Malta However, to be able to obtain a Class

Maltais the ideal base for remote gaming operations for several reasons. The MalteseGaming Authority and other gaming regulations offer a very efficient andinexpensive licensing process within a gaming sector which is characterised byan accessible and flexible regulator. The Maltese legal and tax framework iscontinuously improving to be up to date with modern day technology.

1 Malta holds a greattelecommunications infrastructure together with having a multi-lingual labourforce who are knowledgeable on sectors such as remote gaming operations. TheMaltese gaming taxes are relatively low, having the lowest effective corporatetax rate in Europe, that of 5%, and is also signatory to a multitude of doubletaxation treaties with countries around the world.2Licensinga foreign, non-EU corporation in Malta to offer managed sports betting modulesto remote gaming operators is in fact possible.

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Your company will be acting asa software vendor, providing management and hosting facilities to otheroperators under its platform.3 Since Betallyouwant is aNevada corporation, for it to offer its services to remote gaming operators inthe US and in Malta, it needs a Class 4 Maltese Licence.  The Maltese subsidiary legislation, no.438.

04, regarding the Remote Gaming Regulations, in its First Schedule declaresthat “(d) Class 4 Remote Gaming Licence shall be a licence to host and manageremote gaming operators, excluding the licensee himself”.4 It is the Class 4 licencewhich provides a business to business (B2B) gaming licence. However, to be ableto obtain a Class 4 licence, Betallyouwant must be a body corporate establishedin Malta, in terms of the Maltese Companies Act. Betallyouwant must becomefirst a limited liability company under the Maltese jurisdiction in order forit to be licenced.

5I.                 The Application ProcessThefirst stage, together with sending the Remote Gaming Application to the MaltaGaming Authority (MGA), a fully and precise plan of the business adequacy mustbe presented in order to forecast precisely the operation so that the MGA canconfirm that such a business is viable. The application fee is of €2330.  If the business plan is accepted, a SystemReview is conducted where the MGA assesses the technical ability of yourcompany, as per Article 20 (1).6 The Memorandum of Articlesof Associations and the Incorporation Certificate of the company need to bepresented at this stage. If the review is of a positive result, then the GamingLicence is issued and Betallyouwant Inc. can operate its activities. Acompliance systems audit is to be carried out within the first six months ofthe issuing of the licence.

A Maltese licence is granted for 5 years, providedthat an annual fee of €8500 is paid by the corporation, and may be renewed forfurther five-year periods after it expires, following another renewal processwhich is to be received by the Authority at least 60 days before the expirationof the current licence. An application to appoint a key official of theincorporation is also to be done and has to be approved by the MGA as perArticle 15. The key official is required to supervise the operations as well asensuring that Betallyouwant Inc. will be complying with the laws andregulations given when obtaining the licence. II.             TaxationTheRemote Gaming Regulations in its Fourth Schedule, Article 1 (d) states that anoperator holding a Class 4 license which hosts and manages other remote gamingoperators shall have the first six months tax free. Then, the operator shallpay €2330 monthly for the proceeding six months and after, €4660 monthly untilthe end of the licence. A monthly tax of €1165 shall also by paid by thehosting platform, which in your case will be your company, Betallyouwant Inc.

,when hosting operators which are licenced by the government or competentauthority of a European Economic Area Member State, thus not being in Malta.7 These are the companieswhich are not in possession of the relevant Class 1, Class 2 or Class 3 licencein terms of these regulations, being hosted and managed by the Class 4 licenseeon its platform. The Maltese registered company owns at least 10% of the equityshares in the non-resident company. Such tax shall be paid monthly by not laterthan the 20th day of the following month.8Taxstarts to become due right after the commencement of the gaming operation, orotherwise as particularly specified by the Lotteries and Gaming Authority. TheLotteries and Gaming Authority may issue directives to grant any reductions,set-off or relief regarding gaming tax. 9  These may be granted unilaterally,bilaterally or multilaterally, depending on the treaties and memoranda ofunderstandings or any other agreements to which Malta enters into with foreigngovernments or local or foreign authorities of the government agencies.

Themaximum tax to be paid should not exceed €466,000 annually. The tax is paid tothe Lotteries and Gaming Authority on behalf of the Government of Malta.Generally, shareholders would incur an effective tax rate of 5% upon claimingtax refund. Such effective tax rate is the lowest in Europe.

10 III.          Type of SetupInMalta, licensing regulations specify what type of person may apply for alicence. The Authority has to be “reasonably satisfied that all personsinvolved are fit and proper persons”.11 To determine this, theAuthority examines the character and the business reputation of the personswhich are vested with the executive powers in the application, together withtheir current financial position and background.

The MGA examines also the businessreputation of the applicant’s promoters, shareholders and directors and whetherthe applicant has enough business means in order to conduct the operationssuccessfully. Is the applicant able to obtain resources and to maintain theminimum required reserves in order to make sure that the players will havetheir winnings paid and their deposits returned? Is the applicant committed tomaintain a physical presence in Malta? Has the applicant followed policies andwill he prevent money laundering and suspicious transactions? The authoritygives out its opinion whether or not the applicant is tainted withillegalities. Checks will too be made regarding whether the applicant is ableto comply with the policies and directives given by the Authority while makinguse of his internal control structures. The MGA may conduct severalinvestigations with other national and international regulatory bodies and lawenforcement agencies. V. Would obtaining a licence in Malta allow Betallyouwant Inc. to supply its services all over the world? Thereis no such thing as an international gaming licence, therefore BetallyouwantInc. must take notice of the local gaming jurisdictions of the countries inwhich it wishes to operate.

