- July 31, 2020
- Posted by: Carlos Ferreira
- Categories: Economics, Finance & accounting, International
Online gaming license, Malta or Gibraltar ?
Malta and Gibraltar are countries that have multiple advantages for you and/or your businesses as we have mentioned them before in this blog. In addition to having one of the most temperate climates in Europe for its geographical positions, a high quality of life, security, political-economic stability and investment opportunities. Both have a stable government that has developed a reliable economic system based on various industries such as financial services, tourism, port logistics or licencing for the development of online gambling as is the case today.
In 1998, Malta became one of the first countries to introduce licences and regulations online gambling. However, it was not until 2004 that Malta joined the EU and became a benchmark for the industry. As a result, Malta was able to attract the attention of the main companies in the online gambling sector operating in the different EU member states.
A year later in 2005, Gibraltar implemented a legislation similar to Malta’s, but more flexible in certain aspects. With this, they managed to gain some prominence, also becoming home to large multinationals of online gambling. Another aspect that helped Gibraltar was recognition by the Gambling Act’s, which further strengthened its development and expansion globally.
In both cases, companies that opted for Malta or Gibraltar made large investments in human resources, which generated great job creation and the emergence of a new industry that helped further diversify both economies. By obtaining one or the other licences, bookmakers and casinos managed to pass on greater legal protection to their potential customers. This situation was reflected by the increase of new customers. The operators with the Maltese licenses focused more on the European countries, while those with the Gibraltarian licence opted for the British market. As a result, Malta and Gibraltar became leading licencing institutions.
But let’s briefly consider who grants the licences.
Malta has granted more than 200 gaming licences. This market contributes more than €1.2 million to the island economy according to estimates, representing more than 10% of its GDP. In addition, as we said earlier, it generates a significant volume of jobs in the country, which is very favourable for the country’s economy and diversifies. The online gaming industry requires a skilled labour force to support the millions of players distributed around the world.
In 2004, Malta approved the regulations called the Remote Gaming Regulations with which the island country attracted even more sports betting operators and casinos. With this new law in place, operators could offer even more services at a distance, therefore creating the well-known poker tables or international tournaments that would involve players from any country in the world.
Due to high external demand, in 2004 the country created the Malta Gaming Authority (MGA). With its constitution, an institution was established that offered a legal and technological framework for the safe and reliable granting of all kinds of online gaming licences.
In the case of Gibraltar, the body responsible for issuing and controlling all operators is the Licencing Authority, a specific department of HM Government of Gibraltar, which, like its Maltese homologous, controls, regulates and manages the same legal-administrative aspects.
Online gaming is the sector that has grown the most in recent years thanks to the internet usage growth, which has generated a “robust” business for both countries. Gibraltar has granted more than 150 licences according to public data, thus becoming one of the benchmarks in the licencing. This industry has become an important economic pillar for the Rock, representing about 40% of GDP.
The advantages offered to Gibraltarians over those registered in the United Kingdom were altered in 2014, when the Licencing and Advertising Act was amended. This amendment required all bookmakers based in Gibraltar or other territories to pay a 15% tax on profits obtained from UK customers, thus removing companies based in Gibraltar and other low-tax territories part of their competitive advantage.
From 2006 onwards, the online gaming business has experienced steady and sustained growth over time, becoming an important industry in both countries. The main operators of the big gaming and betting houses, as well as the developers of technologies for them, are in a constant modernisation. That is why both labour markets require a skilled labour force such as software developers, communication experts, social media and digital marketing, graphic designers, computer security experts, risk management experts etc. Whether you are a professional who is in one of these professions or similar, Malta or Gibraltar are certainly a great alternative to your professional or business future.
What are the advantages of online gaming licencing in Malta and Gibraltar?
The AMS promotes responsible gambling in a safe environment, free from criminal activities that can lead to fraud that results in money laundering or become a source of terrorist financing. Therefore, there are rigorous compliance controls when accepting licences and at the same time customers in those companies.
