Malta is the most sought after nation for online gambling operators. Online casinos, bookmakers and poker rooms targeting Indian users often choose Malta to get a local licence. A license from Malta does not mean the operations are legal in India or any other country where gambling may be prohibited under the local laws.
Strict criteria by Malta – Symbol of trust and credibility
Licenses from Malta help to project the right image of trust and credibility needed to convince prospective players to onboard onto a platform that has no physical presence in an operating country like India.
The Malta Gaming Authority (MGA) applies strict eligibility criteria for issuing licenses, yet gambling operators targeting far away nations like India take hardships to incorporate under Maltese laws and get a license from MGA.
The present regulatory framework covers games of chance (determined by a random number generator or by results of an event), peer-to-peer games and controlled skill games.
Time-bound application procedure by MGA
The application procedure for online casinos often takes between two and three months from the submission of a complete application. The MGA assesses applicants on a pre-decided fit and proper to conduct gaming business in accordance with local laws and regulations, and the organisational structure including operational and statutory requirements.
The MGA issues licences of the following categories:
- Gaming Service licence:
A business-to-consumer licence to offer or carry out a gaming service; - Critical Gaming Supply licence:
A business-to-business licence to provide or carry out a critical gaming supply and management of software, to generate, capture, control or process essential regulatory record and/or supply and management of the control system itself on which the software resides; or - Critical Gaming Supply licence: a business-to-business Type B licence to provide or carry out a critical gaming supply and management of material elements of a game.
The MGA classifies a gaming service or a critical gaming supply as one or more of the following game types:
- Type 1: which shall mean games of chance played against the house, the outcome of which is determined by a random generator, and shall include casino-type games, including roulette, blackjack, baccarat, poker played against the house, lotteries, secondary lotteries and virtual sports games; and/or
- Type 2: which shall mean games of chance played against the house, the outcome of which is not generated randomly, but is determined by the result of an event or competition extraneous to a game of chance, and whereby the operator manages his or her own risk by managing the odds offered to the player; and/or
- Type 3: which shall mean games of chance not played against the house and wherein the operator is not exposed to gaming risk, but generates revenue by taking a commission or other charge based on the stakes or the prize, and shall include player versus player games such as poker, bingo, betting exchange, and other commission-based games; and or
- Type 4: which shall refer to controlled skill games.
Long tenure licenses and stable regulations
The default period for the grant of a licence is ten years, which can be terminated prior due to a breach of terms. All B2C operators are subject to a gaming tax calculated at the rate of 5 per cent on the gross gaming revenue generated from the said gaming services generated by Maltese players during the relevant tax period.
The regulations mandate funds being kept segregated and remaining separately identifiable at all times whereby the MGAÂ may, in its sole discretion, exercise viewing rights over the common account of player funds.
Connected to major economies
Located in the middle of the Mediterranean sea close to Italy, is serviced by an international airport with 100’s of flights a week to all major European, Middle Eastern and North African destinations, the nation is well connected. Malta is a full member of the EU and Malta’s regulatory framework enables other European Economic Area operators to obtain a recognition notice to operate freely in or from Malta on the basis of their EEA licence.
Conclusion
Malta has the most progressive laws pertaining to gambling. The MGA is proactive in the implementation of policies and guidelines that have created credibility for the licenses issued by it. But users in India must note that these entities do not have any physical presence in India and do not comply with local Indian laws.
The applicable foreign exchange laws in India prohibit foreign currency transactions pertaining to gambling. So these entities resort to shady structuring to bypass restrictions and deal with Indian customers.
Although customers may have grievance redressal mechanisms under Maltese laws, Indian users may not be in a position to enforce the same. So it is advisable to not deal with offshore online gambling sites which may be licensed by MGA but continue to be illegal in India.