Gambling license in Malta

Benefits of a Malta Gambling License

Obtaining a Malta gambling license offers numerous advantages for an iGaming business:

• Prestige & Credibility: Malta is regarded as a gold-standard jurisdiction in online gambling. The biggest and most famous iGaming brands are licensed in Malta, which instantly lends credibility to new licensees. Operating under MGA oversight signals to players and partners that the business meets high regulatory and fairness standards.
• Reliability & EU Regulation: The MGA is known as a strict and serious European regulator. Malta has a long track record as a well-regulated jurisdiction, providing stability and robust player protection. As part of the EU, Malta’s regime aligns with EU laws (e.g. anti-money laundering directives, data protection via GDPR), which means an MGA license is recognized for its rigor. The jurisdiction’s reputation can open doors to many markets and easier trust from customers.
• Access to Banking and Payment Systems: A Malta license makes it much easier to obtain bank accounts, payment processing, and merchant services for gambling, compared to unlicensed operations. Banks and payment providers often prefer or require that an online gambling business is licensed in a reputable jurisdiction. With an MGA license, companies find that major payment processors, credit card networks, and electronic wallet services are willing to work with them, and often on more favorable terms (lower risk premiums, etc.).
• Broad Spectrum of Games (Functional Flexibility): The Maltese license covers a large number of game types under one regulatory framework. This means an operator can run a full-suite iGaming platform – casino, sportsbook, poker, bingo, etc. – all with the same license (just by specifying the types). This functional breadth allows businesses to expand into new gambling verticals without needing a completely separate license each time, reducing administrative burden.
• Favorable Tax Structure: Malta offers an attractive fiscal regime for gaming companies. While the headline corporate tax is 35%, the effective tax can be as low as 5% for distribution of profits to non-Malta residents due to Malta’s tax credit system. There is also no withholding tax on dividends to non-residents. This makes Malta very cost-efficient in terms of net profits, especially compared to jurisdictions with higher effective taxes. Additionally, VAT exemptions on gaming revenue mean consumer costs aren’t increased by tax.
• Long-Term License & Stability: MGA licenses are issued for 10-year terms (longer than many other jurisdictions which might have annual renewals or 5-year terms). They are readily renewable for another 10 years thereafter. This long validity provides regulatory stability – operators can invest in their business with a long horizon in Malta without worrying about constant relicensing. The MGA regime itself is stable, having been refined over two decades, which reduces the risk of sudden regulatory changes.
• Market Access and Recognition: Being based in Malta allows operators to base their operations in an EU member state, benefiting from EU freedoms (at least historically, services could be offered across borders until local regimes took over). MGA’s international standing is high: for example, Malta was whitelisted by the UK (meaning advertising in the UK was permitted for MGA licensees), and Malta has bilateral understandings with other regulators to facilitate operations. While today many countries have local licensing, an MGA license is still a strong umbrella license for accessing unregulated markets and is seen as a mark of quality in regulated ones.
• Robust iGaming Ecosystem: Malta as a jurisdiction has a huge ecosystem of iGaming companies, service providers, and talent. By licensing and basing operations in Malta, companies gain access to experienced workforce, legal and financial services specialized in gaming, industry events, and networks of other operators and suppliers. The island’s iGaming hub status means being in Malta is practical for business development and partnerships. The MGA’s presence also means regulators are nearby and communication can be direct.

Disadvantages and Considerations

While highly respected, the Malta gambling license comes with some challenges and drawbacks that applicants should consider:

