Despite the global perspective of internet, online gambling regulations are not universal. That is to say, each region has its own jurisdictions that cover the relevant legal issues, such as licensing. For instance, the legislation in some areas permits them to grant licenses and regulate companies they run online gambling sites or supply industry services, i.e. gaming software. The authorities that have the power to issue licenses and regulate the licensees are known as licensing authorities. In this point, it should be noted that online gambling sites may provide their services to customer legally, under the condition they hold a betting or gaming license granted by an appropriate licensing authority. The sites should launch at least part of their operations within the jurisdiction where they wish to be licensed.
In this article, the online gambling jurisdictions in Malta, UK, Curaçao, Antigua and Barbuda and the Isle of Man will be presented.
Malta is a leading market in online gambling jurisdictions in the European Union. The Lotteries & Gaming Authority (LGA) deals with all regulation and licensing in the region. Additionally, the LGA investigates and approve prospective licenses. Maltese gaming licenses embrace competitive licensing fees and tax rates. Precisely, Malta’s regulation cap on gambling tax is not more than €466000 per year.
An outstanding advantage of being licensed in Malta is that the jurisdiction is on the “whitelist” issued by the UK Gambling Commission. That is to say, operators holding a Maltese license may provide their services to UK residents.
Following the Maltese legislation, there are four classes of licenses. Each license covers different areas of gaming. Operators may apply for more than one licenses that are granted for five years periods.
- Class 1: casino-type games, skill games, online lotteries.
- Class 2: fixed odds betting, pool betting, spread betting.
- Class 3: peer to peer gaming and betting exchanges.
- Class 4: it concerns software vendors.
The Maltese jurisdiction regulates the satisfactory operation of interactive games, players’ protection and prevention of money laundering. An important requirement to get a Maltese license is that a major part of operations must be physically based in Malta. When the licensees get the license they have to conform to some additional conditions. For example, they are obliged to maintain proper financial records, establish data protection processes, and construct policies related to responsible gambling. It should be pointed out that licenses can be annulated at any time and specific acts by licensees need a written approval.
The UK has a well-developed and efficient regulatory framework for online gambling. The UK Gambling Commission, established under the provisions of 2005 Act, has the authority to provide licenses and regulate gambling. In other words, the Gambling Commission may issue and revoke licenses, and impose fines when it is necessary.
Two major advantages of UK jurisdiction are transparency and safety. The UK jurisdiction prevents gambling from becoming connected with crime or disorder, ensures transparency and fairness, and protects minors and other vulnerable groups from being exploited.
The 2005 Act provided access to European Economic Area (EEA) and other “whitelisted” countries to the UK market. Whitelisted countries outside the EEA are Alderney, Antigua and Barbuda, Gibraltar, Isle of Man, and Tasmania. International online gambling sites that do not belong to the EEA and the “whitelist” cannot offer their services to UK residents.
In 2014, the UK introduced a regulatory framework that requests operators to pay a 15% tax on gross profit. The particular taxation is in line with the existing tax rate for online gaming operators licensed by the UK jurisdiction.
Curaçao is an international leader in online gaming licensing. Curaçao provides a wide range of services for online gaming providers and operators, such as dedicated servers, high-capacity private racks, private cloud services, and other hosting options.
There are two ways to acquire an online gaming license in Curaçao. The first one is to obtain a master license, granted by Curaçao E-gaming Licensing Authority. This license covers all product operators, software providers, and game types. The second one is to acquire a sublicense. The sublicense operates under the auspices of the market license. Hosting businesses may split their current gambling licenses for the use by partner companies. Sublicensees and master licensees have the same rights concerning the operation of an online gaming site. However, sublicensees are not entitled to offer their sublicenses.
A major advantage of Curaçao jurisdiction is that not all activities need a Curaçao company formation. Nevertheless, the formation of a Curaçao company allows applicants to request an Ezone permit and thus be benefited to a special tax regime that includes a net corporate income tax rate of 2%, 0% on Gross Bets, no import duties, no sales tax and no VAT.
Antigua and Barbuda:
Antigua and Barbuda is a popular online gambling location. In fact, it was one of the first countries that began offering online betting licenses. As it was mentioned before the country belongs to the UK “whitelist” of gambling jurisdictions. Therefore, sites licensed in Antigua and Barbuda may offer their services to residents of the UK.
The authority that administers online gambling activity in Antigua and Barbuda is the Directorate of Offshore Gaming. It functions under the provisions of a legal framework defined by the International Business Corporations Act and Interactive Gaming and Interactive Wagering Regulations. The Directory of Offshore Gaming is a division of the Financial Services Regulatory Commission.
The Directorate of Offshore Gaming has the authority to issue two types of licenses. One considers interactive wagering and the other one considers interactive gaming. Moreover, this particular regulatory organisation is responsible for assuring licensees act within the specified transparency guidelines. Approved licensees may display the Preferential Seal so that to demonstrate that they meet the necessary requirements.
Isle of Man
The Isle of Man is among the oldest and most notable jurisdictions in Europe. Online gambling regulations in the Isle of Man provide benefits to online gambling companies and protection to the customers. Furthermore, the region offers a considerably attractive taxation. The Gambling Supervision Commission administers the licensing and regulation of online gambling. The Commission is responsible for assuring that the licensees act in a fair manner and players get their true winnings.
Services provided to UK/EU individuals in the Isle of Man are VAT exempt. In the case of non-EU customers and B2B partners, the tax rate is 0%.
Gambling sites licensed in the Isle of Man may provide their services to UK residents as the Isle of Man is in the UK “whitelist”.
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Michael Chambers & Co has many years of experience in licencing online gaming companies in various jurisdiction. If you wish to receive more information or apply for online gambling licenses, please contact us at [email protected]