the license type, whether within a B2C or B2B framework. Whether it's an online casino license, a sportsbook, a poker room or a games platform, CSB Group's iGaming advisors will guide you through the various applicable MGA fees, and based on your desired e-gaming operation will consult on the license type required. Our advisors will also support with the incorporation of a trading or holding company as well as associated services like tax advisory and accounting specifically for iGaming companies.
FINANCIAL AND OPERATIONAL ACTIVITY
On successful completion of a Malta gaming license application process, the applicant, now a Licensee, is granted a ten (10) year Licence.
The Licensee is deemed to commence activity upon acquiring the gambling license. Any changes to the gaming equipment, such as rules of the game or any other intended divergences from the original remote gaming license application must be submitted to the Authority for approval.
Other key reports required by the Authority to monitor the overall gaming activity are listed hereunder.
- Yearly audited accounts
An audited set of financial statements prepared and audited in accordance with the International Financial Reporting Standards and including a Directors' Report. These are to be submitted within 180 days from the end of the company's financial year.
- Half-Yearly Reports
Management Accounts covering the first 6 months of a company's financial year are to be submitted by the end of the 8th month of its financial year.
- Monthly Reports
Anyone possessing a Malta online gaming license has to report the following on a monthly basis:
- Gaming Tax report
- Player Funds report
This list of reports is not an exhaustive one and others may be requested from time to time.
Under the new Law (2018), there are only 2 types of licenses. Business to Customer (B2C) and Business to Business (B2B) The MGA's Chief Executive Officer, Heathcliff Farrugia, said that this will simplify the existing process and encourage further growth in the iGaming sector in Malta.
*Source - MGA (Malta Gaming Authority)
THE BENEFITS OF OBTAINING A MALTA GAMING LICENSE
Expert Work Force
One of the key elements of Malta's iGaming eco-system is most certainly an expert and trained workforce across various business areas. Over 10,000 iGaming employees work directly in iGaming companies in Malta and this number is growing every year. The quality and experience that trained candidates can bring to a business is critical to a successful operation.
Low Tax Rates
Malta's advantageous tax regime is a pillar to Malta's strong economy. A lower tax rate has enabled businesses to flourish due to re-investing profits in the business and building a future proof business with strong financial backing.
A strong business needs a strong and stable economy to flourish. Malta's ability over the years to continuously pursue growth at different levels, increase its GDP, reduce unemployment and contain inflation are all indicators of a country that has set its eyes on a continuous, stable and consistent growth approach.
We are living in a globalised world and economy. Since Malta's accession to the EU, being the smallest member state, the country has pinned its name on the map in various economic sectors. From a thriving iGaming jurisdiction to a FINTECH hub and more recently an innovator in E-Sports and peer to peer gaming business models.
Since Malta enacted sector-specific regulations in iGaming in 2004, the Malta License has gone from strength to strength. This success has been the result of a co-ordinated and countrywide effort to be pro-active in an industry which when regulated properly can create an eco-system that allows various local economic sectors to flourish.
Malta's license is a trademark in excellence for player trust. The Malta Gaming Authority ensures that all Malta operators are regularly vetted and audited to ensure that player protection mechanisms are in place but importantly monitored and implemented. The Authority also ensures that all games played online and licenced in Malta are approved and tested by independent and licenced testing houses that guarantee the integrity of the games.
High Anti Money Laundering Standards
The recent FIAU implementation procedures on specific sectors of the economy have most certainly rubber-stamped the industry's robustness and high anti-money laundering standards in gaming. Regular FIAU and MGA inspections on licences have enabled the authorities to work together with the industry and raise the bar on AML.
As a full member of the European Union since 2004, a Malta company is EU compliant and approved. This clearly renders this Malta company as an excellent entity to carry out international business. This onshore status provides the comfort of doing business in a highly regulated and stable environment.
FREQUENTLY ASKED QUESTIONS ABOUT OBTAINING A REMOTE GAMING LICENSE IN MALTA
What are the steps that need to be taken when applying for a Malta Gaming License?
The Malta iGaming license application process is an exercise in understanding better who the operator is and his intentions and modus operandi of operating from Malta. A partner like the CSB Group in Malta is essential in guiding operators in the different necessary steps to achieving this objective.
What licence categories are available?
The Malta iGaming regime provides essentially two licences, a Business to Business license and a Business to Consumer License. Different licence types are then available within the B2C & B2B frameworks to cater for a variety of products, games & services.
How long does it take to get a Malta Gaming License?
The time taken to obtain a license depends very much on the aptitude of the operator to provide the Gaming Authority with information in a timely manner and to the high standards that the Authority has set.
The CSB Group's iGaming team prepare each and every client application with an eye for detail to pro-actively provide the Malta Gaming Authority with complete and concise client submissions. This, in turn, helps reduce the time taken for a license to be issued.
In which countries can a Malta Gaming License be used?
A Malta iGaming business to consumer License may be used in all countries that don't have any local prohibition on gaming or where a local license is available.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.