Malta at a glance: - Global Money



REMOTE GAMING LICENSING IN MALTA

Malta at a glance:

• Full member of the European Union since 1st May 2004, compliant with EU legislation;

• Political unanimity on acceptance and regulation of remote gaming;

• Advanced telecommunications infrastructure; most segments of fixed networks are fibre-optic with fully digitized transmission systems;

• The only EU Member State with the fully functional regulatory framework for remote gaming catering for all types of games including

betting roulette, blackjack betting exchanges

lotteries other casino-type games poker rooms

bingo gaming platforms tournaments

• Educated multi-lingual work force, reasonable HR costs and cost of living;

• Strong professional secrecy and confidentiality laws, imposing the obligation on confidentiality on lawyers, accountants, as well as regulators.

Types of period of validity of licences:

Classes of licences:

• Class 1: for games broadly based on repetitive random events (casino-type games, lotteries, etc)

• Class 2: for games based on a single event played through a market wet up by the operator (sport betting).

• Class 3: for betting and promoting games (P2P games, betting exchanges, tournaments, bingo, as well as intermediaries).

• Class 4: for hosting & managing games offered by other licensees, excluding the licensee himself (for gaming platforms from which gaming operators can run).

Duration of licences: A licence of any class is granted for the period of 5 years and may be renewed thereafter for a period of five years.

Licensing procedures

Licensing phase 1: The applicant provides to the Lotteries and Gaming Authority (LGA) detailed information about the proposed business and persons involved in the proposed operation. This information includes personal background of the promoters, financial information, participation in other commercial ventures, details of the proposed operation, business reputation, description of the system to be used for the gaming operation, and other information. The information submitted forms the basis of the due diligence process carried out by the LGA, evaluating the suitability of the applicant for the grant of the licence. Provided all necessary information is submitted, the first stage should normally be completed within 2 – 3 weeks (but sometimes takes longer).

Licensing phase 2: The ability to carry out operations and the gaming system are assessed. The system must be such as to ensure proper functioning of all games / betting procedures, system and application architecture, security and controls on the gaming operation, rules of the games, including accounting procedures, computer security of gaming transactions and other general procedures and standards used for recording transactions. This stage normally takes about 3 – 4 weeks and upon successful completion the applicant is issued with a provisional licence (so called Letter of Intent) which normally gives the right to the applicant to start live operations, provided that phase 3 is completed within the prescribed time.

Licensing phase 3: Certification of the control and gaming system is carried out. This should normally be completed within 6 months from the issue of the Letter of Intent. Normally, certification is carried out by a third party certifier. Certification does not involve source code testing, but focuses on checking procedures (loosely based on ISO17799 standard. Currently, the LGA, the Malta Standards Authority, the Malta Remote Gaming Council and other interested bodies are developing a specific remote gaming standard). Certified RNGs need not be retested, provided that the certificate includes details of their acceptable level of randomness. A prior approval must be obtained for any material change to the control / gaming system after certification.

Gaming licence fees

|Application fee: €2,300: a non-refundable fee payable on |Annual licence fee: the annual licence fee, for any class of |

|application. |licence, is €6,900 (NOTE: it is expected that under the revised |

| |Regulations, the licence fee for Class 4 licensee will be €4600 |

| |monthly). |

Gaming tax

On gaming: € 4,600 per month during the first 6 months after issue of the licence and the subsequently € 6, 900 per month for the entire duration of the licence period. However, in case where a casino operator (under Class 1 licence) operates from the host platform (under Class 4 licence):

∙ gaming tax payable by casino operator is €1,150 per month, and

∙ the gaming tax payable by the host platform is as follows:

• NO TAX for the first 6 months of operation;

• € 2,300 per month for the subsequent 6 months; and

• Thereafter € 4,600 per month.

On betting: 0.5% on the gross amount of bets accepted.

On commission-based games: 10% of the gross earnings (commission) (NOTE: it is proposed that this tax will be reduced to 5% of net revenue).

Tax capping for every licence: € 460,000 a year. Where Class 1 licensees operate under a Class 4 licensee, the tax cap is applicable to the total tax able by all licensees in this ‘cluster’ together.

Corporate tax

Corporate tax for companies in Malta is 35% on profit. However, if a gaming operator (which must establish a corporate entity in Malta) is set up as an International Trading Company (ITC), the shareholders of ITC who are not resident in Malta benefit from a substantial refund of the tax paid by the company, effectively reducing corporate tax to 5% on profit.

Location the online gaming and control system:

• A basic underlying requirement for operating a licence in Malta is to have the essential part of the online gaming system physically located in Malta. This means that the servers, on which gaming transaction take place, players’ data and ancillary information is stored and processed, must be situated in Malta.

• Under the proposed amendments of the Remote Gaming Regulations, licensee offering multi-player games will have a possibility, under certain circumstances, to locate their game servers outside Malta.

