In many countries of the world, gambling is either prohibited or strictly under control of the government. In the field of gambling, the legislation is applied of the country where the gambling establishment is registered, as a matter of principle, and the legislation of the country where the company conducts its business activity. For example, if the gambling company has been registered on the Isle of Man and at the same time it has been targeting the citizens of Switzerland, Germany and Spain, then respectively the gambling law of the Isle of Man and the gambling law of Switzerland, Germany and Spain come into play.
However, at this point, we need to talk about the plausible solution through the judgments of the European Court of Justice regarding the freedom of establishment that state that if a company on the territory of the European Union has obtained a gambling license, then its activity may be aimed at the citizens of all European Union member states. Thus, if a company was issued a gambling license in the UK, it can provide its services throughout the EU, as the national legislation of a particular country cannot prohibit it from operating because it would violate one of the fundamental principles of the EU, the freedom to provide services.
Another important issue during the process of establishing a gambling company is to avoid the possibility of approval of an illicit intermediate entity. As a result of the EU freedom of establishment and judgements of the Court of Justice of the European Union (CJEU), this tricky problem can be cracked rather easily on the territory of the EU.
On the other hand, when creating a company in the so-called offshore countries (states with low taxes or no taxes at all and with no DTAs (double tax agreement) with the nation where the registered office is actually located, not in the EU), it is necessary to take into account the fact that the only way to avoid registering an illegal intermediary is to organize the company’s commercial activities directly in the country where the company has registered its office. In addition, it is necessary to make sure that the management of the company carries out its commercial activities directly in the country where it has its registered office, and that the director of the company is a real chief executive and not just a nominee representative.
In almost all jurisdictions where gambling is permitted by law, gambling (betting) tax is due. In addition, the profits of the gambling entity are also always subject to taxation. Dividends after deducting the above taxes are still of interest to tax authorities and fiscal regulators. Many companies involved in gambling business are familiar with the so-called tax at source, when a company is obliged to deduct a certain amount of tax prior to making a full payment to the end recipient. If financial funds subsequently to leave the country, then tax at source may be deducted from the tax on dividends, if there is signed double taxation agreement (DTA) between the country where the gambling establishment is located and the country of the person’s permanent residence. However, if there is no signed DTA, the EU member states tax dividends in accordance with their own domestic tax laws, which can be at a rate of 25% or more.
Gambling license in the UK
Up until 2005, there was no single law regulating the UK gambling market. In the late 90s, the British government created the Gambling Review Body to research the pace of development of the gambling industry and its impact on society. Based on the results, the Parliament of the United Kingdom adopted the Gambling Act 2005 that transferred license issuance to local authorities and formed the Gambling Commission. Consequently, the Act 2005 was supplemented by the Gambling Act 2014 that criminalized any individual in any jurisdiction, who provides gambling facilities or gambling equipment for UK citizens on a remote basis without a license issued by the relevant UK authorities. This law brought the British legislation into a kind of compliance with the provisions of the general EU legislation in the field of control for gambling activities.
The Gambling Commission controls the following types of gambling activities in the UK:
- Casino gaming;
- All types of betting;
The Gambling Commission issues licenses to gambling operators after the approval during a judicial hearing, at which the chief executive officer of the limited company should be present. The approximate processing time is 3-4 months. Once the license is issued, it is valid for three years and can be subsequently extended.
There are three main types of gambling licenses in Great Britain:
- Organizer’s license;
- Agent’s license;
- Remote general betting license;
Based on the functional responsibilities and the area of competence, the Gambling Commission issues the following types of licenses:
- Operating license;
- Personal management license;
- Personal functional license
One-off fee for submission of application for gambling license is £20,580 and staff/management license is about £330. The director of gambling facility is also obliged to pay an annual fee to guarantee that his operating license continues to be valid. The annual license fee is contingent on the company’s gross turnover.
The License Conditions and Codes of Practice (LCCP) set out the rules and requirements a licensee must meet in order to hold his/her operating license and/or personal license.
To start a gambling company in England and be able to offer its services throughout the European Union, you need to create a limited company in England or a public limited company with premises on the territory of England. It is very important in order to obtain a gambling license from the Gambling Commission that the following conditions be met:
- Senior management of the company has to be located in England;
- Director or a person, who appears to be a director must reside in England;
- Suitable place of business in England (it is to note that having just a registered office in England will not suffice);
- Open account on behalf of the company in a bank located in England;
- Online service should hosted on English server;
- British-based LC or PLC should be the owner of the domain;
- Annual audit inspection (the UK based audit firm to be engaged) once an income of more than £1 million is achieved
In terms of taxation, there are two duties in England when it comes to gambling tax, namely:
- Betting duty (15%) (payment on each net contribution taken in from betting);
- Remote gaming duty (15%) (payment on the net profits from gambling)
IQ Decision UK lawyers are confident that the Gambling Act 2005 was passed with the sole intention of replacing years of restriction and ambivalent suppression of gambling with a tolerant administration that would treat the gambling industry as an invaluable contribution to the modern-day digital world economy.