Malta’s regulatory framework is both game and technologyneutral. This means that it accepts any form of gaming coming from any countryfor licencing.12This being said, one still has to note Article 3 of the RGRs which states that”no person shall operate or promote or sell or abet remote gaming in or fromMalta unless such person is in possession of a valid licence of the relevantclass, as set down in the First Schedule, issued by the Authority or is inpossession of an equivalent authorisation by the government or competentauthority of an EEA Member State, or any other jurisdiction approved by theAuthority. Any person who acts in breach of the provisions of this regulationshall be guilty of an offence against the Act.”13 Unfortunately, there isno determinate list of restricted countries when it comes to moving a B2Boperator services from Malta to other countries worldwide. One has to take noteof the other countries’ jurisdictions first.

The host countries requirements needto be adhered to i.e. Companies wishing to set up B2B and B2C operations in UKand Romania still need the host countries’ authorised platform licence orprovider licence, irrespective of the Maltese Class 4 licence. Whenit comes to offering services to remote gaming operators in Europe, the MGAsigned and Administrative Cooperation Agreement with European Economic Areagambling authorities, in 2015, in order to reach the enhancement ofcross-boarder cooperation between EU Member States within the EU internalmarket.14 This helped to exchangeinformation in an easier manner and reduced any unnecessary administrativeburdens which were imposed by gaming related issues.15 However, not all EUCountries accept a foreign licence to operate within its territory. Severalexamples are Italy, Spain and the UK which allow companies to operate withintheir territory only if they have the country’s licence.

16Tooperate in the United States of America, the Maltese licenced company has totake a different approach. Different states of the US have different lawsregulating such remote operations, several of them even banned such operations.Most common rules requirements in the US are that only land-based operationslocated within the particular state will be eligible to apply for licenses tooperate within the said state’s online gambling industry. The majority ofoffshore gambling operators therefore are prohibited from taking advantage ofthe legal online gambling in the US.17 TheCongress of Washington banned online gambling having the only exceptions beingNevada and New Jersey, provided that the online gambling which takes place inthese two states is all state regulated. Basically, if other states do not enact laws in the future,Betallyouwant Inc.

may only supply its sports business modules to operatorswhere it already has business (New Jersey and Nevada), which both Statesrequire a specific licence in order to operate within.18 VI.         The Future of the Maltese GamingLegislationOnthe 12th of July 2017, the MGA proposed a white paper in Parliamentholding numerous changes to Malta’s iGaming Law.

Such changes will affectBetallyouwant Inc. if it relocates itself under the Maltese jurisdiction.Having a full list of changes, the following are the most relevant to your company:The current multi-licenses system is to be eliminated and there will only betwo different types of licenses; a Business-to-Consumer (B2C) licence and aBusiness-to-Business (B2B) licence having a broader, objective based (not anexcessively prescriptive one as we have to date) regulatory process becomingmore operator friendly. The position of the Key Official would be enhanced andgiven functional responsibilities including having the ability to directlyscrutinise and target supervisory controls. B2B licensees, such asBetallyouwant Inc. are to be exempted from gaming tax.19 1Joseph Cuschieri, ‘Future Proof’ 2015 2Gaming Jurisdiction Overview, ‘A New Chapter’ 2016 3 ‘Gaming & Gambling – WH Partners – Leading LawFirm Malta’ (WH Partners – Leading Law Firm Malta)

eu/expertise/gaming-gambling/> accessed 3 January2018.4Remote Gaming Regulations, SL 438.045 ‘Types Of Igaming Licenses | Ksi Malta’ (Ksimalta.com,2018) accessed 3January 2018.

6Remote Gaming Regulations, SL 438.047 DrSilvana Zammit, ‘Malta I-Gaming Licence’

pdf> accessed 3January 2018. & Remote Gaming Regulations, SL 438.048Ibid.9 ‘Igaming Taxes And Fees | Ksi Malta’ (Ksimalta.com,2018) accessed 3January 201810Ibid.11Remote Gaming Regulations, SL 438.0412 Andrew Massa, ‘The Relevance Of Maltese Remote GamingRegulatory Regime In The Light Of The Widespread Adoption Of NationalAuthorisation Regimes Across Europe.’ (LL B (Hons), University of Malta 2016).13Remote Gaming Regulations, SL 438.0414EC, ‘Cooperation Arrangement between the gambling regulatory authorities of theEEA Member States concerning online gambling services’ (Arrangement)(2015).15Ibid.16 ‘Gambling Legislation In Western European Countries -Everymatrix’ (Gambling Legislation in Western European Countries -EveryMatrix, 2018)accessed 3 January 2018.17 ‘Legal US Online Gambling – A State-By-State Guide ForThe United States’ (Play USA, 2018) accessed 3 January 2018.18 ‘Summary Of Online Gambling Laws In The USA’ (Legitimatecasino.com,2018) accessed 3 January 2018.19 A White Paper to Future Proof Malta’s Gaming LegalFramework 2017.