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Offshore betting licences:

Relocating betting operations to offshore jurisdictions: MALTA
© 2002 Dr Jean-Philippe Chetcuti. All Rights Reserved.

In 2000, the Maltese government issued regulations governing the operations of Internet Based Betting Offices.

Under these regulations, the Director of Public Lotto will grant licences to operate such betting offices to such persons having "the appropriate business ability to conduct the betting office successfully."  Licences are issued for a minimum period of five years and may be extended for further periods of five years.

Favourable Tax Regime

The attractiveness of Malta as a venue for betting operations is also due to the tax-friendly environment in which they are allowed to operate:

  • Betting transactions are taxable at 0.5% on turnover.

  • No licence fees

  • No application fee

  • Effective corporate tax rate of 4.17%

Maltese betting operations are highly regulated and are carried out through an International Trading Company (ITC) set up for the purpose.  ITCs are subject to the corporate tax rate of 35%.  However, this is effectively reduced to 4.17% as non-resident shareholders are entitled to a rebate of 30.83% of the tax paid on distribution of dividends.

Basic requirements

The regulations require a presence in Malta in the form of a premises from which the betting office's operations are carried out.  Effectively, a call centre is established exclusively to receive bets together with a processing (back office) operation. 

Betting against computer generated games such as cyber-casinos on the Internet will not be given licences but the Internet may be used as a communication medium (e-mail) to the call centre.

The activities of ITCs are limited to those carried out outside Malta.  Thus Maltese residents are prohibited from placing bets with licensed companies. Bets can only be taken from non Maltese residents.

Obtaining a Betting Licence

The conditions for licences are relatively stringent, in the interest of consumers and of the reputation of betting companies. Licensing depends on a number of factors concerning the personality of executives of the applicant company, the applicant’s financial position and background, and the applicant’s abilities and availability of appropriate resources.

Furthermore, applicants will have to draw up an audited control system with regard to its accounting, administration and electronic technology. Licensed companies may be inspected at any time to verify whether they abide with their licence.

An application for a betting licence requires the following accompanying documentation:

  • a detailed profile of the promoting company.

  • a copy of the last audited accounts of the promoting company.

  • a business plan indicating the economic activity (including job creation) which will be carried out from Malta

  • a plan of the premises earmarked for adoption as a call centre.

The operations of licensed companies are subject to the Laws and regulations of Malta.

Malta - a popular betting destination

The above scenario has resulted in a considerable number of international betting companies, many based in Britain, recently setting up offshore operations here, enabling their clients to bet online through the numerous Internet facilities available today.

back to Lex e-Scripta© 2002 Dr Jean-Philippe Chetcuti. All Rights Reserved.

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