MGA proposes reforms to strengthen Malta as a leading iGaming hub
On July 12, 2017, the Malta Gaming Authority published a White Paper proposing major changes in the regulatory infrastructure of iGaming through a primary Parliamentary Act, known as the Gaming Act.
The main goal is to ease the process of issuing licences. Currently, there are many different licences a gaming company can obtain such as sports betting, online poker, bingo gaming companies, etc. However, these licences are within the scope of four major classes depending on the activities of the Malta iGaming company. So instead of having many licences, MGA proposes two licenses:
• B2C offering services to players, and
• B2B for companies offering services or platforms to other companies.
The reforms to Malta’s gaming legal framework are presently open for public consultation.
Major reforms by MGA to make Malta more competitive as a global leader in iGaming company formation
Some of the largest online betting companies in the gaming industry such as Betsson and Unibet are examples of Malta’s success and commitment to eliminating extra legislative regulatory weight whilst focusing efforts on areas which present a higher risk.
The main objective behind this reform is to filter all existing legislation into a singular primary Act of Parliament entitled the Gaming Act. Consequently, the Gaming Act would cover main areas of regulation as well as a number of directives and guidelines issued by the Malta Gaming Authority (MGA), as the single regulator of this sector.
The proposed regulatory framework will also strengthen the MGA’s ability to be more agile in its decision-making procedures, and reinforce the Authority’s key role in the fight against manipulation of sports competitions. By introducing new responsibilities on operators, MGA will bolster its effort to monitor sports betting and report suspicious bets, in line with the efforts being made by the National Anti-Corruption Task Force in which the Authority is already takes a proactive part.
At a recent press conference, the MGA Chairman, Joseph Cuschieri, said that the Authority has been involved in a series of discussions with the FIAU to implement the European Directive against Money-Laundering which is now also regulating remote gaming companies.
Some of the key benefits proposed are:
• Substituting the current multi-licence system with a newly updated system in which there will be two different types of licences:
– a Business-to-Consumer (B2C) licence and
– a Business-to-Business (B2B) licence;
• Enabling a better regulatory approach rather a bureaucratic prescriptive process;
• Expanding the regulatory scope of MGA to monitor illegal intervention;
• Raising the bar of responsibility within a gaming company, segmenting the Online Gaming Company Key Official role into a set of key functions within a licensed activity, such as
– Submit approvals for direct analysis and
– Supervisory control;
• Firming up the player protection framework by conceptualizing the mediatory role of the MGA’s Player Support Unit, protecting exclusion of player funds at law and moving towards a unified self-exclusion database across both remote and land-based delivery channels;
• Introducing an updated method for criminal and administrative justice, including the allocation of appeals from decisions of the Authority to the Administrative Review Tribunal and the introduction of a distinction between administrative and criminal offences;
• Introducing the concept of new settings (i.e. liquidating a company) which will better protect the online player and jobs within a company;
• Moving forward towards an automated system which will allow reporting and complying to regulatory obligations more effectively.
The proposed legislation would exempt B2B licensees from gaming tax
The Malta gaming operator may benefit from a favourable company tax regime applicable in Malta. One of the most used corporate vehicles to do business in Malta for the purposes of gaming activities is the Malta trading company.
Why a Malta trading company? The profits of a newly established Malta company (or a redomiciled company) is charged to tax at a rate of 35%. However, application of the Malta refund system combined with the full imputation system of Maltese tax typically results in an effective Malta tax rate of approximately 5%.
Malta has signed double taxation treaties with over 70 countries.
In addition, the proposed reform allows for the improvement of high quality consumer protection standards, responsible gaming actions, and a risk-based approach towards regulation.
Malta gaming company formation specialists
As Malta gaming company formation specialists, we can assist new or existing online gaming companies with corporate structuring, licensing and advice regarding Maltese and international income and value added tax implications of setting up and running an iGaming company in Malta.
For more information, please do not hesitate to contact us and we will be happy to guide you through the process of setting up a gaming company in Malta.