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Malta: remote gaming licensing,

company incorporation and maintenance, tax


and other services

For the consideration of Betgaming.com

8 January 2018
About us
• WH Partners (whpartners.eu) is a leading law firm in Malta and with
consulting rooms in London (UK) focused on new economy industries, with
expertise and experience in gaming & gambling, e-payments & e-money,
software research & development and related industries. In addition to
providing specialised and in-depth advice on matters specific to these
industries, we have a well established practice advising clients on corporate
matters (in particular M&A and corporate finance), intellectual property, data
protection, ICT, tax and financial services matters.

• We form part of AllyLaw (ally-law.com), a global legal services network of


over 1,300 lawyers and advisors, who work with clients where they are today
and where they want to be tomorrow: at home, across borders and around
the world.

• Our clients are international. We advise in English, Spanish, French, Italian,


Russian and Ukrainian (and our support personnel collectively speaks
English, Italian, Spanish, French, Russian, Serbian, Czech and Dutch).

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Our Gaming Team
• Olga Finkel, Partner and the founder of the firm, is a recognised gambling
and technology lawyer. She is ranked as a top-tier lawyer by Chambers &
Partners. Olga is also listed as a world-wide top Sports & Entertainment
and Internet & e-Commerce lawyer by Who’s Who Legal, the research arm
of the International Bar Association. Besides being a qualified lawyer, Olga
holds a Master’s degree in Computer Science. She is also a lecturer in
Gaming Law at the University of Malta.

• James Scicluna, Partner, is a Solicitor of the Senior Courts of England and


Wales as well as a Malta Advocate. James has worked in private practice as
a corporate and commercial lawyer with Jeffrey Green Russell in London
and has also served as General Counsel of European online gambling
brands Betclic and Expekt. James is ranked in the top 50 Global Gaming &
Gambling lawyers by Chambers & Partners. He is also listed by Who’s Who
Legal in the Sports & Entertainment category. James is a lecturer in
Gaming Law at the University of Malta.

• Ruth Galea, Partner, is a corporate, financial services and taxation lawyer.


Her principal areas of specialisation are corporate finance, corporate
governance, corporate restructuring (with a particular focus on joint
ventures and mergers & acquisitions), credit and financial institutions,
taxation (direct and indirect) and contract drafting and negotiation. She
also regularly advises on matters relating to investment funds, capital
markets, gaming law and employment law.

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Our Gaming Team
• Joseph F. Borg is an Advocate and a Senior Advisor for WH Partners. Before
joining the Firm, he headed the Regulatory Division of the Malta Gaming
Authority (formerly Lotteries & Gaming Authority) and was an elected trustee of
the International Association of Gaming Regulators. Prior to that, he was also an
in-house Legal Counsel of Vodafone Malta Limited. Joseph holds a Masters
Degree in IT and Telecoms Law with Distinction from the University of
Strathclyde in Glasgow. He is a lecturer in Gaming Law at the University of Malta.

• François Peglau is a Peruvian lawyer and a Senior Advisor for WH Partners. His
focus is in e-gaming regulation and international tax. Before joining the Firm,
François was Regulatory & Licensing Manager at Betclic Everest Group. Prior to
that, he was a Senior Analyst for Gambling Compliance in London, providing
regulatory advice for e-gaming in several countries including Latin America and
India. Previously, he was a Tax Manager at Deloitte in Peru. François holds a LLM
in Taxation Law from the London School of Economics.

• Robert Skalina is a Czech Advocate as well as a Registered European Lawyer in


Malta, based in Prague and working in Malta regularly. He is a financial services
and corporate lawyer and has practiced in the Czech Republic and the United
Kingdom. Prior to joining the Firm, Robert was Head of Legal at a London-based
investment advisor active throughout EMEA region. Prior to that, he worked for
one of the largest retail banks in the Czech Republic and at the Czech Ministry of
Informatics. Robert graduated with an LLM cum laude from the London School of
Economics. He holds a Master of Laws degree from the Charles University in
Prague.
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Our Gaming Team
• Robert Zammit, Senior Associate, is a regulatory and licensing lawyer with
particular expertise in licensing of gambling businesses and regulatory compliance
in the gambling sector, intellectual property, information security, privacy and data
protection. He also advises on direct taxation matters relating to gaming and
gambling, in particular internet gaming. Robert holds a Doctor of Laws degree
from the University of Malta.

