Malta, officially known as the Republic of Malta, is a small island country and is considered part of Southern Europe. Malta has been a member of the EU since 2004 and, as such, follows the directives imposed by the Union. Many gambling aficionados are well acquainted with Malta, as it is one of the most prominent gambling licensing authorities in the iGaming sector.
Many refer to Malta as a tax haven, which is another reason numerous gambling businesses choose to apply for licenses from the Maltese authorities. As far as the gambling scene in Malta goes, in 1922 the country implemented the Lotto Act, the first law to legalize a form of gambling on the island.
In the following years, several laws were enacted, with the Gaming Act being the main law governing gambling activities in Malta. Over the years, the Gaming Act has been amended several times to improve industry regulation. One of the most important regulatory changes came into effect in 2004, when Malta legalized online gambling.
Under the Gaming Act, operators must obtain a license from the Malta Gaming Authority (MGA) to conduct gambling activities. Due to favorable tax rates, Malta has become one of the world’s gambling hubs, with the MGA licensing about 10% of online gambling operators worldwide.
History of Gambling in Malta
Gambling has been part of Malta’s history for many years, with games like Cippitatu being popular long before the country passed any gambling laws. The first piece of legislation regulating gambling in Malta was the Lotto Act, implemented in 1922. This law legalized the game of Lotto, which was the first form of gambling legally conducted in Malta. Over the next 100 years, the Maltese government passed several other laws, setting an example for other countries trying to regulate gambling.
In 2001, the Lottery Gaming Authority (LGA) was established as Malta’s regulatory board, overseeing most gambling activities in the country. Later, the authority was renamed the Malta Gaming Authority (MGA), and regulating and licensing gambling businesses in Malta has remained the MGA’s responsibility to this day.
In 2004, Malta became the first country in the EU to introduce a legal framework that would regulate online gambling. Thanks to this new law, online gaming operators had a set of rules to follow to legally provide remote gambling services. The MGA issues remote gambling licenses and oversees the operations of online gambling license holders.
As the iGaming industry grew over the next decade, Malta’s legal framework proved very successful. Many operators opted for an MGA license, finding Maltese laws relatively easy to comply with.
In 2018, the Gaming Act was passed, introducing new regulations for Malta’s gambling industry. It is currently the main piece of legislation governing almost all gambling activities in the country.
Over the years, Malta has become one of the top jurisdictions for gambling regulation, with many major gambling companies choosing to locate their headquarters there. In addition, the world’s largest gaming event, the Summit of iGaming in Malta (SIGMA), was launched here.
Gambling Regulations in Malta
Almost any form of gambling has been legalized in Malta, and the country is also a pioneer in legalizing and regulating online gambling. As mentioned above, the Gaming Act of 2018 is the main piece of legislation that governs the gambling sector in Malta. Under this law, operators are required to apply for a license from the Malta Gaming Authority whenever they wish to conduct gambling activities within the country.
The law uses the term “gaming” to cover all gambling activities regulated by the Gaming Act. According to this legislation, any activity that involves participating in games of chance or skill, offering a gaming activity, or organizing a gaming service falls under the definition of gaming.
According to the Gaming Act, there are four types of gambling that are legal in Malta:
- Type 1: Games of chance where the outcome is random and players compete against the house (casino games)
- Type 2: Games of chance, skill, and betting where the outcome is not entirely random because it is determined by the result of a future event or competition; operators manage their own risk levels by setting the odds offered to bettors (sports betting)
- Type 3: Games of chance that are not played against the house, and the operator assumes no risk but earns a profit by charging a participation fee or commission (poker tournaments)
- Type 4: Controlled games of skill where the results are determined by aggregated statistical performance (betting on fantasy sports)
An operator is considered to provide a “gaming service” when a game is made available to players as a means of economic activity. Meanwhile, the law defines “gaming supply” as the provision of gaming goods or services, whether directly or indirectly, with the supply being either material gaming or ancillary gaming but never a key function.
While Malta has legalized both land-based and online gambling, the way the two types of activities are licensed is slightly different. Operators who wish to conduct land-based gambling must apply for a permit to operate gaming devices at the respective land-based gaming venue and also secure approval for the premises where the devices will be located.
Under the Gaming Act, those who fail to comply with the regulations face several penalties. Offenses listed in the Third Schedule include providing or supplying gambling services without proper authorization, participating in or assisting such supply, and failing to meet legal obligations or make the required payments to the Authority. Anyone who violates the Third Schedule may be fined between €10,000 and €500,000, imprisoned for up to five years, or both.
Alternative penalties may include a fine of up to €500,000 for each case of infringement or €5,000 for every day of infringement. The MGA may also seize gaming machines, other gaming devices, and money related to any of the offenses mentioned above.
In addition to the Gaming Act, Malta complies with regulations imposed by the EU. As a member of the Union, Malta follows the EU gambling directives stipulated in Article 56 of the TFEU and Directive 2015/1535/EC.
The legal gambling age in Malta is 18+, but locals cannot enter land-based casinos until they are 25 or older. Because this restriction does not apply to tourists, brick-and-mortar casinos mainly target foreign players rather than Maltese citizens.
Land-Based Casinos in Malta
Other Forms of Legal Gambling in MaltaOnline Gambling in Malta
When it comes to online gambling, Malta has set an example for other countries looking to regulate the industry. In 2004, Malta became the first EU country to legalize online gambling, introducing a legal framework for the regulation of the remote gambling sector.
Operators who wish to run online casinos or sportsbooks are required to obtain a license from the MGA. In fact, Malta is known as one of the world’s gambling hubs, with the MGA licensing about 10% of online gambling operators worldwide. While the MGA once licensed numerous operators, in recent years it has become more selective and often licenses only larger companies.
The online casino industry in Malta is well developed and extremely important to the country. It employs thousands of people and generates significant revenue through taxes.
While the MGA has licensed a large number of online casinos, none of them accept players from Malta. This is mainly due to the significantly higher taxes levied on Maltese players. While numerous gambling companies operate under licenses issued by the MGA, they target players in other EU countries rather than offering services to Maltese players. Despite its small size, Malta is a major gambling hub thanks to its low tax rates, and numerous companies have established their headquarters there.
With so many operators to oversee, the MGA’s ability to properly govern its license holders has significantly declined. In recent years, the MGA has been criticized for alleged involvement in shady practices and for purportedly allowing mafia organizations to launder large sums of money through online gambling in Malta.
The MGA has denied the allegations, and no proof has yet been found that the regulator was involved in criminal online gambling activities. Nevertheless, the MGA’s reputation has been damaged, and this may force many companies to leave the Maltese gambling sector.
Gambling Regulator and Licensing in Malta
Gambling operators in Malta must apply for a license from the Malta Gaming Authority (MGA), formerly the Lottery Gaming Authority (LGA). Established in 2001, the MGA regulates gambling activities and oversees how licensed operators conduct different forms of gambling.
The MGA issues licenses for both online and land-based gambling activities, covering both B2C and B2B services. The responsibilities of the MGA include preventing criminal activity related to gaming, ensuring a safe and fair gambling environment for players, and protecting minors and vulnerable people. The regulator also offers assistance to operators applying for licenses, protects players’ funds and deposits, oversees licensees’ operations, and ensures the randomness and fairness of all games of chance.
Despite recent scandals, the MGA remains one of the most respected licensing bodies in the global iGaming scene. The MGA is present on the whitelist of the UK Gambling Commission, meaning that online casinos licensed in Malta are among the few non-UK gaming sites that can still accept British players.
MGA license fees are set by the Gaming License Fees Regulations of 2017. Licensed operators must pay an annual license fee and a compliance contribution tax, both of which depend on the type of gambling activity offered. The fixed annual license fee for a B2C-only gaming license by the MGA is €25,000. If the license is issued only for Type 4 gambling, the annual license fee is €10,000.
The license fee for a B2B-only gaming license is €25,000 for annual revenue below €5 million, or €30,000 for annual revenue over €5 million but below €10 million. If the annual revenue exceeds €10 million, the annual license fee is €35,000. If the B2B license is issued solely for Type 4 gaming supply, the annual fee is €10,000. For a B2B license for the supply and management of software, an annual fee of €3,000 applies if annual revenue is below €1 million. If the annual revenue exceeds that amount, the annual license fee amounts to €5,000.
Gambling Related Taxes in Malta
As already mentioned, one reason so many gambling businesses choose Malta is its favorable tax regime. The tax rates that apply to gambling in Malta are determined by the Gaming Tax Regulations Act. A 5% gaming tax is levied on gaming revenue generated from Maltese players.
As previously covered, in addition to an annual license fee, licensed gambling operators must also pay a compliance contribution tax. Malta uses a progressive taxation model, but unlike most systems, its rates decrease as revenue increases. The tax base for the gambling tax in Malta is the gaming revenue generated in a single year. The tax rates depend on the type of gambling the operator conducts.
| B2C Type 1 Gambling Compliance Contribution (Between €15,000 and €375,000) | |
|---|---|
| Compliance Contribution per Financial Year | Rate |
| For every euro of the initial €3,000,000 | 1.25% |
| For every euro of the following €4,500,000 | 1% |
| For every euro of the following €5,000,000 | 0.85% |
| For every euro of the following €7,500,000 | 0.70% |
| For every euro of the following €10,000,000 | 0.55% |
| For every euro of the remainder | 0.40% |
| B2C Type 2 Gambling Compliance Contribution (Between €25,000 and €600,000) | |
|---|---|
| Compliance Contribution per Financial Year | Rate |
| For every euro of the initial €3,000,000 | 4% |
| For every euro of the following €4,500,000 | 3% |
| For every euro of the following €5,000,000 | 2% |
| For every euro of the following €7,500,000 | 1% |
| For every euro of the following €10,000,000 | 0.80% |
| For every euro of the following €10,000,000 | 0.60% |
| For every euro of the remainder | 0.40% |
| B2C Type 3 Gambling Compliance Contribution (Between €25,000 and €500,000) | |
|---|---|
| Compliance Contribution per Financial Year | Rate |
| For every euro of the initial €2,000,000 | 4% |
| For every euro of the following €3,000,000 | 3% |
| For every euro of the following €5,000,000 | 2% |
| For every euro of the following €5,000,000 | 1% |
| For every euro of the following €5,000,000 | 0.80% |
| For every euro of the following €10,000,000 | 0.60% |
| For every euro of the remainder | 0.40% |
| B2C Type 4 Gambling Compliance Contribution (Between €5,000 and €500,000) | |
|---|---|
| Compliance Contribution per Financial Year | Rate |
| For every euro of the initial €2,000,000 | 0.50% |
| For every euro of the following €3,000,000 | 0.75% |
| For every euro of the following €5,000,000 | 1% |
| For every euro of the following €5,000,000 | 1.25% |
| For every euro of the following €5,000,000 | 1.50% |
| For every euro of the following €10,000,000 | 1.75% |
| For every euro of the remainder | 2% |
Closing Thoughts
Gambling was legalized in Malta in 1922 with the enactment of the Lotto Act, which authorized the distribution of the game. In the years since, Malta’s legal framework has undergone several changes to keep pace with the evolving gambling industry. Gambling is currently governed by the Gaming Act of 2018.
The regulatory body in Malta is the Malta Gaming Authority (MGA), which also licenses both land-based and online gambling services. Although the country has only four land-based casinos, it boasts a large number of online casino operators. After becoming the first EU country to regulate and legalize online gambling, Malta quickly became one of the world’s gambling hubs.
The MGA has licensed over 10% of the virtual casinos in the world, with many operators choosing to be based in Malta due to its friendly tax rates. Despite its prominence as a gambling center, Malta mainly caters to tourists and non-Maltese online players. Although the legal gambling age is 18, this limit applies only to foreign tourists; Maltese residents must be at least 25 to enter these venues. Meanwhile, online casinos licensed by the MGA do not accept players based in Malta, offering their services only to players from other EU countries.