Despite the increasing burden of regulatory compliance, IQ Decision UK lawyers will readily assist you in obtaining a gambling license in the United Kingdom by avoiding watershed restrictions and hostility from fiscal and licensing authorities.
Gambling license in Malta
IQ Decision UK attorneys have an extensive and successful experience in helping individuals and legal entities from throughout the world in the process of obtaining gambling licenses in various jurisdictions. One of them is the Republic of Malta, where the gambling license is issued by the Malta Gaming Authority (MGA).
Prior to issuing a gambling license, the MGA conducts a thorough review of the applicants which consists of the following stages:
- Fit and proper exercise by evaluating all info associated with individuals involved in management and funding and entity’s potential operability;
- Comprehensive analysis of the applicant’s business plan;
- Applicant’s compliance with statutory and operational requirements;
- System audit of the applicant’s technical environment;
- Compliance with the MGA’s requirements after going live
There are two types of gambling licenses in Malta:
- Gaming Service license;
- Critical Gaming Supply license
All applicants who applied either for a gaming license or a critical gaming supply license at the MGA can receive one or more licenses depending on the type of their gambling activities:
- Type 1: license that covers games of chance played against the house and the results of which are determined by random-number generators;
- Type 2: license that covers games of chance played against the house and the result of which are not determined by random-number generators, but rather by the result of competition or event (horse/sport betting);
- Type 3: license that covers games of chance played against the house and wherein the operator is not a subject to gaming risk, but instead generates proceeds by taking a commission based on the amount of stakes;
- Type 4: For skill games pursuant to Regulation 8 of the GAR
Licensing fees vary depending on the income level of a gambling establishment:
- Type 1: Not less than €15,000 throughout the duration of the license, but cannot exceed €375,000 in any one license period;
- Type 2: Not less than €25,000 throughout the duration of the license, but cannot exceed €600,000 in any one license period;
- Type 3: Not less than €25,000 throughout the duration of the license, but cannot exceed €500,000 in any one license period;
- Type 4: Not less than €5,000 throughout the duration of the license, but cannot exceed €500,000 in any one license period;
The Licensee will be required to submit the Declaration of Go-Live to the MGA after the licensee commences his commercial activities.
Gaming tax in Malta is 5% on the revenue generated from particular gaming services during the relevant tax period.
Gaming device tax in Malta varies: from 30% for Type 1 and Type 2 licenses to 12.5% for Type 3 and Type 4 license.
The Malta Gaming Authority requires a company applying for a Gaming Service license to have the following minimum share capital:
- Type 1 – Minimum €100,000;
- Type 2 – Minimum €100,000;
- Type 3 – Minimum €40,000;
- Type 4 – Minimum €40,000
For Critical Gaming Supply license, respectively:
- Minimum €40,000
Highly qualified and experienced lawyers from IQ Decision UK will help you obtain a gaming license in the central Mediterranean archipelago and will be able to professionally advise you on the requirements of the MGA for each separate license, whether it is a traditional, land-based gambling establishment or an online casino.
Our attorneys will intelligibly and thoroughly explain all the nuances of the taxation system in Malta, explain the so-called “gaming vertical” concept to you in plain terms, will be of immense help in collecting the full package of documents required for obtaining a gambling license and will closely monitor the entire process of obtaining a gambling permit until its successful completion pursuant to Gaming Act, 2018 and subsidiary legislation.
In addition to obtaining gambling licenses in the European Union, lawyers from IQ Decision UK will provide you with full legal support in obtaining offshore gaming licenses for the land-based entities and online platforms on the territories of the Caribbean Community (CARICOM) countries and the countries of Central and North America, namely:
- Trading permit (equivalent to gambling license) in Costa-Rica issued by the Ministerio de Economía, Industria y Comercio (MEIC);
Ø No gambling license is required. Instead, you will need to apply for a trading permit (DLP permit);
Ø No share capital is required;
Ø No taxes for offshore gambling services
- Gambling license in Belize issued by the Belize Gaming Control Board;
- Gambling license in Antigua & Bermuda issued by the Financial Services Regulatory Authority (FSRC);
Ø No licensing requirements for online casino in the case of availability of a certificate from eCommerce Online Gaming Regulation and Assurance (eCOGRA);
Ø No taxation;
Ø Gambling house can be located outside the country
- Kahnawake online gambling license issued by the Kahnawake Gaming Commission (Canada);
- Betting and Gaming License in St. Kitts and Nevis issued by Saint Christopher and Nevis Gaming Board;
- Curaçao Gaming License issued by Curaçao Gaming Control Board (CGCB) and / or by Curaçao Internet Gaming Association (CIGA);
The gambling industry is a legal maze, wherein it is easy to get lost without a knowledgeable and experienced navigator. Without qualified and competent legal support from lawyers, who have many years of successful experience under their belts in obtaining gaming licenses for their clients from all over the world, you will most likely be stuck at the very beginning of your journey.
IQ Decision UK attorneys will help you carefully approach the process of obtaining a gaming license, assist you in optimizing your costs, and will regularly advise you on constant changes in the legislation related to the gambling industry in different countries.
With our help, you can get a gaming license almost anywhere in the world where gambling is legal. Call us now and start building your thriving business.