• Ramona Azzopardi, Senior Associate, specialises in both direct and indirect tax
issues in cross-border transactions. She regularly advises clients in the gaming &
gambling industry on their cross-border tax exposure, VAT, tax compliance.
Ramona holds a Master’s in Financial Services from the University of Malta and
holds a Doctor of Laws degree from the University of Malta and a Diploma in
Taxation from the Malta Institute of Taxation. Ramona is a regular speaker at tax
conferences and often contributes articles to prominent publications.

• Samuel Gauci, Senior Associate, specialises in remote and land-based gaming,


both from a legal and business perspective. Prior to joining WH Partners, Sam was
Head of Legal Affairs at the Malta Gaming Authority (MGA), where he and his
team were responsible for legal matters referred to the Legal Directorate from
within the MGA and from outside consultants, advisors and licensees. He also
held the position of Acting Chief Officer, with responsibility for all matters
pertaining to licensing, requests for approvals, renewals and terminations of
licenses. Sam holds a Doctor of Laws degree from the University of Malta.

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Our Gaming Team
• Talisa Krauer, Associate, is a Malta Advocate whose principal areas of practice are
gaming and corporate law, with a specialisation in data protection and privacy law.
Talisa has gained an extensive understanding of the gaming industry over the
years, having worked in the industry for six years prior to joining WH Partners.
Talisa holds a Doctor of Laws degree from the University of Malta.

• Tiffany Farrugia, Associate, is a gaming lawyer whose main areas of practice


include the regulation and licensing of gaming companies in Malta, blockchain
technology, and the setting up of Initial Coin Offerings. She has also assisted with
and contributed to a number of publications concerning both gambling law and
blockchain. Tiffany holds a Masters of Advocacy degree from the University of
Malta.

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Our approach to providing legal services
• Our philosophy is that all of our lawyers must have an understanding and a passion for our clients’
industries to appreciate and handle the issues our clients face.

• We are proactive rather than reactive. We endeavour to pre-empt problems for our client
whenever possible. We keep the client updated on progress of matters at hand.

• We focus on achieving a desired outcome, providing a solution to a problem in a practical and


most suitable way, rather then going through a process for the sake of it.

• We are reachable and available. You can call us on office numbers, mobile numbers, Skype, you
can send us emails, texts or come to our office. We understand that there may be situations when
it is important for you to call us, even at odd hours, due to emergencies or time differences.

• We endeavor to be as cost effective as possible, making use of junior staff with lower charge out
rates for tasks which do not require handling by senior staff - typically matters which are not of
strategic relevance. We can assist clients with formulating and managing a legal budget for third
country counsel. We work within cost parameters and reporting schedules agreed with our clients
in order for them to keep control over their legal spend.

• We can act as your company directors, fulfilling the duties and the responsivities of the role.

• We can act as an ‘external general counsel’ and provide seamless advice and coordination
between teams in different jurisdictions

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Our experience:
Selected highlights

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Gaming & Gambling
• We have advised governments, public bodies and regulators of EU members states on developing
a framework for the regulation of remote gambling which is in line with EU law.

• We have advised some of the leading remote gambling brands on obtaining licences and
establishing a presence in Malta and in the United Kingdom and currently advise several Malta
licensees which have a very significant presence on the island.

• We have advocated the recognition of new products and business models with regulators and
obtained their licensing, at times following amendments to applicable regulations driven by our
clients and us.

• We have advised and continue to advise some of the largest gambling machine producers and
distributors in the world on their online and offline operations in multiple jurisdictions.

• We have co-drafted a number of regulations and amendments to laws. We are currently working
on the overhaul of the Malta gaming regulatory regime for the Malta Gaming Authority. We also
have experience in making oral and written submissions in front of the European Court of Justice
in Luxembourg.

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Corporate, Corporate Finance, M&A
• Over the past few years we have advised on some of the largest mergers and acquisitions in the
gaming industry involving Maltese companies, for overall value well in excess of €2.5bln.

