In order to start an iGaming business in Malta, one needs to go through a number of steps, with the main and most complex one being, applying for a remote or land-based gaming licence. The application process is a long one and requires a series of in-depth audits and reviews. With that being said, Malta is one of the most renowned countries in the EU with regards to the iGaming industry, as there are many reasons why Malta makes an excellent destination for iGaming companies.
The Malta Gaming Authority (MGA)regulates and separates the industry in two gaming sectors;
In April 2004, Malta became the first member of the European Union to regulate Remote Gaming. This is the most dynamic sector from the two and in August 2018, a new Gaming framework came into force, that ensured the regulatory objectives are met, but also offering more room for innovation within the sector.
Regulated under Chapter 583 of the Laws of Malta
This sector consists of all types of gaming taking place in physical premises. This includes the following operators;
- Casinos. Despite being licenced by the MGA, they need to also be approved by the Government of Malta.
- Bingo Halls, or as locally known, Tombola Halls.
- Controlled Gaming Premises. This involves physical premises that intended to operate one or more gaming devices, excluding bingo halls and casinos.
- National Lottery in Malta. All the National Lottery games hosted in Malta are operated by Maltco Lotteries Limited.
Prior to starting the application process, the MGA advises to meet up with one of their senior executives, in order to determine, whether the project proposed is likely to be approved and discover all the information required to commence the process. This is likely to make the application process become much more efficient.
Gaming Licence Application Process
Firstly, the applicant has to submit all the documents required by the MGA. This can be done through the online portal of the MGA and once received, the MGA will carefully analyse all the information, to determine whether the applicant;
- It is fit and proper to receive a gaming licence and operate.
- Conducted research and is fully prepared from a business perspective.
- Has the correct instruments to carry out the business activity.
- Tested the proposed project in a technical environment, prior to going online.
Stage 1 – Fit & Proper Test
During this stage, the MGA carries out an exercise to determine whether the applicant is ‘fit and proper’ to conduct the gaming business desired. This is done by analysing all the documents and information related to the shareholders, key persons, project’s sustainability, and ultimate beneficial owners.
Furthermore, the MGA conducts reviews on the applicant with third party regulatory bodies and law enforcement agencies. The applicant’s experience, financial standing, and expertise are taken into account, with the aim to ensure, responsible gaming and safeguard the players and local reputation.
Stage 2 – Business Planning
At this stage, the applicant is assessed whether she or he is prepared from a business perspective and conducted the necessary research about establishing and operating the project. A detailed financial analysis is done on the business plan proposed. The business plan is expected to consist of;
- Forecast of project operation
- Marketing plans and procedures to implement
- Distribution strategies
- Objectives of the operation
- Sources of finance
- Company structure
- Nature of games offered
- Technology/devices used
Stage 3 – Operational and Statutory Requirements
During this stage, the applicant is required to submit a detailed memorandum consisting of all the business and technical features of the proposed project. Additionally, the MGA examined the applicant’s company incorporation documents, the games that will be offered on the platform or at premises, terms and conditions, privacy policies, procedures and any controls related to the gaming system.
Additionally, during this stage, the applicant is subject to authorise and issue minimum share capital, depending on the type of gaming licence class applying for.
The applicant is required to issue a minimum share capital accordingly;
Type 1 – Risked based games played against the house and the result is determined by a random generator. The applicant has to issue a minimum of 100,000 Euro share capital.
Type 2 - Risked based games played against the house and unlike type 1, the outcome is not generated randomly, but due to the result of an event and/or competition. An example of this is sports betting. The applicant has to issue a minimum of 100,000 Euro share capital.
Type 3 – Risked based games not played against the house. This includes games which outcome is dependant on the commission of the stakes or prize. In this type, the operator has no risks. The applicant has to issue a minimum of 40,000 Euro share capital.
Type 4 – Controlled skill games in which the operator has no involvement in the player management functions. The applicant has to issue a minimum of 40,000 Euro share capital.
If the applicant wishing to adopt more than one gaming type, minimum share capital of 240,000 Euro is required.
Stage 4 – System Review
Once the MGA approves the application and the three stages above are completed, the next stage consists of implementing the proposed project on a technical environment to test the platform and games before going online. The applicant has 60 days to complete this process and the will MGA audit the staged environment. Any recommendations will be communicated to enhance the project.
During these 60 days, the MGA has the right to request any additional information or an external system review, carried out by a trusted service provider, approved by the authority.
During this audit, procedures such as the following will be audited;
- Control system
- Backup Procedures in case of emergency
- List of duties
- Security of players
If everything is approved and accepted, the MGA grants the applicant a 10-year licence to operate.
Post Application Process
Stage 5 – Compliance Review
Once going online, the MGA requires the applicant, now a licencee, to undergo a series of compliance audits. Similar to the system review, this has to be done by a pre-authorised service provided. This licencee has the right to choose any of these service providers desired.
This has to be completed within 90 days from the MGA’s request. The MGA mandates audits to be carried out after the first (1st) year of operation, after being granted with the licence and any other audit required by the authority, during the year.
The licencee must adhere to the MGA’s audit requests.
Financial and Operational Activity Reporting
Key reports are required by the MGA, during the year, to ensure compliance with the regulations and assess gaming activity. These reports include;
- Yearly Audited Accounts. These have to be submitted within 180 days of the financial year of the new company. The financial statements of the company have to be provided, in accordance with the International Financial Reporting Standards. In addition, this has to include a director’s report.
- 6 Month Reports. On the 8th month of the company’s financial year, the management accounts for the first 6 months have to be submitted
- Monthly Reports. On a monthly basis, the licencee has to provide a player funds report and gaming tax report.