Issue link: https://maltatoday.uberflip.com/i/685221
maltatoday, SUNDAY, 29 MAY 2016 XII Gaming in Malta WH Partners: Providing a holistic approach What makes the company so ideally placed to assist the Gaming industry? WH Partners has vast experi- ence in the industry having been established as a gaming firm since its inception. Due to its focus, WH Partners can provide a holistic approach to a client wishing to become established in the gaming in- dustry. The team understands the needs and concerns of a gaming operator and therefore can assist a client from the formation stage of operations to daily assistance related to compliance, as well as to any eventual sale of the business. Who are your typical gam- ing clients? There are various offshore jurisdictions which offer remote gaming licences. However serious operators opt to be licensed under a strict regime. Our typical gaming clients are those companies seeking to be established as reliable gaming operators. The majority of gaming clients are foreign owned, mostly from the Scandinavian countries and the Balkans. Why is Malta considered to be a top jurisdiction for the attainment of a gaming licence and what are some of the factors which make Malta appealing to opera- tors? Malta was the first European country to set a legal frame- work for the remote gaming business. Its strong legal framework together with the tight procedures implemented by the Malta Gaming Authority placed Malta immediately as a top gaming jurisdiction. This resulted in other countries looking toward Malta as an example to follow. Apart from the strong legal framework, operators see Malta as an attractive jurisdic- tion due to the competitive costs for hiring personnel and also due to its tax legislation. What are the four classes of Malta Gaming Licences and how does the gaming tax vary among them? Under the current remote gaming regime, applicants can opt to apply for four types of licences. There are three business-to-consumers licences which depend on the type of product being offered (1) remote gaming, (2) remote betting, and (3) a licence to promote and abet remote gaming. The fourth is a business-to-business licence for the hosting and managing of remote gaming operators. The remote gaming licence, what is commonly known as a Class 1 licence, can be either a standalone – whereby the operator offers his own propri- etary games – or a class 1 on a class 4 – whereby the oper- ator would offer games hosted and managed by a licensed business-to-business licensee. Such licences are subject to a fixed monthly gaming tax. For a Class 1, the gaming tax is set at €4,660 per month for the first six months which is increased to €7,000 thereaf- ter. For the Class1 on 4, the monthly gaming tax is set at €1,200. Remote betting li- cences are subjected to a vari- able monthly tax calculated at 0.5% of bets accepted. This is capped at €466,000 per year. The tax for the Class 3 licence is put at 5% of the rake less certain acceptable expenses. The business-to-business licence, also known as the Class 4, is not taxed for the first six months of operation. For the second six months, the tax is fixed at €2,330 while thereafter the tax is €4,660. Can gaming applications be declined? The Malta Gaming Authority has the discretion in declining gaming licence applications. However we have rarely seen situations where the Author- ity has declined an appli- cation entirely. Generally a discussion process is ensued between the applicant and the Authority in order to remedy any serious concerns, if pos- sible, and only if the situation cannot be remedied, then the licence application would be rejected. What are the main concerns of Gaming companies with regard to tax advice? The main concern at the moment probably relates to tax – what needs to be paid and where. In particular, this has become a major issue when it comes to VAT. As from 1 January 2015 there was a change in the place of supply rules of electronically sup- plied services, telecoms and broadcast provided to consum- ers, whereby it is now consid- ered that the place of supply shall be where the customers are located. Suppliers of said services would have an obliga- tion to charge VAT in terms of the rules in the Member State where the customer is lo- cated unless said services are exempt in said Member State. The challenge for gaming com- panies is therefore to establish where their clients are based and whether or not VAT is to be charged. What are some of the key legal issues Gaming compa- nies must take note of? Apart from the general compliance with the licence requirements, gaming opera- tors need to be aware of their obligations under Maltese law in general. Some areas of law are generally very similar to other European countries in view of harmonisation at Eu- ropean level but nevertheless there could be some aspects of law which differ and which may require particular attention. Of particular note to gaming companies is employment leg- islation and the way employees may be dismissed, as such practices may differ from one country to another. Furthermore, with the publi- cation of the New Anti-Money Laundering Directive, as well as the new EU General Data Protection Regulation, it is safe to say that Money Laundering and Data Protection legislation will take a central stage as key legal issues for gaming compa- nies for the months to come. Joseph Borg, Senior Advisor to WH Partners, is an expert in gaming law and also lec- tures Gaming Law at the Uni- versity of Malta. Formerly, he was Chief Regulatory Officer at the Malta Gaming Authority and a Member of the Board of Trustees of the International Association of Gaming Regu- lators, Inc (IAGR). He is also the Secretary General of the Malta IT Law Association. Robert Zammit, Senior As- sociate at WH Partners, is a regulatory, licensing and corporate lawyer and prac- tices primarily in the gaming and transport industries. His principal areas of expertise are licensing of gambling busi- nesses and regulatory compli- ance in the area of gambling, intellectual property, informa- tion security, privacy and data protection. He is a member of the Malta Chamber of Advo- cates. We speak to Joseph Borg and Robert Zammit of WH Partners about their reliable and wide-ranging approach to the industry The main concern at the moment probably relates to tax – what needs to be paid and where Joseph Borg Robert Zammit