It is the institution itself, which manages user complaints and ensures that the operator complies with its responsibility, such as compliance with the privacy regulations of player information, guaranteeing funds among many others. All this, providing impartiality that transmits confidence to both parties. At any time, the player or interested person may ask for the status of his complaint free of charge or whether the operator has an online license in the AMS.
Like its Maltese homologous, the Licencing Authority of Gibraltar promotes and regulates the interaction between the two parties for fair play, ensuring safety in multiple aspects to the player. Also, to avoid the malpractice of operators and illicit activities. In turn, it also manages and regulates all types of complaints on behalf of the players.
Obtaining an online gaming license in Gibraltar or Malta acquires advantages for both operators and the players as we will see below:
1. The gaming license of both countries allows the online casino operator to work in almost all EU countries and the world, giving it an international character. In those countries where there is already a regulation of the game, both licenses lose validity, as can be the case in Spain, UK…. Even today, many EU countries do not have specific rules to regulate the sector, which remains very favourable for Gibraltar and Malta due to the breadth of European and non-European countries.
2. Corporate taxes on online gambling activity are relatively low in both jurisdictions. The registration of the licence is about €4000, plus the commissions for the completion of the audit of the system (which is mandatory) and the annual maintenance fee. In addition, a fee for the renewal of the license must be covered every 5 years.
3. Fast registration procedures. The licence is valid for 5 years, renewable for the same period. Both regulatory institutions continuously monitor the activity of individual operators with systematic controls.
4. Protection of the data and information that is transmitted between the server and the system user. Total legal-administrative protection for the client.
5. Ease of deposit and security at withdrawal of payment. Payment methods must be diverse, from e-wallets, prepaid cards or common banking methods, such as credit cards, debit cards or bank transfers. Limits should be variable and user availability oriented, so that everyone can have the online casino experience.
As we said at the beginning, the advantages also extend to the player offering permanent protection that manifests itself in fair play, avoiding fraud, quota manipulation, the protection of invested funds up to a certain amount and the responsibility of the game operator. The Maltese and Gibraltarian authorities regularly inspect quota systems in the case of dictation of fraud, rigged systems and their operation is improper, avoiding traps and manipulations against the player.
What type of license does the AMS grant?
Currently, there are 4 different types of licences in Malta, depending on the purpose of the operator:
- Class 1: includes all kinds of casino games, lotteries and skill activities in general, such as slot machines, bingo and table games.
- Class 2: includes sports betting rooms.
- Class 3: includes activities that establish interaction between a group of players such as poker, lotteries, bingo and other collective online games.
- Class 4: special for vendors and software developers.
What type of license does the Licencing Authority grant?
There are currently 4 types of licences in Gibraltar:
- Betting Intermediary Licence and Bookmaker’s Licence: For sports betting.
- Gambling Machine Licence: Focused on gaming machines such as slots and casinos.
- Remote Gambling Licence: For bets and remote games such as poker tables and others.
Differences between the two licences?
There’s no better option than the other. Both countries offer great administrative, fiscal advantages and an attractive labour market with skilled labour.
Perhaps the most differentiating aspect between the two licenses is whether they belong to the EU. In the case of Gibraltar, as we all know the #Brexit has been reached on 31/01/20 and the clauses of this agreement is being negotiated until the end of the current year. It remains to be seen what the future of the Rock will be, whether it will be bound by AGREEMENT to the EU or not. Malta, for its part, has been a European territory since 2004, which, in the face of the #Brexit situation, gives it greater stability.
As a curious fact, it should be noted that there are casino operators and bookmakers operating under the Maltese and/or Gibraltarian licence in other countries outside the EU as is the case in Canada and are accepted and validated by the Canadian government.
Therefore, if you have an online business related to these activities described above or you are a professional who wants to move to Gibraltar or Malta, we advise you to contact us for more information on the extensive administrative and tax advantages of your next destination.