iGaming, or online gaming, involves the wager of money on the outcome of an event or a game, whether generated randomly or not, through the internet. iGaming activities include, but are not limited to the following:
- Lotteries
- Fantasy sports
- Games such as poker or bingo
- Online casinos and slot machines
- Fixed-odds betting, including sporting events
Gaming companies looking to operate in Malta must be in possession of a license issued by the Malta Gaming Authority (MGA), which is the regulatory body for gaming in Malta. The Malta Gaming Authority is considered a flagship authority within the gaming industry due to the robust gaming framework that has made Malta an iGaming sector hub. The accounting team at GCS Malta discuss the history of iGaming, types of licenses and direct costs of a gaming company in this article.
History of iGaming
iGaming arrived in Malta in 2002. Since Malta joined the EU in 2004, more companies were investing in a Maltese (MGA) license as this meant that this could be used to service any EU country via the ‘European Single Market’.
The last decade has seen Malta’s gaming sector flourish. In 2004, Malta became the first EU member state to enact legislation on remote gaming, and industry stakeholders consider Malta as one of the foremost tried and tested jurisdictions in the world.
While European countries are taking measures to introduce country-level regulation for the gambling business, many jurisdictions worldwide are not; and in these markets, MGA license still enjoys a leading position. Compared to licenses from alternative sources, the MGA license enjoys a very high degree of respect. When players see ‘Licensed by the MGA’ on a website, they know that they can trust it since MGA prioritises player protection and anti-money-laundering practices and offers a stable regulatory framework for the gambling industry.
Types of licenses
Types of licenses within iGaming include the following:
- B2C (business-to-consumer) license – required to offer or carry out a gaming service via the Company’s platform or via a platform hosted by a third party; or
- B2B (business-to-business) license – required to offer a critical gaming supply such as the supply and management of material elements of a game (e.g., game developers) or the supply and management of software (or the control system of software) to generate, capture, control or process essential regulatory records
Direct costs of a gaming company
- License fees
- Gaming taxes depending on the jurisdiction
- Royalty fees paid to platforms hosting games
- Payment Service Provides (PSP) – fees typically a percentage of deposits/withdrawals
Why GCS Malta?
At GCS Malta, our expert accounting team offers a full range of essential accounting and support services according to the requirements of the Malta Financial Services Authority. Contact us today for more information on how we can assist you!
