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Maltas New Regulations on iGaming Taxes and Gambling License Costs
Last changed: July 27 2024 07:36 by PCLMedia
The iGaming industry in Malta has been flourishing since the early 2000s, establishing the island as one of the leading jurisdictions in the world for online gambling. Today, Malta regulates some of the largest operators for remote gambling, offering a wide range of gaming options beyond traditional sports betting and casinos. These options include live betting, lotteries, poker networks, and scratch cards. The Maltese government actively monitors gambling addiction statistics to ensure player safety and address emerging concerns, making Malta a reputable location for iGaming.
Malta as a Leading iGaming Jurisdiction
As the first EU member state to regulate online gambling, Malta has earned a reputation as one of the best-regulated jurisdictions globally. The Malta Gaming Authority (MGA) is known for its rigorous standards, ensuring that Malta iGaming licenses are highly sought after by operators and trusted by players. Obtaining a license is a challenging process, reflecting the high regulatory standards and the demand for a secure gaming environment.
iGaming Tax in Malta for Remote Gambling
Many players prefer operators with a Malta iGaming license due to its reputation for security and trustworthiness. This is especially true for players from countries like the UK who seek alternatives to self-exclusion programs like Gamstop. Malta offers a reliable option with less stringent restrictions, while still ensuring a high level of player protection.
The corporate tax rate for Malta gaming companies is officially set at 35%. However, Malta's tax system allows for significant rebates, effectively lowering the tax burden for companies. Once operators have paid all applicable taxes and distributed dividends, the effective corporate income tax rate can be as low as 5% for active business income and 10% for passive income, such as royalties. This favorable tax regime makes Malta an attractive destination for iGaming operators.
In addition to corporate taxes, the personal gaming tax regime in Malta is appealing to top earners, who pay up to 35%, and professionals, who can pay as little as 15%. These rates are lower than in many other jurisdictions, making Malta competitive for both businesses and individuals.
Requirements for iGaming Operators in Malta
Before discussing the costs associated with obtaining a Malta gambling license, it is important to understand the criteria set by the MGA for eligibility:
- Location: The operator must be established within the EEA/EU.
- Technical and Business Capability: Operators must demonstrate adequate technical and business ability to manage online gaming operations.
- Financial Security: Operators need to prove sufficient financial security to ensure the payment of players' winnings and deposits.
- Fitness and Propriety: Applicants undergo a fitness and propriety test, which includes the submission of due diligence documentation and ancillary documents, along with detailed company procedures and policies.
The MGA evaluates applications through a comprehensive review process, which includes verifying the applicant's business plan, financial forecasts, and strategic growth plans. Operators must comply with share capital requirements, with specific amounts depending on the type of gaming license applied for. For instance, Type 1 and 2 Gaming Service Licenses require a minimum of €100,000 in share capital, while Type 3 and 4 licenses require €40,000. Companies holding multiple license types must contribute €240,000.
Once these requirements are met, the MGA invites applicants to implement the necessary technical environment within 60 days, followed by a System Audit to assess compliance.
Types of Gambling Licenses in Malta and Associated Fees
Operators can apply for one or both categories of licenses:
- B2C License (Business-to-Consumer)
- B2B License (Business-to-Business)
B2C Malta iGaming License
For operators wishing to offer Daily Fantasy Sports (DFS), the annual license fee is €10,000 for both B2B and B2C operations. The renewal fee structure for B2C licenses is as follows:
- Annual Fee (non-refundable, paid in advance): €25,000
- Renewal/Administrative Fee: €5,000
- Compliance Contribution Fees:
- One license class: Minimum of €15,000 up to €375,000 (0.4% to 1.25%)
- Two license classes: Minimum of €25,000 up to €600,000 (0.4% to 4%)
- Three license classes: Minimum of €25,000 to €500,000 (0.4% to 4%)
B2B Malta iGaming License
B2B license holders are exempt from compliance contribution fees. Their annual fee depends on gaming revenue, with Class 4 license fees ranging from €25,000 to €35,000. This fee is based on revenue and can be calculated using an online tax Malta calculator.
Additional Administrative Fees for Malta Gambling Licenses
The Malta gambling license involves several additional administrative costs throughout the application process:
- Application Fee for New License: €5,000, payable upon application
- License Renewal Fee: €5,000
- Key Function Certificate: €50 per role
- Transfer of Qualifying Interest in a Licensee: €1,500, payable upon request
- Corporate Changes Fee: €1,500
- Annual Maintenance Fee for Recognition Notice: €5,000
- Gaming Tax: 5% applied to gaming revenue generated from players based in Malta per year
Benefits of a Malta iGaming License
A Malta iGaming license offers several benefits, including:
- Efficient Regulation: Malta is home to a highly efficient regulatory body known for its robust standards.
- Trust and Popularity: The MGA is a trusted licensing authority that attracts a large number of players.
- Gaming-Friendly Environment: Malta provides a gaming-friendly environment with non-Gamstop options.
- Robust Regulatory Framework: The framework is aligned with EU directives, ensuring high standards of operation.
- Attractive Fiscal Regime: Malta offers an attractive fiscal regime with significant tax benefits.
- Simple Setup Process: The application process is straightforward, facilitating a smoother transition for operators.
With many operators providing iGaming services to players worldwide, having a Malta iGaming license positions them well to attract and retain customers. The license's popularity and favorable fiscal regime make it a top choice in the gambling market.
Here’s a comparison of iGaming licenses from different global jurisdictions, including Malta, with a focus on their regulatory frameworks, tax regimes, costs, and benefits:
Comparing Global iGaming Licenses
Malta iGaming License
Overview
- Regulatory Body: Malta Gaming Authority (MGA)
- Reputation: Highly regarded for strict regulations and player safety.