No statutory restrictions on offering services in specific jurisdiction:

• The remote gaming licence issued by the Malta’s Lotteries and Gaming Authority (LGA) is a licence to operate in cyberspace. Accordingly, neither the licence nor the Remote Gaming Regulations contain any provision restricting offering of remote gaming / betting services to certain jurisdictions or imposing an obligation on remote gaming operators to refrain from taking bets / stakes from particular jurisdiction. It is up to the corporate policy of every individual licensee to decide whether or not to impose any such restrictions.

Appointment of the Key Official

• Every licensee must appoint a person as its Key Official. The role of the Key Official is to personally oversee the remote gaming operations and to ensure and take responsibility for the licensee’s compliance with the applicable laws.

• Key Official must be resident in Malta. Under the proposed amendments of the remote Gaming Regulations, it will be possible to engage a third party ‘key official service’ when the Key Official of the licensee is abroad.

• Currently, Key Official must be appointed as a director of the company-licensee. This requirement is expected to be removed under the proposed amendments of the Regulations.

• Key Official must be approved for this position by the Lotteries and Gaming Authority and cannot terminate his duties until and unless is authorised to do so by the LGA.

Licensing of employees

• All employees of the licensee engaged in the office in Malta must be approved by the Gaming Authority.

• A licence may employ foreign employees to work in its online gaming office in Malta, subject to obtaining a permit to work in Malta, when applicable.

Rules with regard to players and their protection

• The law establishes the minimum information that the licensee must make available to players. Such information includes the rules relating to the authorised games offered by the licensee, as well as relative processing fees, if any; that may be incurred by the players. Moreover, the homepage of the licensee’s website should state the details of the licensee, the fact that it is licensed in Malta, and include a hyperlink to the site of the Gaming Authority.

• It is compulsory to register a player prior to allowing him to participate in an authorised game. Information that the licensee obtains from the player should include the player’s identity, age, and place of residence. It is prohibited to provide any loan or otherwise provide or allow any credit to any person for enabling such person to participate in any of the games that an operator offers.

• The Regulations place certain restrictions on dealings with players’ money and prescribe that players’ money must be kept separately from the funds of the licensee in a clients’ account held with a credit institution approved by the Authority. The licensee must ensure that funds in the clients’ account, including any funds in transit or in the process of clearance, are at least equal to the aggregate of the amount standing to the credit of players’ account held by the licensee. The licensee should have a possibility for a player to place a limit on the amount that player may wager over a specified period of time or on the amount of losses that the player may incur within a specified period of time. A licensee must be diligent with regards to the means of players’ payments. In particular, necessary procedures must be in place for ascertaining players’ credit card details and payment patterns. This also works to protect the operator from fraud.

• It must be possible for players to place limits on their play as self-restriction.

Anti-money laundering provisions

• It is one of the important regulatory goals to ensure a safe, and serious regulatory environment, to ensure that no money laundering occurs via gaming activities and to provide regulatory to minimize operators’ exposure to players’ fraud by establishing strict monitoring and compliance audits. The law imposes an obligation on any person to inform the supervisory authorities in case he suspects that a transaction is linked to money laundering.

• A complete accounting trail should always be available, and a gaming operator must provide the Authority, on a regular basis, with information showing a true and faithful situation of the business. Inspectors appointed by the Authority may request an operator to provide them with information or gaming devices for the purposes of investigations

Key official functions at a glance:

• Primary point of contact with the LGA;

• Director of the licensee company (this requirement is expected to be removed in the amended Remote Gaming Regulations shortly);

• Upholds the values and integrity of the licence;

• Resident in Malta – continuous point of contact;

Enhanced Value provided by Key Official Services:

• Fully compliant reporting and monitoring processes;

• Technical website monitoring using similar setup to LGA itself;

• Operational office satisfying LGA and MFSA requirements;

• Strong business and technical background brings advantages in the form of faster resolution of various problems that may occur during operations;

• Easier and faster certification process due to technical background and experience in the field;

• Assured reputation and integrity;

• Extensive network of contracts in relevant services and infrastructure industries;

• Truly independent and unbiased advice.

Key Official as the primary point of contact with the LGA:

• LGA recognizes only the Key Official as the liason with the licensee.

• Periodic reports needs to be presented by the Key Official (monthly reports, signing and presenting of interim and annual accounts, responding to queries and requests from the LGA);

• Exception reports need to be presented within the prescribed time limits (incident reports to be delivered within 24 hours, EU and NSO requests, notifying the Data Commissioner on Personal Data Transfers);

• Responsible for paying the gaming tax on time;

• Assists the LGA in the certification process and in any investigation;

• Obtains necessary approvals from the LGA on a case-by-case basis as the need arises.

Integrity of the License:

Key Official

• Ensures that all games are fair and correct and that the remote gaming system is well kept and maintained;

• Ensures compliance with Maltese laws and applicable EU directives at all times.

• Protects the image of the licensee;

• Must have access to company financial records and fulfills duties as a Director under the Government Act;

• Must have access to control system and have players’ account;

• Must be part of change management procedures and have direct access to the co-location provider where the licensee’s equipment is physically sited.

*******************************

................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download