Maltese licensure: Costly, complex… yet relevant
From the establishment of the Lotteries and Gaming Authority in 2001 to becoming the first EU state with a dedicated remote gambling framework in 2004, and more recently launching blockchain and cryptocurrency initiatives like the Sandbox Framework for Innovative Technologies in 2019, Malta has consistently been at the forefront of the industry. Over the years, the country has developed a mature iGaming ecosystem, featuring a skilled workforce with expertise across all sectors, an advanced technological infrastructure and a business-friendly environment supported by a top-tier network of service providers and industry specialists.
A global benchmark
The MGA licence is widely regarded as the gold standard across the iGaming sector. Trusted by players, financial institutions and industry stakeholders alike, it is frequently referenced by other regulators as a benchmark for best practice.
The high regard with which the licence is viewed is well-earned, as obtaining an MGA licence is a demanding process necessitating significant time, effort and expense. Maintaining the licence requires strict adherence to anti-money laundering, know your customer and customer due diligence regulations.
While compliance with these standards does involve higher costs, it also comes with tangible commercial benefits. MGA-licensed operators often find it easier to attract investment and secure partnerships with reputable game providers and payment processors on favourable commercial terms. The enhanced credibility that comes with an MGA licence also grants licensees access to banking institutions within the European Union, helping them meet the increasingly stringent risk assessments applied to iGaming businesses. Probably the most significant draw for businesses is Malta’s highly attractive tax system, which when correctly implemented, can effectively reduce the tax burden for iGaming companies to as low as 5%.
Market access
While a Maltese licence should theoretically provide access to the European market, leveraging principles outlined in the Treaty on the Functioning of the European Union, particularly the freedom to provide services (Article 56), this is not always the case in practice. A growing number of key European markets have transitioned to domestic licensing requirements. Countries such as Germany, the Netherlands, Sweden, Italy and the UK all require that iGaming operators obtain a domestic license to offer services within their borders.
Although the Malta Gaming Authority (MGA) does not inherently restrict the markets its licensees can target, operators are ultimately responsible for ensuring they comply with all local regulations wherever they operate. While Maltese courts have, in certain instances, upheld the rights of their licensees against actions in other EU member states, these rulings do not negate the necessity of securing local licenses in markets where they are required.
Complexities, costs and competition
Despite the historical strengths and ongoing advantages of the MGA licence itself, the current iGaming landscape presents MGA licence-holders with a complex array of challenges.
Recent data shows a declining number of licensed gaming companies and a reduction in new player registrations
Rising compliance requirements, increasing operational costs and heightened competition from emerging jurisdictions are creating significant headwinds for operators.
Licence holders are faced with strict obligations regarding customer due diligence, transaction monitoring and the reporting of suspicious activities. These responsibilities demand continuous investment in technology, skilled personnel and staff training. Player protection has become a central focus, with the MGA requiring operators to implement systems designed to identify and support vulnerable players. Tools such as self-exclusion, deposit limits and reality checks must be in place, supported by advanced monitoring technologies and comprehensive staff education.
GDPR compliance imposes significant obligations on Maltese licence holders, including strict data governance, enhanced security protocols and in many cases the appointment of data protection officers. At the same time, marketing regulations continue to tighten around responsible messaging and the targeting of vulnerable individuals. Beyond compliance-related obligations, the overall cost of operating under a Maltese licence is rising. Licence fees, gaming taxes, key functions and general operational expenses have seen significant increases and continue to place pressure on operational budgets. These challenges are further compounded by persistent inflation trends across the eurozone, which continue to erode margins and intensify cost pressures.
Perhaps the most consequential shift is the intensified competition from other licensing jurisdictions. While local licensing is diminishing the reach of an MGA licence within the EU, emerging jurisdictions such as Anjouan or Tobique actively market themselves to start-ups and smaller operators as offering lower initial costs, simpler application processes, quicker market entry and zero or near-zero gaming taxes, directly addressing the pain points associated with more established and regulated frameworks.
Current trends and licensing strategies
The MGA has acknowledged these shifts in its enhanced oversight strategy for 2025, focused on risk-based resource allocation and increased collaboration with operators. The Authority is also currently conducting supervisory meetings aimed at better understanding the operational flows of their licensees. During these meetings, a number of licensees have expressed concerns that costs and compliance requirements are becoming prohibitive, to the point where they are considering selling or surrendering their licence.
Amid these pressures, many operators are reassessing their strategies in favour of a multi-jurisdictional approach, selecting jurisdictions according to their risk profiles and compliance capabilities. In practice, this often means securing licences in more accessible or less stringent jurisdictions – such as Anjouan – to accelerate market entry and generate early revenue while building the credibility and capabilities required to operate in regulated markets over time.
Most pursue a two-pronged approach, concurrently working towards obtaining an MGA licence, suggesting that a portfolio of licences has become a clear strategic necessity. While emerging jurisdictions offer clear tactical benefits, their current regulatory leniency is best viewed as a window of opportunity rather than a long-term advantage. Curaçao’s overhauled legislation not only mirrors Malta’s original framework but will most likely follow a similar trajectory, gradually implementing stricter controls and higher compliance standards over time.
Despite growing competition from emerging jurisdictions, the MGA licence remains a valuable asset, especially for tier-one operators. As regulations evolve further, holding an MGA licence will likely continue to provide long-term benefits, particularly for operators targeting highly regulated markets, with a focus on long-term credibility.
Yes, it is costly and complex. But it remains relevant.
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