• High Initial and Ongoing Costs: Compared to some other jurisdictions (e.g., Curaçao), Malta is relatively expensive. The capital requirement is substantial (€240k for B2C) and must be paid-up capital in the company. Application and license fees (e.g. €5k upfront, €25k annual) are significant. Additionally, the compliance contributions and gaming taxes can be heavy for successful operators (scaling up to hundreds of thousands of euros annually at the high end). These financial barriers mean a strong upfront investment is needed. Even post-launch, running costs include maintaining a Malta office, paying local staff, annual audits, and possibly engaging service providers – all of which add up.
• Lengthy and Complex Licensing Process: Obtaining an MGA license is not a fast process. The due diligence is rigorous – including thorough background checks (fit and proper test), detailed business plan reviews, and technical audits. The entire process can take close to a year to complete, unlike some jurisdictions where licensing is quicker. Applicants must prepare extensive documentation and often go through several rounds of queries from MGA. The required System Audit and Compliance Audit during the application stage also add complexity (and cost) before you can fully launch. This lengthy timeline might delay a business’s go-to-market plan.
• Strict Regulatory Requirements: Malta’s high standards mean strict requirements must be continuously met. For example, you must have a Malta-resident director and key officials, a real presence in Malta, and a team of at least 4 qualified personnel in key roles. The MGA will verify the qualifications and integrity of all these individuals. All key persons need to pass exams/certification for their roles. The company must implement robust AML/KYC procedures, player protection measures, and IT security controls from day one. These obligations can be demanding, especially for smaller startups, and failing to meet them can result in delays or denial of the license.
• Significant Compliance Burden: Operating under MGA means ongoing compliance and scrutiny. Licensees have to generate regular compliance reports, undergo annual financial audits, and be prepared for random MGA inspections. Non-compliance has serious consequences – the MGA actively enforces its rules, issuing warnings, fines, and even suspending licenses if breaches occur. For example, licenses have been suspended for failing to protect player funds or for AML shortcomings. Keeping up with regulatory updates, mandatory responsible gambling initiatives, and reporting requirements requires dedicated compliance staff and resources. This is a cost in both time and money and requires a compliance-focused company culture.
• Limited Market Scope (Local Regulations): An MGA license is not a universal passport for all markets. Many countries have introduced their own local licenses (for instance, UK, Germany, Italy, France, etc.), meaning an MGA license alone does not authorize targeting players in those countries. Operators with Malta licenses often still need to block or restrict players from jurisdictions that demand local licensing. Thus, while Malta is superb for globally unregulated markets and as a sign of quality, it may not replace the need for additional licenses in certain key markets. This can complicate an operator’s expansion strategy.
• Operational Complexity: Running an MGA-licensed operation can be complex. The requirement to maintain infrastructure that complies with MGA standards (e.g., certified random number generators, disaster recovery arrangements, data retention policies) and possibly hosting part of the systems in Malta or allowing MGA connectivity can introduce technical overhead. There are also Key Function Certificates and training that management must undertake, which can be burdensome to arrange and pass. Overall, the bureaucracy and paperwork associated with compliance can be seen as a disadvantage for those used to more lenient regimes.

Despite these challenges, many companies accept them given the benefits of Malta’s jurisdiction. The costs and strictness are the trade-off for high credibility and access. Prospective applicants should weigh these disadvantages and ensure they have the resources and commitment to meet Malta’s standards before proceeding.

License Types and Classes in Detail

Malta’s licensing regime is organized into B2C license types for operators and B2B license classes for suppliers, as introduced earlier. Below is a more detailed look at each type/class, including the specifics of what activities they cover and any particular requirements:

B2C License Types (Gaming Service License)

When applying for a Business-to-Consumer license, an operator must specify which Type(s) of gaming service they will provide. The MGA defines four types, covering the full range of gambling products:

• Type 1 – Casino & Lotteries (RNG Games): This type covers casino-style games of chance against the house where outcomes rely on a random number generator. It includes online slots, table games like blackjack, roulette, house-banked card games, and also lotteries or games with guaranteed prize pools. If you plan to run an online casino or lottery betting site, you will be operating under a Type 1 license. Share capital requirement: €100,000 paid-up for the company. Type 1 licensees also pay a gaming tax of €4,660/month (first 6 months) then €7,000/month thereafter, plus compliance contributions based on revenue (min €15k up to €375k).
• Type 2 – Sports Betting (Fixed-Odds Betting): Type 2 is for fixed-odds betting where players bet on the outcome of events. This includes sports betting, e-sports betting, and other event betting (like betting on the outcome of a political election or other non-sport events), provided the operator is taking risk (acting as bookmaker). Essentially all bookmaking operations fall under Type 2. Share capital requirement: €100,000 (same as Type 1). Gaming tax for Type 2 is 0.5% of the gross amount of bets accepted (turnover). The compliance contribution for Type 2 ranges higher (min €25k up to €600k for the largest operators) given typically higher volumes.
• Type 3 – Peer-to-Peer Games (Rake-based): This type encompasses games where the operator is not a party to the bet but earns revenue through commissions or fees. It includes online poker rooms, poker networks, betting exchanges, bingo, peer-to-peer lotteries, and other pool betting or game networks. For example, an online poker site where players play against each other and the house takes a rake would be Type 3. Share capital requirement: €40,000 (lower, reflecting the generally lower risk nature of commission-based models). Gaming tax is 5% of real income (commission) for Type 3 operations. Compliance contribution ranges from €25k to €500k based on revenue tier.
• Type 4 – Controlled Skill Games: Introduced later in MGA’s regime, Type 4 covers games of skill with prizes that have an element of chance. The prime example is fantasy sports (where skill in selecting teams influences outcome, but chance still plays a role in how real games unfold). Other skilled tournaments or certain skill-based competitive games for money could fall here, if approved by MGA as controlled skill games. Share capital requirement: €40,000. Gaming tax for Type 4 is staged: none for first 6 months, then €2,330 per month for the next 6 months, and €4,660 per month thereafter. The compliance contribution for Type 4 ranges from €5k up to €500k based on revenue. Type 4 is somewhat niche – not all skill games are regulated by MGA, only those it designates as having sufficient chance element to require oversight.

It’s important to note that an operator may offer multiple types of games. Under the post-2018 rules, an operator can hold a single B2C license covering multiple types (rather than needing separate licenses for each). In such cases, the total share capital requirement is cumulative up to the capped €240,000 – e.g. if offering Type 1 and Type 2, €200k capital is needed; if Type 1, 2, and 3, that would sum to €240k (not €240k + 40k) since the cap is reached; offering all four types still requires €240k (cap) rather than €280k). The operator would also be subject to the respective tax for each vertical and must pay each annual license fee (though the MGA often consolidates these into one license certificate with specified approved types).

In practice, many online casinos also add a sports betting product, meaning they operate under Type 1 and 2 concurrently, etc. The MGA’s framework makes it streamlined to extend your service categories as long as you meet the requirements for each type.

B2B License Classes (Critical Gaming Supply License)

For Business-to-Business providers, Malta offers the Critical Gaming Supply license, which demonstrates that the holder is a vetted, reliable supplier in the gambling industry. This license has two classes:

• Class 1 B2B – Gaming Supply (Equipment & Content): This class is for providers of game content or critical gaming equipment to licensed operators. If a company develops casino games, lottery systems, or betting software that constitute the material gameplay elements, a Class 1 license covers that business model. For example, a slot game studio or a live casino provider would be Class 1. It also covers the management and provision of essential gaming systems (like a platform that directly manages game play or outcomes). Share capital requirement: €40,000 (a relatively low threshold, and it is not additive if multiple classes held – 40k total is enough). The annual license fee for Class 1 B2B is scaled by revenue: €25,000/year if the B2B’s annual revenue is under €5 million; €30,000 if revenue is €5–10 million; €35,000 if revenue exceeds €10 million. (Notably, since 2021 Malta has offered incentives to B2B licensees such as lower fees, to attract more suppliers to the island.)
• Class 2 B2B – Software Supply & Support Services: This class covers businesses that provide software that is ancillary to gaming operations or act as intermediaries, but are not providing the games themselves. This could include companies offering iGaming platforms, back-office systems, data middleware, player account management systems, affiliate platforms, or other software tools for the industry. Essentially, if your product is a gaming software solution that collects, manages, or processes gaming data or documentation but is not the game outcome itself, it falls under Class 2. Share capital requirement: €40,000 (same as Class 1, and one capital covers both if a company has both classes). The annual license fee for Class 2 is much lower: €3,000/year if annual revenue is up to €1 million, or €5,000/year if revenue exceeds €1 million. This reflects that many software suppliers are smaller or support companies.