• We have assisted with the process of dematerialisation Maltese company shares and subsequent
direct affiliation of shares with a central securities depository and listing on AktieTorget and
NASDAQ First North. We were the first firm to advise on this process in Malta with the Malta
Stock Exchange acting as a Central Securities Depository in Malta.

• We have acted on the conversion of Malta private limited liability companies into public limited
liability company in preparation for an IPO on major European stock exchanges. We advised a
number of companies on IPOs and on preparatory stages to an IPO.

• Advising a minority shareholder in a Malta private limited liability company on bringing an action
for unfair prejudice against the directors of the company on the basis that company’s business was
being conducted in a manner prejudicial to our client’s and the company’s interests.

• We advise companies on funding including public funding, private placements, crowdsourcing, and
venture capital finance.

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Sponsorship, IPR and Image Rights

• Negotiating, on behalf of gaming operators, sponsorships of some of the


leading sports clubs in Europe.

• Negotiating image rights agreements for gaming operators with several well
known sports and TV personalities.

• Negotiating some of the principal software licensing agreements in the


remote gaming industry in Europe on behalf of our clients.

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Malta remote gaming licensing:
a summary of the process and statutory fees

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Key facts (1): Licence Classes***
Class 1 Class 2
for games broadly based on repetitive Fixed Odds Betting (every sport, non-
random events (casino-type games, fixed sport events, where the player bets
prize lotteries, scratch cards, etc. – where against the operator and the operator
the operator takes gaming risk) takes gaming risk)

Remote gaming licence


is granted for 5 years

Class 3
Class 4
for abetting and promoting gaming
Software Platform Providers hosting and
(Poker, Bingo and other pool and P2P
Managing B2C EEA Licensees (B2B
Games – where the operator does not
licence)
take gaming risk)

*** Please refer to pages 25 -27 for a brief explanation of how this will change upon the
coming into force of the new Maltese Gaming Law later this year.

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Key Facts (2): Gaming Taxes ***
Class 1
Fixed gaming tax per month Class 2
€4,660.00 per month during the first 6 months and Gaming tax - % on turnover
subsequently €7,000.00 per month for the entire
duration of the licence period. However, in case
0.5% on the gross amount of bets accepted
where a casino operator (under Class 1 licence)
operates from the host platform (under Class 4
licence) it is € 1,200.00 per month.
Gaming Tax Cap
€466,000.-
per licence per annum Class 4
Class 3
Gaming tax - % on profits Fixed gaming per month

5% of the commission (net revenue) (after deducting NO TAX for the first 6 months of operation;
bonuses, intermediaries’ commissions and payment € 2,330.00 per month for the subsequent 6 months;
gateway processing fees) thereafter € 4,660.00 per month

*** Please refer to pages 25 - 27 for a brief explanation of how this will change upon the
coming into force of the new Maltese Gaming Law later this year.

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Licensing process
Prepare ALL documentation and incorporate the
company to act as the licence applicant

Submit the licence application and all


documentation to the MGA, respond to arising MGA
queries, if any

Once the application approved (approx. 4 months) -


> setup technical infrastructure (within 2 months),
undergo a systems review

Once the licence is granted by the MGA -> Go live


with the operations (total time from application
submission approx. 5-7 months)

Carry out certification of the operation (within 1 year


after licence grant)

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Key Facts (3): Licence & Compliance Cost ***

Application fee Licence fee, per


(one-off), per licence per
licence: annum:
€2,330.- €8,500.-

Certification
Systems review (within 1 year
fee (one-off), per from grant of
licence: licence and
before renewal),
€2,500.- per licence:
€3,500.-

*** Please refer to pages 25 - 27 for a brief explanation of how this will change upon the
coming into force of the new Maltese Gaming Law later this year.

