Index Gambling License

Gambling License Belize - Gambling License Isle of Man -Gambling License Costa Rica- Gambling License England

Gambling Licences and BASIC CONSIDERATIONS FOR SERVICE PROVIDERS

Our law firm - i.e. the network partners of the Low Tax Network - form companies with gambling licenses on the Isle of Man, Malta, Gibraltar, England and other countries (for example: Belize, Antigua, Barbuda, Costa Rica, Kahnawake) for our clients, … key to the realization of an online gambling offering (online casino, online betting, lottery, sports betting, the company offers services itself or as a reseller). We welcome the opportunity to provide these services to companies who provide gambling software. We provide consulting in the selection of the seat country and the required license, as an additional service within the scope of the "tax planning" (seat country and/or "affiliated companies").

Gambling License Malta- Remote Gaming in Malta

Over the past years Malta has successfully established itself as a leading, serious and well-regulated European remote gaming jurisdiction and is estimated to host around 10% of the world’s on line gaming companies. The Government of Malta had carried out a complete revision and consolidation of the gaming legislation, and a new all-encompassing gaming law was enacted by the Maltese Parliament in virtue of which the Malta Lotteries and Gaming Authority (LGA) has been set up.

Gibraltar, Alderney and the Isle of man are other popular jurisdictions in Europe for licensing of remote gaming operations, however, Malta is the only jurisdiction that is an EU member state and thus the only country that in essence offers the possibility of “free movement of goods and services” within the huge EU market. In fact, according to May 2008 information prepared by the Lotteries and Gaming Authority around 95% of remote gaming operators come from Europe.

CSB Group offers a “one-stop-shop” service to Online Gaming Operators by assisting Clients in setting up / re-locating their Gaming Operation to Malta. CSB Group has been involved in the iGaming Industry since its inception in Malta, since 2000. CSB Group assists clients in submitting and pursuing a Gaming License application to the Malta LGA. Prior to submitting a Gaming License Application we will review the application and make sure all the required paperwork is in order. We will liaise with the LGA and keep our client updated of the progress of their application. We realise that clients have individual requirements and it is our policy to provide a service that is tailor made to each Client, both initially and on an ongoing basis year after year.

Gambling License Malta: The Malta Remote Gaming Regulations: Lotteries & Gaming Authority (LGA)

Over the past years Malta has successfully established itself as a serious and well-regulated European jurisdiction attracting on-line gaming companies. The Government of Malta carried out a complete revision and consolidation of the gaming legislation, and a new all-encompassing gaming law was enacted by the Maltese Parliament in virtue of which the Malta Lotteries and Gaming Authority (LGA) has been set up.

The Malta Lotteries and Gaming Authority has revised the regulations whereby Gaming activities including online casinos, casino-style games, online poker, betting exchanges and lotteries could be allowed after an application is submitted and a licence is granted.

Remote Gaming was originally introduced in Malta under the Department of the Public Lotto Act in 2000 which then only permitted licensing of Betting activities. The then Regulations for Offshore Betting Offices attracted more than 60 companies between 2000 and 2004, and during this period 42 companies operated successfully.

The Malta Remote Gaming Regulations came into force on the 20th April 2004. The new Regulations are established under the main Act as Other Games by Means of Distance Communication, this means that:

the gaming principles are the same as those of the principal act that requires parliament intervention to change;
the regulations are under the control of the Authority and can be changed by way of a simple legal notice.

Gambling License Malta: New Regulations - New Concepts

Technology Neutral – Apply to all types of technologies (internet, mobile, telephone, fax and game devices).
Game Neutral – Apply to all types of games (Betting, P2P, Online Casino, Community Games, Leagues, etc..)
Future Proof (as much as practicable).
Shift from regulating games to regulating the means of carrying out gaming.
Establishes a safe environment for players.
Gives operators a competitive edge.

Key Official Requirement and Support

A Key Official would need to be appointed within 21 days from issue of the LOI.

Following find a list of responsibilities that need to be adhered to by the Companies' Key Official (KO):

System review / Certification of compliance.
Sealing of Servers and also responsible to make sure seals are not broken, and if so must be reported to the LGA and re-sealed.
Incident reports - the LGA is to be advised in respect of any changes made to either the hardware or software of the company, by signing and submitting the Incident reports.
Keeping the LGA updated in respect of any changes to be made, to the set-up approved by LGA.
Submission of monthly gaming tax and annual gaming license fee.
Submission of the Company's Accounts / Audit.
Ensuring players' funds are adequately held by the Company at all times.
Data Protection.
NSO - National Statistics.
KO is to have access to the back-end system.

Further, the Key Official together with the Management of the Company needs to ensure that the Company is operating in line with the following Malta regulations:

Companies Act, 1995
Data Protection Act, 2001
Electronic Commerce Act, 2001
Electronic Communications (Regulation) Act, 1997
Income Tax Act, 1948
Income Tax Management Act, 1994
Lotteries and other games Act, 2001 as amended (Remote Gaming Regulations)
Prevention of Money Laundering Act, 1994

Gambling License Malta: Classes of Remote Gaming Licences

Remote Gaming Regulations are based on a simple principle: Any concept using a means of electronic communication in which, one or more players pay to participate to win a prize, is licensable. The Remote Gaming Regulations categorises these concepts under four different types of Classes of Licenses

Class 1 Remote Gaming Licence – applies for operators who offer games which are based on repetitive events and the gaming risk is managed by the operator. This type of license covers casino table style games, lotteries and slots. Since the licensee bears the full risk of the gaming activities conducted, the winnings are therefore guaranteed by it.

Class 1 on 4 Remote Gaming License - shall be an online gaming license for all types of games of chance and games of skill operating on an existing Class 4 licensee.

Class 2 Remote Gaming Licence – the license covers operators who manage risk based on a singular event using markets. This license covers the traditional fixed odds betting and some forms of pool betting.

Class 3 Remote Gaming Licence – this license is for operators who organise player to player games but they do not partake in the risk and receive only a commission. This license is suitable for betting exchange providers, pools and poker rooms.

Class 3 on 4 Remote Gaming Licence - shall be a licence to promote and abet gaming from Malta. For operators who promote or abet gaming from Malta on an existing Class 4 licensee.

Class 4 Remote Gaming Licence – this license is for software vendors who intend to host and manage remote gaming operators having any class of the above. They cannot partake in the gaming risk and can only receive a commission.

Gambling License Malta: Gaming Tax & License Fees

Licensing fee applicable by the Malta Gaming Commission (Lotteries and Gaming Authority - LGA):

Processing fee (non-refundable) in respect of an application - Eur2,330
Annual license fee in respect of class 1, class 2 and class 3 - Eur7,000 per class / license. The annual license fee for class 4 is nil for the first 6 months, Eur2,300 per month for the next 6 months (month 7 to 12) and Eur4,600 from month 13 onwards.
The annual licence fee is to be paid within fifteen days from the formal granting of licence and repeated annually accordingly.

Gaming tax applicable by the Malta Lotteries & Gaming Authority:

Gaming Tax for Class 1 (online gaming) - Standalone is Eur7,000 per month. Gaming Tax for Class 1 on 4 is Eur1,200 per month.
Gaming Tax for Class 2 (online betting) - A sum equivalent to half of one per centum (0.5%) on the gross amount of bets accepted in online betting operations.
Gaming Tax for Class 3 is 5% on net income which is defined as the net revenue less direct costs: bonuses, commissions and payment processing fees (eCommerce Fees)
The Gaming Tax for Class 4 – no gaming tax (inherits tax of its sub-licensees).

In the case of Classes 2, 3 and 4 licenses, the total maximum amount of tax payable per annum by one licensee in respect of any one license shall not exceed Eur466,000. In the case of Class 3 on 4, tax will be paid proportionally depending on the number of licensees operating on the Class 4 gaming platform

Gambling License Malta: Application Process and Support

Prior to granting a remote gaming licence, the Lotteries and Gaming Authority applies a rigorous application process which is made up of 3 Stages.

Stage 1 - In this stage, the Authority examines all the information provided. The LGA will conduct a fit and proper exercise on the Applicant, including the evaluation and analyses of all information related to persons involved in managing and financing the business, and will carry out a financial analysis of the business plan. Applicants must demonstrate a business and technical ability to carry out the operation and must demonstrate that the operation is covered by sufficient reserves or securities to ensure player winnings and deposit returns.

The business plan should outline in detail the following:

The objectives of the operation;
The proposed company structure including business functions and human resources to be employed (e.g. risk managers, odds compiler, financial officers, etc.);
The nature of games to be offered (e.g. betting, pool betting, betting exchange, casino, poker, leagues, etc);
The technologies to be used to conduct remote gaming (e.g. Internet, telephone, fax, mobile, etc);
An overview of the application software to be used as gaming and control systems;
A three-year business plan including:

1. Marketing and sales plan;

2. Forecast balance sheets;

3. A financing plan showing sources of finance, distinguishing between shareholder funds and other funds. (Such as venture capital, bank guarantees, etc.)

Besides completing the necessary LGA application forms, the following information / documents in respect of each shareholder and key management personnel need to be submitted to the LGA:

Birth certificate
Passport copy
Passport size photo
A conduct certificate, or a relevant document, issued by a law enforcing authority in the country of origin of the applicant.
Statement of Affairs
Credit and/or financial references including a professional recommendation.
A signed Resume / CV.
Existing Gaming License (if applicable).

All documents are to be certified a true copy by a Lawyer or Public Notary using his/her seal or stamp.

The above “KYC” (Know Your Customer) documents are also required by CSB to enter into a professional working relationship as part of our due diligence procedures.

Under normal circumstances (and if all documentation is found to be in order) the first stage is completed within 3 / 4 weeks (circa).

Stage 2 - After successfully completing Stage 1 of the application process, the LGA shall inform the Applicant to proceed to Stage 2. At this stage, the following documents are to be submitted to the LGA:

Incorporation Documents - A Maltese Company Registration Certificate, Memorandum and Articles of Association and the LGA’s Business Entity Information Form.
A detailed Operational Manual outlining the application & system architecture of the gaming and control systems, the software developer, security and control procedures, back-up and disaster recovery procedures, and the rules, terms, conditions and procedures of the games, and the respective online text.
The Payment methods, payment system/s and its provider/s.
Agreements with business partners, affiliates and/or agents.

The duration of Stage 2 is generally completed within 3 / 4 weeks (circa), depending on the correctness and completeness of the information submitted to the LGA.

Stage 3 - Following Stage 2, a temporary licence to operate remote gaming is granted to the Malta Company with the intent of obtaining certification of compliance for the operation based on the standard ISO / IEC17799:2000 within six months. Further to the necessary certification, the applicant must appoint a Key Official within 21 days of the Letter of Intent being issued, conclude necessary testing as well as conclude all the required agreements in respect of the hosting of servers / associated equipment and the office lease agreement. Once completed, the Applicant is issued with the official gaming license.

Requirements for Certification:

Server protocols, communication protocols and other specifications which are part of the gaming system architecture;
Gaming risk management procedures;
IT security risk management procedures and internal control of the system;
Modules that affect processes, rules and parameters of the game if the source code is changed;
Detailed description of the set-up and functionality of the application architecture and system architecture.

Control System

A system of internal controls, administrative and accounting procedures for the conduct of a remote gaming office;
Technically this includes all the subcomponents of the system where the player is in the “secure area”, login module included.
The RNG is part of the control system.
The applicant is required to submit a written document outlining the control system functionality and specifications for the approval by the LGA and update if there are any changes.

The control system is to be located in Malta and a Gaming License is granted once the control system has been issued the certification of compliance.

Gaming System

A system by means of which remote gaming is conducted, and shall include all its associated components, its operating systems and application software;
Technically this includes all the sub components of the system which provide the games, including gaming devices where applicable.