Malta, officially known as the Republic of Malta, is a small island country that is considered a part of Southern Europe. Malta is a member of the EU as of 2004 and as such, it follows the directives imposed by the Union. Many gambling aficionados are well familiar with Malta as it is one of the most prominent gambling licensing authorities in the iGaming sector.
Many refer to Malta as a tax haven which is another reason for numerous gambling businesses to choose to apply for licenses from the Maltese authorities. As far as the gambling scene in Malta goes, in 1992, the country implemented the Lotto Act which was the first law that legalized the first type of gambling activity in the island country.
The following years had several laws enacted, with the Gaming Act being the main law governing gambling activities in Malta. Throughout the years to improve the way the industry is regulated, the Gaming Act has been amended several times. One of the more important changes in the gambling regulation of the country came into effect in 2004, with Malta legalizing online gambling.
Under the Gaming Act, operators must obtain a license from the Malta Gaming Authority (MGA) to be able to conduct gambling activities. Due to the favorable tax rates, Malta has become one of the gambling hubs of the world, with the MGA having licensed about 10% of the online gambling operators in the world.
History of Gambling in Malta
Gambling has been a part of Malta’s history for numerous years, with games like Cippitatu being popular way before the country passed any gambling laws. The first piece of legislation regulating gambling that was enacted in Malta was the Lotto Act which was implemented in 1922. This law legalized the game of Lotto, which was the first form of gambling legally conducted in Malta. In the following 100 years, there were several other laws passed by the Maltese government, establishing an example for other countries trying to regulate gambling.
In 2001, the Lottery Gaming Authority (LGA) was introduced as the control board of Malta, regulating the majority of gambling activities in the country. Later, the authority was renamed the Malta Gaming Authority (MGA), with regulating and licensing of gambling businesses in Malta falling under the remit of the MGA until the present day.
In 2004, Malta became the first country in the EU to introduce a legal framework that would regulate online gambling. Thanks to the new law that has been implemented by the island country, online gaming operators had a set of rules to abide by to be able to legally conduct remote gambling services. The regulatory body that issues remote gambling licenses and is also responsible for overseeing the operations of online gambling license holders is the MGA.
With the iGaming industry growing significantly in the next decade or so, Malta’s legal framework proved to be very successful. Instead of struggling to abide by the laws of other jurisdictions, many gambling operators opted for a license from the MGA, with the Maltese laws being easy to comply with.
In 2018, the Gaming Act was passed, setting up some new regulations for the gambling industry in Malta. This is also the main piece of legislation that is currently governing almost all gambling activities in the island country.
Throughout the years, Malta has become one of the top jurisdictions for gambling regulations, with many major gambling companies choosing to settle their headquarters in the island country. In addition to that, this is the place where the biggest gaming event in the world, the Summit of iGaming in Malta (SIGMA), was launched.
Online Gambling in Malta
When it comes to online gambling, Malta has set the example for many other countries that want to regulate this type of industry. In 2004, Malta became the first EU country to legalize online gambling, introducing a legal framework for the regulation of the remote gambling sector.
Operators who wish to operate online casinos or sportsbooks are required to obtain a license from the MGA. In fact, Malta is known as one of the gambling hubs in the world, with the MGA having licensed about 10% of the online gambling operators in the world. While the MGA used to license numerous gambling operators, in recent years, it has become more selective and often chooses to license only bigger companies.
The online casino industry in Malta is well-developed and it is extremely important for the country as it offers employment to thousands of people, with this sector also generating quite the revenue thanks to the collected taxes.
While the MGA has licensed a large number of online casinos, none of them accepts players from Malta. This is mainly due to the significantly higher taxes that are levied on Maltese players who have participated in gambling activities. While numerous gambling companies have chosen to operate under licenses issued by the MGA, they target players from other EU countries instead of offering gambling services to Maltese players. Despite being a small country, Malta is a huge gambling hub due to its low tax rates, with numerous companies establishing their headquarters in Malta.
With so many operators to regulate, the MGA’s capability to properly govern the operations of its license holders has significantly worsened. In recent years, the MGA has been criticized for being involved with shady gambling practices and even allowing different mafia organizations to launder large sums of money through online gambling activities in Malta.
The MGA denied such allegations and there still has not been any proof of the Maltese regulator being involved with criminal online gambling activities. Despite that, the reputation of the MGA has been damaged and this would most likely force many companies to leave the Maltese gambling sector.
Gambling Regulator and Licensing in Malta
Gambling operators in Malta are required to apply for a license from the Malta Gaming Authority (MGA), formerly known as the Lottery Gaming Authority (LGA). The MGA was established in 2001 and is the regulatory body that governs gambling activities and the way licensed operators are conducting different forms of gambling.
The MGA issues licenses for both online and land-based gambling activities, covering both B2C and B2B services. The responsibilities of the MGA include preventing criminal activities that are often related to gaming, ensuring a safe and fair gambling environment for players, protecting minors as well as vulnerable people. The regulatory body must also offer assistance to operators applying for licenses, protect the funds and deposits of players, oversee the operations of licensees, ensure the randomness and fairness of outcomes in all games of chance.