Many large iGaming technology providers hold both Class 1 and Class 2 licenses, as their services can span both content provision and software systems. Holding a Malta B2B license is beneficial because MGA-licensed B2C operators can then use that supplier’s services without needing each game or system individually certified from scratch (the supplier itself is licensed, which streamlines compliance integration). It is also a mark of quality that can be marketed to potential clients.

It’s worth noting that B2B licensees are exempt from gaming tax and do not have the compliance contribution that B2C operators pay. Malta has even implemented strategies to encourage B2B businesses, given their importance in the gaming ecosystem.

Requirements for Obtaining a Malta License

Malta imposes a comprehensive set of requirements and prerequisites on license applicants to ensure only suitable and well-prepared operators are licensed. Below is a summary of key requirements an applicant must fulfill:

1. Fit and Proper Persons: All significant individuals involved (owners, directors, key persons) must have clean backgrounds. The MGA will reject applicants with criminal records or those on international sanctions lists. Thorough due diligence (including police conduct certificates and financial probity checks) is conducted. The Ultimate Beneficial Owners (UBOs) behind the company are especially scrutinized for integrity and source of funds.
2. Corporate Structure: The gambling operation must be conducted via a Malta-registered company. Malta allows a single-shareholder company (one person or entity can own 100%). Corporate shareholders are allowed, but every UBO with ≥10% ownership will undergo MGA’s approval. The company’s constitutional documents must align with MGA requirements (e.g. including gaming in its business objectives).
3. Minimum Share Capital: Applicants must inject a minimum paid-up share capital into the company. For a B2C gaming service license, the required capital depends on the game type(s) but cumulatively must reach at least €240,000 for a full scope operation. (Typically €100k per Type 1 or 2, and €40k per Type 3 or 4, capped at €240k total as noted.) For a B2B license, the company must have at least €40,000 in share capital. The capital must be evidenced (deposited in the company bank account) and maintained; it represents a financial buffer for the business.
4. Local Presence (Office and Director): While not always explicitly mandated by law, in practice the company is expected to have a real presence in Malta. The MGA strongly recommends a physical office in Malta as headquarters, and for B2B licensees it is effectively required. At least one of the directors must be resident in Malta. This director should be a qualified individual who can act as an interface with the regulator. The local office requirement ensures the company can be effectively supervised and has substance (especially important for tax residency and EU substance requirements).
5. Key Personnel & Staffing: The applicant needs to appoint key function holders covering critical roles in the operation. Malta requires a minimum of 4 distinct roles to be filled: a CEO/Director (responsible for overall management), an MLRO (Money Laundering Reporting Officer, responsible for AML compliance and also often handling risk and security), a Data Protection and Compliance officer (covering legal compliance, GDPR, maybe also a CFO type tasks), and an Internal Auditor (who ensures internal controls and audits are done independently). These individuals must be named in the application. One person can cover multiple roles if suitably qualified, but at least 3 separate persons are typically needed (for example, a single director might also serve as CEO and one other function, but you would still need others for the remaining functions). Each key person will need to submit a Personal Declaration Form and pass probity checks. The MGA ensures they have the necessary experience and qualifications for their role.
6. Key Function Certificates: All the designated key persons are required to obtain MGA certification for key functions. This usually means they must complete a course or evaluation (for example, courses in anti-money laundering for MLROs, etc.) and the MGA will issue a Key Function Certificate to each, indicating they are approved to carry out that function. This process often happens parallel to the license application. Budgeting for training or certification fees is necessary (the cost in the project plans is roughly a few thousand euros for all certificates).
