While the gaming industry has always been around, it’s only recently that entrepreneurs are catching on to the opportunities that exist. This, coupled with the technological revolution of the past few decades, has created exponential growth in the industry.
However, participating in the gaming sector comes with certain requirements like obtaining a gaming license. This is an important prerequisite that you must fulfill before you even start operating.
Here’s a simple guide on how to apply for, and get a gaming license in Malta.
First of all, there are for types of licenses offered by the Malta Gaming Authority (MGA), namely:
- Class 1: This particular license is suitable for online lotteries and casino-type online games. It’s often referred to as a remote gaming license and is viable for operators that manage their own risk on repetitive games.
- Class 2: This is known as a remote betting license. It applies to fixed odds betting operators who operate based on a self-managed risk model for events based matchbook gaming.
- Class 3: This license will enable you to support and promote remote gaming in Malta. It covers events like Peer-to-Peer gaming and poker rooms.
- Class 4: With this license you’ll be able to manage remote gaming operators. You can also host software vendors on your platform, which makes this more of a B2B license.
Class 1 and Class 2 licenses are only open to companies with a share capital of €10.000. Class 3 and 4 licenses are only available to companies that have a share capital of €40.000.
The Application Process
In order to obtain a gaming license in Malta you need to go through a step-by-step process that looks a little something like this:
Step 1: The Malta Gaming Authority (MGA) will conduct a background check on the applicant to ascertain viability of the business, financing and management aspects. The MGA will also consult with local and international regulatory bodies as part of their “integrity investigation.” Some of the documents that you’ll have to submit with your application include:
- A detailed business plan
- An original certificate
- Certified passport copies
- Original bank statements or letters for the owners
- Undergoing a “fit & proper test”
- Compliance and software audit
- Detailed information on all of your gaming software
- Company registration details including address, agent and secretary
Step 2: The MGA will go through your business plan.
Step 3: The MGA will look at your company’s incorporation documents, your business processes, rules and regulations that you’ve put in place, game procedures, the actual games, application structure and even the system architecture.
Step 4: The MGA will let you know whether or not your application has been successful. If the result is positive, then you’ll be given 60 days to implement your strategy on a technical environment before you actually go live. After completing this requirement you will receive a 5 year license from the MGA.
Step 5: Once you’ve received your license, the MGA will assign an independent auditor to audit your gaming operation and to make sure that you’re still compliant. These audits will occur during the 1st and 3rd year of your business’ operation.
There are several fees involved in the course of applying for a gaming license. This includes an initial license fee of 5, 000 Euros which has to be paid out to the MGA. This is in addition to the annual fees that have to be paid out according to the individual classes. For example Class 1, 2 or 3 license applicants are required to pay a fixed annual fee of 25, 000 Euros to the MGA, whereas class 4 license holders are required to pay an annual fixed fee of 10, 000 Euros.
According to the MGA website, the total cost of getting a gaming license can escalate to €18,835, and this does not take into account the government license fees, which are about €35,000.
The MGA imposes a gaming tax on all license holders and it differs according to the different license classes. Class 1 license holders are required to pay €4,660.00 per month but only for the first six months of operation. Thereafter you’ll pay €7,000.00 per month.
Class 2 license holders are required to pay 0.5% on total bets received or 5% of their gaming income. Class 4 license holders will not pay any tax during the first six months of operation but must pay €2,330.00 per month for the following six months and €4,660.00 per month thereafter.
How long will it take?
It usually takes the MGA about 4 to 6 months to process a gaming license application. It could take longer if the authorities discover that you’ve submitted incomplete documentation. That’s why most entrepreneurs tend to outsource the application process for online gaming licences to an experienced company like the CSB Group to ensure timely and satisfactory results.