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What WH Partners can assist you with
Gaming & Contractual &
Tax & Corporate Accounting Employment Other legal services
Compliance Corporate
•Full MGA licensing • Tax & VAT advice •Book-keeping •Contract drafting •Obtaining • Assistance with
process assistance, (including VAT •Corporate tax and negotiation necessary permits obtaining Maltese
including providing 2015 changes) calculations (outsourcing, for employees citizenship by
of documents’ • Advice on VAT •VAT return affiliates, payment •Employee investment
templates calculations solutions, software relocation to
implications for providers, game • Financial services
•MGA reporting •Acting as Malta
gaming suppliers, office licensing,
•Assistance with companies outsourced CFO •Employment including e-
compliance audit lease, sponsorship, contracts
• Advice on gaming- •Payroll calculation etc) payments, e-
•Player complaints •Assistance with
related VAT risk •Sale and purchase money institution
handling employee disputes
mitigation of assets • Investment
•AML compliance •Employment-
measures contractual and services licensing
•UK licensing related filings
• Corporate filing due diligence • Licensing of
•Data Protection • Tax & VAT filings assistance binary options
compliance
• Acting as products
•Acting as Key
company • Ship/yacht &
Official/Director
secretary aircraft
•MGA approvals
procedures • Tax & corporate registration
structuring • Litigation and
• Providing dispute resolution
registered office
• Corporate tax
refund claims

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Schedule of fees

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Remote gaming licensing
Licensing stages & our Time frame Professional fees * Statutory costs
services

Work leading to the submission of the licence Normally 4-6 weeks, but €18,000 €2,330
application and the application submission depends on client

Initial consultations, explanation of the licensing


process, corporate and operational structures
required; explanation of the licensing forms; provision
of the relevant templates or review of the structure of
the drafts of the business plan and technical
submissions; providing assistance with the operational
manual from the regulatory & compliance
perspective; collating all required due diligence
documentation, filing licence application with the
MGA.

*A company should be incorporated at this stage - see


‘Company Incorporation’ slide for timings and fees.

Work during the licensing stage Normally, 3-6 months €3,500 -

Following up with the MGA to ensure that it is dealt


with by the MGA in as expedient a manner as possible;
providing clarifications and further explanations as
required.

*Professional fees for the assistance with obtaining a gaming licence are subject to the following conditions:
1. All fees are stated excluding VAT, if applicable.
2. All fees are quoted for one licence.
3. Fee is payable as follows:
1. 50% of each step above – on the commencement of work for that step and
2. 50% on the completion of work for that step

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Remote gaming licensing
Licensing stages & our Time frame Professional fees* Statutory costs per
services license
Partial systems review Depends on client. €3,500 €2,500

Assistance during MGA partial system review;


obtaining VAT registration / exemption

This fee excludes travel and other costs that may be


associated with such system review.

Annual licence fee €8,500

Total amount €25,000 €13,330

More than one gaming licence application €2,000 – € 8,000 (depending on the -
simultaneously nature of the licence)

The statutory costs quoted above are applicable per


licence.

*Professional fees for the assistance with obtaining a gaming licence are subject to the following conditions:
1. All fees are stated excluding VAT, if applicable.
2. All fees are quoted for one licence.
3. Fee is payable as follows:
1. 50% of each step above – on the commencement of work for that step and
2. 50% on the completion of work for that step

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Company incorporation (one-off fees)
Description Professional Statutory Comments
fees * payments
Incorporation of a Maltese company €2,800 per company Incorporation of the company includes drafting all
company formation documents(assuming a standard
form and that shareholder agreements are drafted
separately), submitting all documents to the Registry of
Incorporation of a subsequent Maltese company €2,250 per every subsequent Companies, obtaining official authenticated copies of
where the involved parties are the same company the company documents, obtaining the registration
certificate for the company.

Opening of a bank account Standard hourly rates We will also liaise with a local bank of your choice in
(Minimum charge of €1,250) order to open a bank account for the company.

Registration fees to Registry of Companies for a - €245 (minimum per The fees are for a company with minimum authorised
company with the minimum share capital company) up to a share capital. The minimum share capital to
(approximately) maximum of circa incorporate a company in Malta is €1,200. The
€2,250 for companies minimum share capital for the operation of a remote
with authorised share gaming licence in Malta is the following, respectively
capital in excess of per class of licence:
€2,500,000 Class 1: €100,000
Class 2: €100,000
Class 3: €40,000
Class 4: €40,000
If applying for multiple licences, the requirements
above are cumulative, up to a maximum authorised
share capital of €240,000.
The statutory fees herein quoted vary depending on
the authorised share capital of the company.