7. Financial Robustness: Beyond share capital, the applicant must demonstrate it has the financial means to sustain the operation. This is done through a detailed business plan and financial projections (typically 3-year projections must be submitted). The MGA will evaluate if the projections are realistic and if the company will remain solvent. Additionally, the company will need to secure insurance (e.g. professional indemnity or other coverages as required by MGA) and set up client bank accounts as described next.
8. Segregated Player Accounts: Prior to license issuance, the company must have at least two bank accounts in place: one for operational funds and one designated for player funds. The player funds account holds all customer balances and must be separate to protect players’ money from any company liabilities. The MGA will verify these accounts during the process (letters from the bank may be required). Often, opening these accounts requires the company to already be incorporated and may require interim approval from MGA to get a bank on board; however, MGA expects evidence that accounts are in progress or opened by the time of final license decision.
9. Comprehensive Documentation: The application must be accompanied by a large set of documents and information. Key documents include: Business Plan, detailed Operating Manuals/Policies (covering areas like AML procedures, Responsible Gaming policy, Terms and Conditions for players, internal procedures, IT security policy, etc.), Game information (the list of games, how they are certified, who supplies them), System Architecture description (detailing the platform, random number generator certifications, security measures, etc.), and financial information (source of funds declarations, 3-year financial forecasts). Personal documents for each director/shareholder are extensive: certified passport copies, proof of address, police conduct certificates, CVs, bank references, and source of wealth declarations. If any shareholder is a company, that company’s corporate docs (certificates, registers, etc.) must be provided too. The completeness and accuracy of this documentation are crucial – any shortfall will delay the process as MGA will come back with queries.
10. Application and Regulatory Fees: A one-time application fee of €5,000 must be paid upon submission of the license application. Additionally, the applicant should be prepared to pay the first year’s license fee once the license is ready to be issued (e.g. €25,000 for a B2C license type, which is then paid annually). Proof of payment of fees is usually a condition for final approval.
11. Systems Audit & Compliance Audit: As part of the licensing process, the MGA requires a newly licensed operator to undergo a System Audit (also called an System Review) by an independent MGA-approved auditor. This typically occurs after the in-principle approval but before the license is officially made operational. The audit verifies that the operator’s technical setup – games, platform, security, procedures – is in line with what was described in the application and meets MGA standards. The cost of a systems audit is borne by the applicant and can range roughly €3,500–€7,500 depending on complexity (and number of games). Furthermore, within the first year of operation, a compliance audit is usually required (and periodically thereafter) to ensure the operator is adhering to all license conditions; the cost of a compliance audit is about €6,000. These audits must be passed – if issues are found, the MGA may require fixes or could suspend the license.
12. Experience (Desirable): While not a strict requirement, it’s noted that if the UBO or management has significant prior experience in the gambling industry (e.g. 5+ years), the MGA tends to view the application more favorably. Experienced operators may navigate the process more smoothly. Lack of experience isn’t disqualifying, but MGA might impose stricter scrutiny or require hiring of advisors with the requisite experience.

