Malta is recognized as one of the most appealing locations for the establishment of a gambling company. Malta was the first country in the European Union to legislate online gaming in 2004, thereby revolutionizing the gaming industry worldwide. The Malta Gaming Authority (MGA)[1] regulates all internet gaming companies in Malta, and the Maltese government has consistently endeavored to improve the gaming law since its inception.
The objective of this article is to provide a comprehensive overview of the Internet gaming sector in Malta and to outline the process of registering a gaming company in Malta. This will explain why Malta has become the most sought-after destination for the establishment of internet gaming companies.
What Comprises The Internet Gaming Industry Of Malta?
Internet gaming pertains to online activities or events that involve the act of betting. The global prevalence of these games is on the rise, and the following is a sample of the most popular games in the internet gaming industry:
- Virtual sports and sports betting;
- Peer to Peer games;
- Lotteries;
- Poker;
- Online casinos and similar games.
Reasons For Setting Up A Gaming Company In Malta
There are numerous justifications for establishing an internet gaming company in Malta. The following are a few of them:
Accessibility and EU membership: Malta is situated in the Central Mediterranean and is a member of the European Union, which renders it highly accessible from all of the Union’s main airports.
MGA’s overhaul: Prior to the establishment of the MGA, the Lotteries and Gaming Authority (LGA) was an additional regulatory body. The rebranding of MGA and the amendments to its regulatory framework serve as indicators to the gaming industry regarding responsible gaming, thereby rendering Malta a more appealing destination.
Necessary technological and legislative infrastructure: Malta has established the requisite technological and legislative infrastructure to facilitate the overall growth of internet gaming companies.
Mediterranean lifestyle: Malta’s leisurely lifestyle is another significant factor that has attracted numerous internet gaming companies to establish their headquarters.
What are the various forms of licenses that are necessary for the establishment of a gaming company in Malta?
The process of establishing a gaming company in Malta is complex and time-consuming due to the numerous divisions and complexities that are present in order to address every vertical. In Malta, there are two categories of licenses for conducting remote gaming businesses: Business to Customer (B2C) and Business to Business (B2B).
An application must be submitted in one of the four categories specified by the statute. The following are the various classes:
Class 1:
The gaming companies provide games that are played repeatedly and entail a financial risk. This course is intended for a variety of gaming options, including bingo, machines, lotteries, and casinos.
Class 2:
In this course, the risk of the game is determined by individual events, including fixed odds wagering and sports betting. This is where the proposal outcome is determined by the event’s outcome.
Class 3:
Games that typically involve multi-players and are played against other participants, with the operator having no risk. In this instance, the operator receives commissions from the transactions of the payers.
Class 4:
Software vendors who host and administer remote gaming operators from the aforementioned categories typically acquire this license. Class 4 license holders are prohibited from engaging in the game and are restricted to earning revenue through commissions.
Validity: The license issued to an internet gambling company in Malta is valid for a period of ten years.
Process Of Starting A Gaming Company In Malta
In Malta, the establishment of a gaming company necessitates the completion of numerous phases, which are contingent upon the organization’s structure and the quantity of game classes it implements. However, the most difficult aspect of the business is obtaining a gaming license. It is frequently recommended that the promoters engage in a thorough discussion with the MGA prior to beginning the company registration procedure for the project.
The procedure for establishing a gaming company in Malta is as follows:
Step 1: Set up a company
The most recommended business vehicle for a gaming company is a limited liability company, as it is a highly efficient process. Registered office space, a minimum of two shareholders, MoA and AoA, a bank account in the business’s name, and other requirements are among the requirements for establishing a limited liability company.
Step 2: License application process
The license application process with the MGA is a protracted process, as the MGA conducts a comprehensive evaluation to determine whether a license should be issued to the company. The company’s management, directors, financing, substance, and other pertinent information are examined. Afterward, MGA requires the following actions:
- Fit and Proper Review: The company considers a variety of factors, including its financial history, consumer safety, and industry experience. Promoters are requested to submit numerous documents.
- Business plan: A comprehensive Business Plan is necessary for submission, which should include the business’s objectives, the type of game, and the anticipated financial assets.
- Operational and statutory requirements: The business must satisfy the operational requirements, which include the technical setup, terms and conditions, and prescribed statutory requirements regarding the share capital and other matters.
Step 3: Technical and System Audit
MGA implements modifications to the business model subsequent to the submission of the aforementioned documents. MGA requires the registrant to submit a report on the company’s technical and system audit prior to the game’s launch.
Step 4: Compliance review
The business is granted a provisional license by MGA to operate for the next six months after all the aforementioned steps have been completed. The organization commences operations during this period; however, it also endures numerous audits and compliance reviews.
Step 5: Official gaming license
The applicant obtains the official gaming license from MGA upon the conclusion of the review period and the approval of the gaming license.
Conclusion
It is evident from the preceding discourse that the establishment of a gaming company in Malta is not a rapid process. It typically requires 12-18 weeks to complete, during which time it is subjected to numerous audits and inspections. It is a time-consuming procedure to prevent the game from being used as a platform for the purpose of money laundering, data theft, and the protection of consumers’ privacy.