Online Gaming and Affiliates
Malta is home to a flourishing remote gaming industry, having one of the World`s leading I-Gaming jurisdictions, which safeguards the interests of both operators and players. Over 250 registered online gaming companies on the Maltese Islands, more than 600 licenses issued and a strong Maltese and international workforce of around 8,000 professionals are a proof of the industry´s success.
Malta's Pros for iGaming
Besides a reputable legal framework, further advantages of choosing Malta as a gaming destination are a state-of-the-art telecommunications infrastructure, an efficient license process at moderate cost, trustworthy financial services institutions, an attractive EU-approved refundable tax credit and tax consolidation system and under Maltese law and last but not least a stable political climate.
Malta Gaming Authority (MGA)
All gaming operators carrying out the below mentioned activities must be licensed by the Malta Gaming Authority (MGA) according the Gaming Act (Legal Notice 204 of 2018, Chapter 583), which came into force on the 1st August, 2018, and the Gaming Authorisations Regulations 2018 (Legal Notice 243 of 2018, Chapter 583).
The Malta Gaming Authority (MGA) is the single, independent, regulatory body responsible for the governance of all gaming activities in Malta and has the power to issue licenses for both land-based and remote gambling activities.
Malta Gaming Licenses
The remote gaming sector is the most dynamic and the fastest growing gaming sector in Malta, which is regulated under the provisions of the Remote Gaming Regulations.
The Malta Gaming Authority (MGA) may issue licences of the following categories:
- Gaming Service licence: a business to consumer licence to offer or carry out a gaming service; allowing the operator to offer, provide or operate games whereby players may participate.
- Critical Gaming Supply licence: a business-to-business licence to provide or carry out a critical gaming supply.
The following services shall each constitute a gaming service:
- 1. offering, provision or operation of a gaming service;
- hosting by a person in his premises accessible to the public, the operation or making available for use a gaming device or gaming system
The following services shall each constitute a critical gaming supply:
- 1. supply and management of material elements of a game;
- supply and management of software, to generate, capture, control or process essential regulatory record and/or supply and management of the control system itself on which the software resides.
The Remote Gaming Regulations establish 4 types of Remote Gaming Licenses , being:
Applicants applying for a gaming service or a critical gaming supply can offer one or more of the following game types:
- Type 1 - Games of chance played against the house, the outcome of which is determined by a random generator, and shall include casino type games, including roulette, blackjack, baccarat, poker played against the house, lotteries, secondary lotteries and virtual sports games; and/or;
- Type 2 - Games of chance played against the house, the outcome of which is not generated randomly, but is determined by the result of an event or competition extraneous to a game of chance, and whereby the operator manages his or her own risk by managing the odds offered to the player; and/or;
- Type 3 – Games of chance not played against the house and wherein the operator is not exposed to gaming risk, but generates revenue by taking a commission or other charge based on the stakes or the prize, and shall include player versus player games such as poker, bingo, betting exchange, and other commission based games; and/or;
- Type 4 – Controlled skill games as per regulation 8 of the Gaming Authorisations Regulations.
Provided further that in the case of a game displaying elements which may fall under more than one of the types referred to above, the Authority shall have full discretion in categorising the game in the type it believes closest reflects the nature of the game.
A separate approval is required for each gaming vertical that requires safeguards in order to ensure that it is offered in a manner which adheres to the Law and the regulatory objectives:
- 1. Casino;
- 2. Live casino;
- 3. Lotteries and secondary lotteries;
- 4. Fixed odds betting;
- 5. Pool betting, including betting exchange;
- 6. Poker and other commission-based, peer-to-peer games such as bingo, but excluding betting exchange;
- 7. Lottery messenger services; and;
- 8. Controlled skill games.
- The gaming operator must be a company incorporated in Malta or another EU country
- No restrictions on the nationality of the ultimate beneficial owners of the company
- Shareholders, directors and persons carrying out key functions must be approved by the MGA
- Players’ funds must be kept separate from operation moneys
- Minimum share capital to be paid up:
- B2C Type 1 or 2 – €100,000
- B2C Type 3 or 4 – €40,000
The Remote Gaming Application Process
Applications for licences can be submitted to the MGA via the Licensee Relationship Management System (LRMS)./p>
Stage 1 - General Application
- 1. Fit and Proper: Whether an applicant is fit and proper to conduct gaming business: Due diligence is carried out on all key persons, directors of the prospective gaming company and shareholders having 5% or more interest
- 2. Business Planning: Whether an applicant is correctly prepared from a business strategy perspective: business plan and 3-year financial projections.
- 3. Operational & Statutory Requirements: Whether an applicant meets the operational and statutory requirements and obligations prescribed by law and policy. Including:
- 1. Company formation
- 2. Website text and content
- 3. Relations with service providers
- 4. Technical documentation
- 5. System/operations control procedures (correct implementation of the system and tested, in a technical environment, before going live)
- Go-ahead is given by the MGA to implement the proposed infrastructure prior to going live
- Implementation and systems audit, to be completed within 60 days from go-ahead
- On successful completion of the above process, the MGA issues a licence valid for 10 years
- Go live- within 60 days from licence issuance
- Compliance audit within first year of operation
Stage 2 - Systems Audit
Stage 3 - Post - licensing Requirements
Specific MGA Compliance Requirements
We at Kresse International ensure the client meets further specific MGA requirements.
At pre-application stage our competent gaming team at Kresse International will ensure that the client’s application has been correctly developed and all necessary preconditions are met.
The former requirement of a key official has been replaced with 15 key functions/services, which need to be approved by the MGA. Further details will be provided during the initial consultation with Kresse International.
Fees and Taxation
For all the rates please click the following link: See Compliance Contribution
Affiliate Marketing Companies in Online Gaming
Affiliate marketing companies, offering an affiliate program in the online gaming sector, are generally free in their commercial activities in and from Malta and do not need an MGA license. But it is vital to make sure that such activities do not penetrate into the regulated sector of online gaming which is defined in the Remote Gaming Regulations.
We at Kresse International advise our clients how to avoid conflicts with the Regulations, or, if necessary, how to apply for the relevant remote gaming licence category with MGA.
Dr. Kresse International Law Firm and KME Consulting
We at Kresse International and KME provide our gaming clients with a comprehensive range of legal and corporate services, including:
- Guidance through the complete remote gaming license process from pre-application to post-application stage
- Compliance with all license conditions and specific further MGA requirements
- Corporate services, such as company set-up, opening of bank accounts, directorship and company secretary services, accounts, tax and audit support.