Costs and Taxes for Malta Licensees

Operating under an MGA license entails several layers of costs: one-time fees, recurring regulatory fees, taxes on gaming revenue, and general corporate taxes. Below is a breakdown of the key costs and taxes:

• Government Fees:
  • Application Fee: €5,000 (non-refundable) paid to the MGA when applying. This covers the Authority’s processing of the application.
  • Annual License Fee: Paid to MGA upon license issuance and every year. For B2C operators, the fee is €25,000 per year for each Type 1, 2 or 3 license and €10,000 for a Type 4. In practice, if an operator holds multiple game types, these fees may be aggregated into one license fee invoice (e.g. offering Type 1 and 2 might incur €50k/year). For B2B providers, the annual fee is tiered by revenue: €25k–€35k for Class 1 B2B, €3k–€5k for Class 2 B2B, as detailed earlier.
  • Compliance Contribution: This is an annual variable fee (essentially a revenue-based levy) for B2C licensees. It is calculated on the gross gaming revenue bands per license type. To recap the ranges: Type 1 operators pay from €15,000 up to €375,000 annually; Type 2 from €25,000 up to €600,000; Type 3 from €25,000 up to €500,000; Type 4 from €5,000 up to €500,000. The exact amount is determined by the MGA based on the operator’s audited revenue for the year. For example, a small Type 1 casino with modest revenue might owe €15k, whereas a very large casino could hit the €375k cap. These contributions effectively replace what used to be the old “gaming tax” for remote gaming (aside from the separate Gaming Tax described below).
  • Gaming Tax: Distinct from the compliance contribution, Malta imposes a gaming tax payable to the government consolidated fund, calculated differently for each game type (as per the Gaming Tax Regulations). The current rates are:
    • Type 1: €4,660 per month for the first 6 months of operations, then €7,000 per month thereafter.
    • Type 2: 0.5% of the total bets accepted (on sports/event betting). Essentially, half a percent of turnover.
    • Type 3: 5% of real income (which means gross gaming revenue or commission income).
    • Type 4: No gaming tax for the initial 6 months; €2,330 per month for months 7–12; and €4,660 per month from the second year onward.
      These taxes are usually reported and payable monthly. Notably, if an operator holds multiple licenses, the gaming tax is capped at €116,000 per month across all licenses, to avoid infinite liability (this cap corresponds to the 20 license rule as per MGA guidelines). B2B licensees do not pay any gaming tax because they are not operating games for players.
  • Key Function Fees: There may be minor fees associated with obtaining key function certificates or approvals (for instance, the MGA might charge for processing Personal Declaration Forms or issuing certificates). In practice, these are usually a few hundred euros per person or included in service packages. The example project costs indicated around €3,200–€5,380 for obtaining 8 Key Function certificates via service providers, but this likely includes training/service fees, not just MGA fees.
• Service Provider and Professional Fees: While not MGA fees, it’s relevant to mention that many applicants incur costs for legal and consulting assistance. This can include Malta company incorporation (a few thousand euros), drafting of policies, and compliance consulting, which often runs in the tens of thousands of euros (as seen in example roadmaps where total service packages exceed €50k). These are one-time or project-based costs but should be budgeted by the applicant.
• Operational Costs in Malta: Maintaining the license requires maintaining the Malta business. This includes annual company renewal fees (~€2,500+ for corporate services like company secretary, registered office), local director remuneration, office rent, and staff salaries. These costs are part of doing business in Malta’s environment.
• Corporate Income Tax: All Malta companies are subject to the standard 35% corporate tax on profits. However, as noted, if structured properly with non-resident shareholders, the effective tax can drop to 5% after claiming the Malta tax refund. The way this works is: the company pays 35% on its net profit to the tax authorities, but when it distributes dividends to its foreign parent/owners, those owners can claim a 6/7th refund of the tax paid. This results in a net tax burden of 5% (since 6/7 of 35% is returned). Many gaming companies in Malta use this approach, often setting up a holding company structure to facilitate it. It requires some administrative steps (applying for the refund which is usually paid out within months after year-end). If the shareholders are Maltese residents or if profits are kept in the company, the full 35% might apply, but most international operators optimize for 5%. It’s important to engage a Maltese accountant or tax advisor to handle this correctly.
• VAT (Value Added Tax): Most revenue of a gambling operator (bets, gaming revenue) is exempt from VAT in Malta, meaning the operator does not charge VAT on bets or gaming transactions. Consequently, the operator cannot usually reclaim input VAT on many expenses. However, certain B2B services (like selling software to an operator) could be subject to VAT if both parties are in Malta. In practice, many B2B transactions are cross-border and fall outside Maltese VAT, or the supplier can use the reverse charge mechanism. Also, if a Malta gaming company provides other services (non-gambling) to players or sells merchandise, those might attract VAT. For pure play online gambling operations, VAT is generally not a major factor aside from compliance (filing nil returns if applicable). The standard VAT rate is 18%.
• Other Taxes/Fees: There are no withholding taxes on dividends to non-residents (so profit repatriation is tax-free after corporate tax). Malta also typically has no customs duties or other indirect taxes that affect online services. Gaming companies might have to contribute to things like the Responsible Gaming Fund in some cases (if mandated by MGA as part of social responsibility, but often the compliance contributions cover this). If a company hires employees in Malta, those employees’ salaries are subject to income tax and social security like any other employment (this is not a direct company tax but part of operating costs).

Licensing Process: Step-by-Step Roadmap

Obtaining a Malta gambling license is a multi-stage process that can span several months. Below is a step-by-step roadmap of the typical licensing journey, from initial setup to final license issuance, along with approximate timelines: