Why are Online Casinos Based in Malta? An Overview

Many people wonder why online casinos are based in Malta, and for a good reason. There are lots of online casinos in Malta whose parent companies and owners hail from abroad. In this article, we will explore this fascinating phenomenon and respond to the question that most gamblers are asking.

The Online Gambling Industry of Malta

If you have ever gambled online, especially if you’re European, chances are that you have encountered at least one, but possibly way more online casinos based in Malta. It’s natural for players who just begin gambling online to wonder why that’s the case, so we are going to investigate this today.

Let’s start by giving you some statistics about online gambling in Malta. It goes without saying that Malta is the gambling capital of Europe, so you can expect to see some interesting numbers.

We looked at the registry of licenced operators on the website of the main gambling regulator of Malta – the Malta Gaming Authority (MGA)– to see how many companies are active holders of a gambling licence. We counted 333 unique licensees which is a staggering number for one regulator.

It should be noted that this number includes online casinos, online sportsbooks and developers of gaming software, such as Wazdan, because the regulator does not differentiate between gambling operators and software providers.

Based on quantitative research conducted by the MGA itself, the number of players gambling at online casinos based in Malta continues to rise every year. The research concluded that 19.3 million people gambled at Malta-based online casinos in 2022, representing a rise of 8.7% in comparison to 2021.

This impressive number naturally translates to high profit for the smallest member of the European Union. While the MGA did not share its total revenue in the research paper, independent sources estimate annual revenue of the Malta Gaming Authority for 2022 to have been over 80 million euro.

This estimate does not include any profit made by the online casinos themselves. The gambling industry of Malta as a whole contributes 12% of Malta’s GDP or 2.16 billion per annum (2022 values).

Now that you have an idea of what massive industry we are talking about, it’s time to find out why Malta, once known primarily as a military base and home of the Knights Hospitaller, has become a haven for gambling operators and gamblers alike.

Reasons Behind Malta’s Gambling Status

There are a lot of reasons why Malta is home to so many online casinos today. As you might have guessed, it all started with legislation.

The Innovative Maltese Gambling Laws

In 2004, Malta became one of the first EU countries to explicitly legalise and regulate online gambling, establishing the Malta Gaming Authority to oversee it.

What’s curious about the 2004 Maltese legislation is that the UK had recently amended its gambling laws in 2003. The UK had just relaxed its existing gambling laws, legalised online gambling and founding the UK Gambling Commission. It’s no coincidence that Malta, a former British territory, soon followed suit.

Since 2004, Malta has amended its laws many times. The main law concerning gambling today is the Gaming Act of 2018 which was last amended in 2023.

Still, the laws don’t change very frequently and when they do, they don’t change significantly. This allows for a stable business environment because no business would move to a different country if said country had a volatile political system and ever-changing laws. Additionally, businesses have a lot more rights than they do in other European countries, with Malta representing a truly free market approach to gambling.

The main legislative reason why so many online casinos flock to Malta is naturally the tax. Malta taxes online casinos (and players alike) only 5%. Compare that to the British 21%, and you can guess why you don’t see more British online casinos.

The Malta Gaming Authority

Malta was arguably more successful in its pursuit of becoming the gambling capital of Europe than the UK, the other forward-thinking country in terms of online gambling. Besides the obvious difference in taxation, the well-known bureaucratic nature of the UK could not compare to the fast speed of processing applications afforded by the MGA.

Additionally, the cost of a licence from the MGA is much lower than that of other countries. Compare the Maltese licence cost of €25,000 to the €1.5 million licence cost in Hungary and you will see why casinos choose the former.

Still, people should not think that the MGA accepts every application it gets or that it’s unwilling to penalise business which do not comply with Maltese gambling laws. Over the years, the logo of the MGA on the website of an online casino has become a stamp of excellency. The MGA has become even stricter in later years as to the operators it allows in.

Players know they can trust a Malta-based casino precisely due to the complex vetting system of MGA, so online casinos not only look for lower taxes and a truly free market approach to gambling, they also want to be associated with the MGA.

European Union Member

Malta is a member of the European Union, so any online casino based in Malta is allowed to operate in the union. Some countries, such as the Netherlands, might require licencing from their own regulator, but not all do. This is a big advantage to not only European businesses, but also to foreign online casinos that want to operate in Europe.

Conclusion

To respond to the question of why are online casinos based in Malta, the answer involves relaxed gambling laws, low taxes, a stable economic system, and the professionalism of the Malta Gaming Authority.

FAQ

Thank you for reading our article on why are online casinos based in Malta. We hope we answered the question well. Below you can also find other popular questions relating to the topic: