Online Gaming

Online Gaming

In 2011, Malta’s thriving online gaming industry had peaked and now continues to thrive. Despite its relatively small size, Malta plays host to the biggest number of gaming firms in the EU and was dubbed as Europe’s gambling hub, attracting hundreds of online gaming companies with its favourable taxation regime. Its share of revenue from gaming, in particular the gambling industry, amounted to 7.82 percent of its GDP.  

Gaming companies are well aware of the importance of a trustworthy and reliable jurisdiction and of having a reputable licence. Many have questioned why Malta, despite being one of the smallest countries in the EU, managed to harness the biggest registrar of online gambling companies in the union. The EU Commission itself noted that the reasons why Malta has attained such a significant success in this field and managed to distinguish itself from much larger competitor countries is partly due to its attractive tax system, but also due to its good, functioning regulatory system which manages to maintain a liberal approach when regulating, thus creating the most agreeable environment and legal framework within which companies can work and thrive.

Malta Online Gaming Licence

Prospective online gaming companies investing in the online gaming industry in Malta will need to apply for an iGaming licence in the class of licence covering the types of games to be offered. An applicant may apply for either or any of the different classes of licenses to suit the different types of services different companies want to provide:

  • Class 1 – operators managing their own risk on repetitive games (casino-type games, skill games and online lotteries)
  • Class 2 – operators managing their own risk on events based on a matchbook (fixed odds betting, pool betting and spread betting)
  • Class 3 – operators promoting and abetting gaming from Malta & taking a commission from promoting and/or abetting games (P2P, poker networks, betting exchange and game portals).
  • Class 4 - a licence to host and manage remote gaming operators, excluding the licensee himself that is, operating as a platform.
  • Class 1 on 4 – operators managing their own risk on repetitive games (e.g. casino-type games, skill games and online lotteries) operating on a third party platform duly licensed by the Lotteries and Gaming Authority.
  • Class 3 on 4 – operators promoting and abetting from Malta & taking a commission from promoting and/or abetting games (P2P, poker networks, betting exchange and game portals) operating on a third party platform duly licensed by the Lotteries and Gaming Authority.

Each class refers to typical games offered online. They are not game or technology specific, thus encompass any kind of online game or technology. This fully-integrative system is limited only by the operator’s creativity and imagination. It is worded in such a way that makes it fully encompassing of the most original and innovative online games.

Whilst this licensing system allows creators and investors to let their creative juices flow, the local regulator, the Lotteries and Gaming Authority (LGA) is very meticulous in ensuring that only serious and trust worthy operators are licensed. It does so by employing a rather extensive and rigours license process involving a number of stages (stage 1, stage 2, and stage 3). The fact that a gaming company is licensed in Malta and is fully compliant to Malta’s detailed regulations confers on  it a reputation of being trustworthy and highly professional on the onset before it even starts operating.

In the light of the above, it is imperative to choose the appropriate class of licence which sets out the parameters in which a gaming company can operate. At Chetcuti Cauchi, our dynamic Online Gaming team is geared towards assisting clients throughout the entire process, starting with the formulation of their gaming model which must fall within one class of license, as per the client’s wishes. We also advise and offer assistance in relation to the obligations and duties under each class of license, as well as compliance duties.

Online Gaming in Cyprus

Gambling is an extremely popular hobby in Cyprus, be it land-based or online, particularly in the northern Turkish-regulated area where gambling rules are much less stringent.

Prior to the enactment of the Betting Act of 2012 (L.106(I)/2012) which regulates both land-based and online gambling, the latter was unregulated and the government gave out licences to foreign companies to run online lotteries, betting exchanges, casinos, bingo halls, poker rooms, and sports books. The enactment of the Betting Act regulated the industry and introduced two types of licences, Class A and Class B, which fall under the remit of the National Betting Authority (NBA). With respect to online gaming which is licensable under a Class B licence, all forms of electronic (online) betting are included, apart from limited benefit games machines, lucky online casino games and electronic betting on horse races.

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