MALTA
GAMING LICENSES: A COMPREHENSIVE GUIDE
Navigate the process of obtaining
MALTA
GAMING LICENSES
and recognition notices with ease.
CHALLENGES AND
CONSIDERATIONS:
- Understanding the complex requirements and processes can be daunting and time consuming.
- Navigating the licensing process can be complicated and overwhelming.
- Determining which Malta gaming license you need can be confusing.
- The potential need to acquire a recognition notice for a gaming entity licensed outside Malta may pose challenges.
WE PROVIDE A COMPREHENSIVE
GUIDE:
- Our dedicated team provides personalized guidance and assistance throughout the Malta gaming license application process.
- We help you determine the appropriate license type, whether B2B, B2C or both.
- Our experienced professionals assist in meeting ongoing reporting requirements and license maintenance obligations, saving you time and hassle.
- We simplify obtaining a recognition notice from the MGA for gaming entities licensed outside Malta.
The online gambling world is rapidly evolving, and Malta has emerged as a prominent hub for gaming companies seeking reliable regulation and a favorable business environment. The Malta Gaming Authority (MGA), at the forefront of regulatory advancements, plays a pivotal role in ensuring the integrity and fairness of the gaming industry.
The MGA's rigorous regulatory framework and commitment to industry growth and consumer protection have positioned Malta as a global gaming hub. As you navigate the intricate landscape of gaming licenses, ensure you align your business goals with the appropriate license type to unlock the benefits of Malta's thriving gaming industry. Contact us to initiate a personalized discussion about your Malta License application.
Only a few years before Malta joined the EU in 2004, the MGA had already started to regulate internet gambling. This meant Malta was the first EU Member State to endorse legislation on remote gambling. Malta has since been at the leading edge of regulatory developments in the online gambling industry. The MGA’s main priority has always been to create a stable and attractive regulatory environment, enabling the operator to adjust smoothly to this fast paced industry without losing focus on the consumers’ wellbeing.
In this guide, we delve into the specifics of obtaining a Malta gaming license, the associated costs, and the benefits of doing so.
The MGA offers two primary categories of licenses:
B2C
BUSINESS TO CONSUMER
= OPERATOR
B2B
BUSINESS TO BUSINESS
= SUPPLIER
The B2C license caters to operators directly engaging with players, while the B2B license is designed for gaming services and software suppliers. For those licensed outside of Malta, the MGA issues a recognition notice to extend similar rights to these entities as if they were licensed within the country.
For entrepreneurs aiming to provide games directly to players, the B2C license encompasses various game types. So, if you intend to offer gaming services directly to consumers or end users, such as operating an online casino, sportsbook, or poker platform, you would generally need a B2C license.
The different types of B2C licenses are categorized based on the kind of games offered:
- Type 1: €100,000 - Covers RNG-based casino games, online lotteries, and virtual sports games.
- Type 2: €100,000 - Encompasses fixed odds betting.
- Type 3: €40,000 - Includes poker rooms and peer-to-peer (P2P) gaming like poker, bingo, and betting exchanges.
- Type 4: €40,000 - Applies to controlled skill games where players can win prize money.
The licensing process necessitates adherence to detailed due diligence requirements, including identifying beneficial owners and their financial stability.
The B2B license, also known as the critical gaming supply license, focuses on supplying and managing core game elements and software or control systems. This license is essential for entities supplying gaming products and services to other licensed operators. So, if your company's primary focus is to provide gaming services and software to other businesses (operators, platforms, or other B2C license holders), you would typically require a B2B license.
Deciding between B2C and B2B licenses depends on your business activities. A B2C license suits those directly offering gaming services to individual players. On the other hand, a B2B license is apt for those providing gaming products and services to other licensed operators.
Companies engaging in both roles may require both licenses. For example, if you aim to provide gaming services to other operators (B2B) while also operating your gaming platform or website for individual consumers (B2C).
If your company wants to use the software you developed, it will also need to apply for a B2B license; however:
- If it holds the B2B license in the same company as the B2C license (i.e., a corporate group license), it could only offer its games to entities within its structure.
- If it also wants to sell its games/software to external parties, it must obtain the B2B license in a separate company from the one holding the B2C license.
Considering the above, we recommend that if you want to obtain a B2B and a B2C license, you should incorporate two separate companies for them so you also be able to offer your software to external clients.
Be aware that licensing requirements can vary depending on specific activities and circumstances. Please contact us for a personalized discussion regarding your particular situation and needs. This will enable us to offer customized advice based on your unique business model, target markets, and regulatory considerations. We can effectively guide you through the licensing process by assessing your requirements accurately.
Our dedicated team assists entrepreneurs in obtaining licenses while ensuring compliance with local substance, legal, and financial requirements.
In addition to helping you incorporate a Malta (EU based) company, which is necessary for license application, our lawyers and accountants can manage the license application process, opening bank and merchant accounts, preparing annual financial statements, drafting employment agreements, and more. We can provide experienced staff for your Malta operation to fulfill the local requirements known as Key Functions.
The MGA license application process involves several phases: application submission, verification, and systems review. Generally, the process is quite similar for B2B and B2C applications, with the B2B having fewer or different requirements.
Required documentation encompasses detailed business plans, anti-money laundering (AML) procedures, technical setup policies, and more. The MGA's thorough due diligence process aims to ensure applicants' legitimacy and financial stability.
We will inform you of the application forms to be submitted to the MGA and assist you in completing these.
We will then start requesting all the required documents, policies, and procedures from you, such as:
- Business plan
- AML/CFT & onboarding procedures
- Sports betting integrity (if applicable)
- Responsible gaming procedures
- Technical set-up and policies
- Terms and conditions
The MGA will also want to see all contracts with business partners, such as the cloud/server partners, game and software provision partners, and anything directly influencing the company's operations to be licensed.
The process is quite extensive regarding the due diligence documentation required by MGA. It requires identifying all Beneficial Owners (BOs) holding directly or indirectly 10% or more ownership in the company.
Some of the documents required would be to identify the good standing of the individual (police conduct, bank or professional reference of a character nature), as well as the financial stability of the applicant (supporting documentation proving the source of wealth), showing the individual/s is/are capable of maintaining a licensed MGA entity. Similar documentation (excluding the source of wealth documents) is required for anyone with either a management position (director/s) or a Key Function position.
After submitting all the required documentation to the MGA, they will commence their review process. During this phase, it is common for the MGA to provide additional ad hoc queries to seek further clarification or request other documentation on a case-by-case basis. These queries aim to ensure a thorough application understanding and meet specific requirements.
After the MGA has completed its review of the documentation, it will issue a request to implement the technical/IT aspects on the website(s) within 60 days.
Once your technical team has implemented it, an external and MGA approved auditor will need to conduct a systems audit.
The MGA needs this to have confirmation that all processes indicated in the companies’ policies are correctly implemented.
Once this has been achieved, the MGA proceeds with a final review and grants or refuses the license to the operator.
The license will be valid for ten years unless the operator does not comply with their ongoing obligations.
Once licensed, companies must fulfill ongoing reporting requirements. Key Function holders, responsible for specific aspects of the gaming business, play a pivotal role in license maintenance. These roles are essential for ensuring compliance and effective management within the regulatory framework. External auditors review systems and processes to validate compliance.
Over the years, we have realized that licensed entities do not always have a team with sufficient knowledge to handle the MGA’s reporting requirements.
This is where we can assist, as we have a wide range of professionals from various disciplines who can support your team in fulfilling these ongoing requests.
The advantage? You pay one fee, monthly or yearly, and get the experience and expertise of a dedicated team of individuals. Our team is constantly in close correspondence with the MGA and scrutinizing any new development in the industry to ensure your business is always on top of its game.
In Malta, most reporting requirements, or license maintenance requirements, are arranged through the key function roles.
A key function is an essential position for which only individuals can be appointed.
In other words, they are the main responsible person(s) for a specific aspect of the gaming business in a licensed company. These individuals are also the persons the MGA will contact depending on the topic (legal issues to legal affairs key function holder, player's complaints to compliance officer, etc.).
To provide essential services as key function holders to a licensed entity, individuals must undergo a vetting process by the MGA and obtain a certificate of approval. Whether operating or planning to operate under an MGA license, B2B and B2C companies are required to appoint specific key function officials responsible for various roles and responsibilities.
For B2C licensed entities, eight roles must be fulfilled, while for B2B licensed companies, this number is seven. Sometimes, an individual may be appointed to multiple key functions if there are no conflicts between roles (such as compliance-oriented roles conflicting with business-based ones).
We can also serve as key function holders upon request from the licensee, provided specific requirements are met.
Entities licensed outside Malta can benefit from recognition notices issued by the MGA. These notices extend equivalent rights to foreign license holders, allowing them to serve Maltese licensed entities and players without needing additional Key Function appointments. Recognition notices are subject to annual renewal and streamline the cross-border gaming operations of foreign license holders.
The MGA looks at the jurisdiction where the existing license is issued and recognizes most European Union (EU) and European Economic Area (EEA) countries as offering safeguards that align with the MGA’s requirements. They also look on a case-by-case basis at states outside the EU/EEA and may approve a recognition notice if they deem the level of control and protection equivalent to those enforced in Malta.
The UKGC license, for example, is currently still recognized by the MGA; hence, UKGC license holders may apply for a recognition notice from the MGA. This is however subject to confirmation as, since Brexit, the MGA has evaluated accepting UKGC license holders for recognition notices on a yearly basis.
If an applicant with a foreign license obtains the recognition notice from the MGA, they can service Maltese licensed entities and players. A recognition notice does not require the licensed entity to appoint Key Function officials contrarily to an MGA license.
We can make the process for the application straightforward for you.
To receive the recognition notice from the MGA should take between 6 weeks and two months.
The MGA application costs €5,000 and should be renewed yearly.
ARE YOU READY TO APPLY FOR YOUR MALTA LICENSE?
to discuss your specific needs.
