Why Malta for your Gaming & Betting Operations

Malta was the first EU Members State, in April 2004, to establish a liberalised and technology neutral regulatory framework for iGaming.

The regulations championed a strict approach to licensing and monitoring of gaming operations. This was somewhat atypical at the time. A heavy-handed regulation was generally considered to be a disincentive to operators seeking an easy set-up subject to minimal or no regulation. Adversely, the Maltese regime pivoted on the principle that strong regulation need not necessarily be a burden.

Over the years, Malta has become increasingly attractive to operators who require a legitimate regulatory platform in an increasingly hostile legal environment. The regulations go to lengths to ensure that operators are serious and that, ultimately, players are protected. The licensing process is rigorous and control systems have to be audited for compliance. Furthermore, the applicant, key persons and beneficiaries have to satisfy ‘fit and proper’ criteria and have to demonstrate that they have the necessary business and technical abilities. In turn, the Malta Gaming Authority (the “Authority”) carries out ongoing monitoring to ensure operations are in line with the law and licence conditions.

Malta therefore avoided the mistake made by other jurisdictions that have suffered from mediocre operations plagued with a high concentration of illegitimate activities due to lack of regulations. Equitable regulation benefits the industry because it ensures compliance with international obligations such as anti-money laundering legislation and data protection legislation amongst others. More specifically, good regulation guarantees enhanced user confidence in the undertakings’ operations and the Authority’s seal of approval to be displayed on licensees’ websites, has become a point of reference for players around the world.

Malta currently operates a full imputation system of taxation, whereby tax charged to the company is imputed to the shareholder in the event of a dividend distribution. This means that a shareholder will not be charged tax twice on dividends. Shareholders are entitled to claim refunds of up to six sevenths of tax charged to the company. The result of such refunds is that the effective total tax paid is of 5%. This regime is fully complaint with international tax standards and with EU legislation.

Coupled with the above, the considerations that Malta enjoys a sovereign credit ‘A’ rating, an excellent economic track record, political stability and has become part of the eurozone, confirm Malta’s attractiveness as an onshore financial centre.

With an ever-increasing work force, the Authority is fully equipped to deal efficiently with licensing applications and with ongoing monitoring. However, it does not limit its role to policing activities. Furthermore, the Authority operates an ‘open door’ policy whereby prospective or licensed operators may discuss an issue upfront with the responsible officials.

Malta boasts a flexible, reliable and highly productive multilingual workforce. The number of university student graduates has more than tripled in the last decade with close to 3,500 students graduating each year. Furthermore, the Authority has recently started providing sessions aimed at training more people in compliance, management and day-to-day running of gaming operations.

Malta has an established state-of-the-art telecommunications infrastructure capable of hosting and delivering round the clock connectivity. Ancillary services such as online payment processors are also available. The World Economic Forum has recently ranked the Maltese Government as the second most successful government in promoting the use of ICT.

In November 2009, Malta ranked first amongst EU member state when it comes to IT and e-government. The 2009 EU e-Government Benchmarking has shown Malta making an outstanding leap in the delivery of e-Government services. In fact Malta has topped the country ranking in both Online Sophistication and Fully Online Availability by achieving the maximum possible score (100%), making it the best performing country in the EU.

Malta has reached maximum possible score (100%) in the ‘One stop Shop’ and ‘User focused portal design’, whilst attaining second and third place respectively in ‘User Satisfaction Monitoring’ and ‘Usability’.

The Malta Remote Gaming Council was set up with the aim of creating a common platform from which operators may address several issues with the benefit of collective experience. The end result is that today industry players can voice their concerns and make proposals via this Council to the relevant authorities.

Not only is Malta in the ideal position in the Mediterranean in its proximity to mainland Europe and North Africa, but it offers a very good quality of life, low criminal rates, excellent health services and diverse entertainment and sport facilities.

Malta is considered to be Europe’s centre in terms of iGaming and this is evidenced from the decision of a number of the industry’s major companies to set up their operations in Malta. Malta’s growth and emergence as an attractive iGaming jurisdiction would not have been possible if it hadn’t been for its constantly evolving regulatory framework which, in spite of its rigorous nature, has been well received by the industry.

With 20 years of experience and know-how and being a jurisdiction which is home to data centres, online payment processors, security auditors, gaming software developers and platform providers, a company seeking to obtain a licence from the Authority will always have the support it needs to manage and grow its operations. This consideration coupled with the tax planning advantages and the other benefits highlighted above, promise to consolidate Malta’s position as the preferred iGaming jurisdiction.