Despite recent scandals, the MGA still remains one of the most respected licensing bodies in the global iGaming scene. The MGA is present on the whitelist of the UK Gambling Commission, meaning that online casinos licensed in Malta are among the few non-UK gaming sites that can still accept British players.
The license fees that licensees are required to pay the regulatory body are determined by the Gaming License Fees Regulations of 2017. Licensed operators must pay an annual license fee as well as compliance contribution tax which depends on the type of gambling activity offered by the operator. The fixed annual license fee for a B2C-only gaming license by the MGA is €25,000. If the license is issued only for type 4 gambling, the annual license fee is €10,000.
The license fee for B2B only gaming license is €25,000 for an annual revue below €5 million, €30,000 for an annual revenue over €5 million but below €10 million. If the annual revenue exceeds €10 million, the annual license fee is €35,000. If the B2B license is issued solely for type 4 gaming supply, the annual fee is €10,000. For B2B license for supply and management of software, the annual fee of €3,000 applies for an annual revenue below €1 million. If the annual revenue exceeds that amount, the annual license fee amounts to €5,000.
Gambling Related Taxes in Malta
As already mentioned, one of the reasons for so many gambling businesses to choose the Maltese gambling market is the favorable taxes in the island country. The tax rates that apply to gambling in Malta are determined by the Gaming Tax Regulations Act. A 5% Gaming Tax is levied on the gaming revenue that has been generated thanks to the contribution from Maltese players.
As previously covered, in addition to an annual license fee, licensed gambling operators must also pay a compliance contribution tax. Malta has a progressive taxation model but unlike other similar systems, the Maltese one applies lower rates on higher revenue. The tax base for the gambling tax in Malta is the gaming revenue that has been generated in a single year. The tax rates depend on the type of gambling the operator is conducting.
B2C Type 1 Gambling Compliance Contribution (Between €15,000 and €375,000) | |
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Compliance Contribution per Financial Year | Rate |
For every euro of the initial €3,000,000 | 1.25% |
For every euro of the following €4,500,000 | 1% |
For every euro of the following €5,000,000 | 0.85% |
For every euro of the following €7,500,000 | 0.70% |
For every euro of the following €10,000,000 | 0.55% |
For every euro of the remainder | 0.40% |
B2C Type 2 Gambling Compliance Contribution (Between €25,000 and €600,000) | |
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Compliance Contribution per Financial Year | Rate |
For every euro of the initial €3,000,000 | 4% |
For every euro of the following €4,500,000 | 3% |
For every euro of the following €5,000,000 | 2% |
For every euro of the following €7,500,000 | 1% |
For every euro of the following €10,000,000 | 0.80% |
For every euro of the following €10,000,000 | 0.60% |
For every euro of the remainder | 0.40% |
B2C Type 3 Gambling Compliance Contribution (Between €25,000 and €500,000) | |
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Compliance Contribution per Financial Year | Rate |
For every euro of the initial €2,000,000 | 4% |
For every euro of the following €3,000,000 | 3% |
For every euro of the following €5,000,000 | 2% |
For every euro of the following €5,000,000 | 1% |
For every euro of the following €5,000,000 | 0.80% |
For every euro of the following €10,000,000 | 0.60% |
For every euro of the remainder | 0.40% |
B2C Type 4 Gambling Compliance Contribution (Between €5,000 and €500,000) | |
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Compliance Contribution per Financial Year | Rate |
For every euro of the initial €2,000,000 | 0.50% |
For every euro of the following €3,000,000 | 0.75% |
For every euro of the following €5,000,000 | 1% |
For every euro of the following €5,000,000 | 1.25% |
For every euro of the following €5,000,000 | 1.50% |
For every euro of the following €10,000,000 | 1.75% |
For every euro of the remainder | 2% |
Closing Thoughts
Gambling was legalized in Malta in 1922 with the enactment of the Lotto Act, allowing the distribution of the game. In the following years, the gambling legal framework of the small country has gone through several changes, fitting the constantly changing gambling industry. The piece of legislation that is currently governing gambling in the country is the Gaming Act of 2018.
The regulatory body in Malta is the Malta Gaming Authority (MGA), also responsible for licensing both land-based and online gambling services. While the small country has only four land-based casinos, it boasts an enormous number of online casino operators. After becoming the first EU country to regulate and legalize online gambling, Malta quickly became one of the gambling hubs in the world.
The MGA has licensed over 10% of the virtual casinos in the world, with many operators choosing to be based in Malta due to the friendly tax rates. Despite being a prominent gambling center of the world, Malta is mainly catering to tourists and non-Maltese online players. Despite the legal gambling age being 18+, this age limit applies only to foreign tourists, while Maltese players are required to be at least 25 years old to enter these venues. Meanwhile, online casinos licensed by the MGA do not accept players based in Malta, offering their services only to players from other EU countries.