- Licenses Offered: B2C (Business-to-Consumer) and B2B (Business-to-Business)
Costs and Fees
- Application Fee: €5,000
- Annual License Fee: €25,000 (B2C), varies for B2B based on revenue
- Compliance Contribution Fees: 0.4% to 4% based on revenue and license class
Tax Regime
- Corporate Tax: 35%, effectively reduced to 5% or 10% through rebates
- Gaming Tax: 5% on gaming revenue from Maltese players
Benefits
- Robust regulatory framework aligned with EU directives.
- Highly efficient and trusted regulator.
- Favorable tax incentives and rebates.
United Kingdom iGaming License
Overview
- Regulatory Body: UK Gambling Commission (UKGC)
- Reputation: Considered one of the most stringent and reputable regulators.
- Licenses Offered: Casino, Bingo, Betting, and more.
Costs and Fees
- Application Fee: Ranges from £2,640 to £57,304, depending on the type of license and business size
- Annual License Fee: Based on gross gambling yield (GGY); ranges from £3,408 to £793,729
Tax Regime
- Remote Gaming Duty: 21% on GGY
- General Betting Duty: Varies depending on the type of bet
Benefits
- Strong regulatory framework ensuring player protection.
- Access to the large UK market.
- High level of trust and credibility with players.
Gibraltar iGaming License
Overview - Regulatory Body: Gibraltar Regulatory Authority
- Reputation: Known for a stable regulatory environment and favorable tax conditions.
- Licenses Offered: Betting, Casino, Poker, and more.
Costs and Fees
- Application Fee: £2,000
- Annual License Fee: £85,000 for most operators
Tax Regime - Gaming Tax: 0.15% of turnover, capped at £425,000 annually - Corporate Tax: 10% on profits
Benefits - Low gaming tax and corporate tax rates.
- Access to European markets.
- Strong reputation and regulatory oversight.
Curacao iGaming License
Overview
- Regulatory Body: Curacao eGaming
- Reputation: Known for ease of entry and cost-effectiveness but with less stringent regulations.
- Licenses Offered: A single license covers all gaming activities.
Costs and Fees
- Application Fee: Approximately $34,000 (varies by service provider)
- Annual License Fee: Around $5,600
Tax Regime - Corporate Tax: 2% on net profits
- No Gaming Tax
Benefits
- Cost-effective licensing process.
- Fast application and approval process.
- Covers multiple types of gaming with a single license.
Isle of Man iGaming License
Overview
- Regulatory Body: Isle of Man Gambling Supervision Commission
- Reputation: Well-regulated with a focus on innovation and technology.
- Licenses Offered: Casino, Betting, Poker, and more.
Costs and Fees
- Application Fee: £5,000
- Annual License Fee: £35,000 for a full license
Tax Regime - Gaming Duty: 1.5% to 0.1% on GGY, depending on the amount
- Corporate Tax: 0% on most business profits
Benefits
- Competitive gaming duty rates.
- Strong legal and technological infrastructure.
- Well-respected regulatory framework.
Alderney iGaming License
Overview
- Regulatory Body: Alderney Gambling Control Commission (AGCC)
- Reputation: Highly respected for its comprehensive and transparent regulatory framework.
- Licenses Offered: Category 1 and Category 2 licenses for various gaming activities.
Costs and Fees
- Application Fee: £17,000
- Annual License Fee: Ranges from £35,000 to £400,000, depending on GGY
Tax Regime
- Gaming Tax: No direct gaming tax, but licensing fees are substantial
- Corporate Tax: 0% on most business profits
Benefits
- High standards of regulation and transparency.
- No direct gaming taxes.
- Access to European and international markets.
Singapore iGaming License
Overview
- Regulatory Body: Singapore Totalisator Board and Casino Regulatory Authority
- Reputation: Stringent regulation with a focus on minimizing social harm.
- Licenses Offered: Limited primarily to local operations (e.g., Singapore Pools).
Costs and Fees - Application Fee: Confidential and varies widely
- Annual License Fee: Not publicly specified, significant regulatory fees
Tax Regime
- Gaming Tax: 15% to 22% on casino GGY
- Corporate Tax: 17% on profits
Benefits
- Access to a wealthy and highly regulated market.
- Strong government support and oversight.
- High levels of trust from local players.
New Jersey, USA iGaming License
Overview
- Regulatory Body: New Jersey Division of Gaming Enforcement
- Reputation: Part of the growing legal online gambling market in the USA.
- Licenses Offered: Casino, Poker, Sports Betting.
Costs and Fees - Application Fee: $100,000 (initial)
- Annual License Fee: Based on revenue; varies
Tax Regime
- Gaming Tax: 15% on online gaming revenue, 8.5% on sports betting revenue
- Corporate Tax: 9% on profits
Benefits
- Access to a large and growing market.
- Part of a highly regulated and expanding legal framework in the USA.
- High trust among local players.
Summary
When comparing iGaming licenses globally, each jurisdiction offers unique advantages and challenges. Malta and the UK are known for their rigorous regulatory frameworks and access to large markets, but they come with higher costs and taxes. Jurisdictions like Curacao and Gibraltar offer lower tax rates and fees but have different levels of regulatory oversight.
Operators should consider factors such as tax implications, market access, regulatory requirements, and operational costs when choosing the most suitable licensing jurisdiction for their needs. Malta remains a top choice due to its favorable tax regime, strong regulatory environment, and access to the EU market, while other jurisdictions like the Isle of Man and Gibraltar provide competitive alternatives with specific benefits.
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