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Michael J Zammit, managing partner at CSB Malta, explains why gaming a license in the jurisdiction is a straightforward and rewarding move

The gaming industry keeps evolving and in this market, as in most industries, each operator is always on the lookout for competitive, convenient, well-regulated and reputable jurisdictions. What may be beneficial for one operator may not be interesting to another, and the present licensing arrangement may not be optimal given the prevailing business climate.

Not only is it important for operators to be able to have the required licensing arrangements in place to allow them to conduct their activities, it is also crucial that market developments are closely monitored to identify potential opportunities for the development of business to keep abreast of competition. Failing to keep up-to-date with the current market conditions could put you at risk, which could prove to be a costly mistake.

Why Malta?

Due to Malta's reputation as a well-regulated jurisdiction, the island’s convenient location, competitive tax regime, a network of double taxation agreements, combined with technical experience, a multilingual population using English as the business language, advanced telecommunication systems, and competitive costs for management, administration, salaries and rent, place Malta at the forefront and give us that added advantage over other jurisdictions. Following Malta's entry in the European Union in May 2004, we now stand out as among the leading egaming jurisdictions in Europe.

Malta offers various advantages as an ecommerce business partner and it is an ideal location for ebusinesses wishing to operate in a cost-effective environment. The island complements all the related products or services that are required for an egaming operation: banking, epayment and merchant accounts, legal. Accounting and audit services, fiduciary (nominee) services, data centers (ISPs), recruitment services and secretarial services. These all compare well with international i standards.
Over the past years Malta has 1 successfully established itself as a serious ( and well-regulated European jurisdiction I attracting egaming companies. The Malta I Lotteries & Gaming Authority’s (LGKs) Remote Gaming Regulations categories games in four classes as follows:

  • Class 1: Casino-style games, lotteries. Slots
  • Class 2: Sports betting
  • Class 3: Peer-to-peer (P2P), betting exchanges, skins. tournaments, bingo
  • Class 4: Software vendors who take a commission on wagers.

Once an application for a licence is submitted and obligations are fulfilled.  A Malta company is incorporated and a licence is issued in the name of the Malta Company. An application may be processed and approved within five to eight weeks. The LGA seeks reputable promoters of good standing. The Maltese government has the objective of providing regulations that are competitive, safe for players, serious and, more importantly, not unnecessarily bureaucratic, ensuring vigorous protection for users of remote gaming that fits with Malta's established and reputable financial services sector.
International trading company
The unique feature of the international trading company (ITC) is its onshore status, and once the shareholders are non-resident, interesting tax benefits apply, effectively reducing the applicable tax rate to 4.17%. Although the mechanics of the ITC regime are expected to undergo some changes which should come into effect at the beginning of 2007, the fiscal incentives are expected to be retained to attract further international business and investment.
CSB offers a ‘one-stop shop’ service and we pride ourselves on providing clients with a professional, efficient and personalized service. We realize clients have individual requirements and it has always been our policy to provide a service that is tailor-made to each individual, both initially and on an ongoing basis. We will help our clients through the application process from start to finish. If needed we can also organize meetings with the Malta LGA, banks, internet service providers and any other service providers that may be required.

Image matters
     
In this competitive world a high-quality e brand image is essential for a successful business as players will increasingly’ be looking for secure sites operated e in a respectable and well-regulated jurisdiction. Malta has proven to be a leading European gaming hub in the past years and future prospects look bright. Today more than 140 companies, including the top players in the industry, hold licenses issued by the LGA.

Domicile Overview

Location     : Southern tip of Spain, Europe
Population :  27,833
Languages :  English  (official purpose), Spanish, Italian, Portuguese
Timezone   :  GMT +1 hour

Operation issues

What AML requirements does the domicile have?
      Gibraltar asks for a business plan, details of company officials and proven expertise.  The Criminal Justice Ordinance 1995 obliges the financial institutions engaged in the business activities to establish and maintain certain procedures and programmers to enable them to identify and report suspected money laundering and generally prevent their businesses and systems being used for the purposes of money laundering.

What physical presence do operators need on the island?
      The customer services, management, host of operations must all be located in Gibraltar.

Do local banks process online gaming transactions?
      Specific payment services are available in the jurisdiction.

Does the domicile allow the repatriation of profits?
      No, the licensee agrees on the letter of intent that the company’s affairs will be ring-fenced in Gibraltar.  They are not permitted to transfer any funds out of Gibraltar.
Licensed firm include

  • PartyGaming
  • 32Red Online Casino
  • 888.com
  • Ladbrokes
  • Eurobet
  • Stan James
  • Mansion

Telecoms
      The main telecoms provider in Gibraltar is Gibtelecom, which is a joint venture between the government of Gibraltar and Verizon, one of the world’s largest telecoms companies.
      The domicle has a state-of-the-art telecoms infrastructure, with a fibre-optic network and a full range of digital, satellite, mobile and Internet communications services.

Key data

When did the jurisdiction begin licensing egaming sites?
      1998

What type of license does it award?
      Gibraltar offers gaming licenses for sports bookmaking, online casinos and betting exchanges.

What are the requirements for each license type?
      A licensee agreement requires a proven track record.  The company must be licensed in a reputable jurisdiction and have a good financial standing.

Does the domicile require software testing /licensing?
      Yes.

What physical presence is needed?
      There is no need for the presence of staff.  For systems. It is required that at the minimum, the gambling transaction server be hosted in either.  Alderney or Guernsey.

What the ongoing regulatory requirements?
      It is in the agreement that the company must produce any documentation for review as and when it is requested.  It must provide annual audited accounts.  A new gambling ordinance requires all operators to display an underage warning and a link to at least one gambling problem assistance site.

What are the start-up application fees?
      None

 

What are the recurring licensing fees?
      The annual fee is £ 2,000 (US $ 3,700).

What is the tax rate?
      1% turnover for online sportsbook, online casinos pay 1% of the drop (gross profit).

Contact details
     
Office of the Financial and Development Secretary Treasury Building
23 John Mackintosh Square, Gibraltar
Tel: +350 51167
Fax: +350 79901
Email: financialsec@gibtelecom.net