*Professional fees stated above are subject to the following conditions:


1. Fees are stated excluding VAT, if applicable.
2. Fees are stated for one company and one bank account
3. Fees for incorporation of a company and opening of a bank account are payable in advance

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Company maintenance
Description Professional Statutory Comments
fees * payments
Provision of Company Secretary € 1,200 per company The fee includes taking on the responsibility of company
(yearly) secretary, submission of annual return (a compulsory
yearly filing), issuing share certificates and keeping the
company's compulsory registers in terms of the
Companies Act. Other work undertaken is charged at
normal hourly rate. Our acceptance to act will be
conditional on your entering into our standard form
“Company Secretary Agreement”.

Annual registration fee payable to the Registry of €100 - €1000 per company Statutory annual fee depends on the authorised capital
Companies of the company.

Provision of a registered office € 450 per company - Provision of a juridical address for the company,
(yearly) scanning / forwarding of mail and fax up to 5 documents
per month (excluding out of pocket expenses).

Provision of fiduciary shareholding Fiduciary Shareholding: - Provided through our fully-owned fiduciary company.
€ 1,750 per shareholder Our acceptance to provide these services will be
Provision of trustee services (yearly) conditional on:
Trustee : Available upon - Our understanding of the structure of the company,
Provision of foundation administrator services request trust, or foundation;
Foundation - Your entering into our standard form agreements for
administrator: Available the provision of fiduciary shareholding, trustee
upon request services, or foundation administration services.

Provision of a director / Key Official Available upon request - Our acceptance to provide a director will be conditional
on:
- Our understanding of the business of the company;
- Your entering into our standard form “Directorship
Agreement”.

*Professional fees stated above are subject to the following conditions:


1. Fees are stated excluding VAT, if applicable.
2. Fees are payable yearly in in advance

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Tax compliance
Description Professional fees * Statutory Comments
payments
-
Tax services on incorporation € 550 One time fee including registration of company for
Corporate Income Tax purposes, registration of
shareholders for refund purposes, applying for duty
exemption where applicable.

Annual Tax Return €550 per holding company (yearly) Per company

€600 per trading company (yearly)

‘Start-Up’ Registration Package for employer €350 One time fee (per Employer)

Registration of employer with Inland Revenue


Department, Employment and Training Corporation
and Data Protection authority

Relocation Services €475 One time fee (per employee)

Residence permit, social security, employment


registration (EU citizens). Work permits (for non-EU
citizens) are charged at an hourly rate

Tax Refund Claim €250 Per claim form submitted

VAT Returns € 550 On a time spent basis subject to a minimum fee of


€550

*Professional fees stated above are subject to the following conditions:


1. Fees are stated excluding VAT, if applicable.

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Other services
Description Professional Statutory Comments
fees * payments

Provision of Accounting Services Available upon request - We can assist you with a wide range of services
including book-keeping, payroll and monthly
reporting. A quote will be provided, following an
indication on the volume of transactions.

Advice on VAT matters in relation to operation of ‘exempt €4,000.00


without credit’ remote gaming business with the view to
mitigate consequences on irrecoverable VAT

Legal services not listed above are charged on a per hour - Depending on seniority of lawyer doing work and the
basis: nature of the work as per Service Agreement.
Partner €380
Senior Advisor/Senior Associate €325 We aim to provide our services in the most efficient
Associate / Paralegal €120- €250 and time-sparing manner, and assure you that we will
Trainee Lawyer €80 – €120 continuously endeavour to keep billing on a time-
Corporate Support Personnel €100 - €150 spent basis to a minimum.
Administrative Support €50 - €80

*Professional fees for legal services charged on hourly basis are subject to the following conditions:
1. Fees are stated excluding VAT, if applicable.

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The future of Malta remote
gaming licensing:
a summary of the changes to the Maltese
Gaming Regulations

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Maltese Gaming Law Changes
• The four-class licensing system as outlined in this proposal is expected to be repealed and replaced with the following
regime on or around 1 July 2018 (“Implementation Date”):
 Licence Types: There will be two types of licences available to remote gaming operators: either (i) a Business-to-
Consumer (“B2C”) licence, or (ii) a Business-to-Business (“B2B”) licence;
 Grandfathering: Licence-holders holding any Class 1, Class 2, or Class 3 licences on the Implementation Date will
automatically convert to a B2C licence, whereas Class 4 licence-holders will automatically convert to a B2B licence on
the Implementation Date;
 Licence Term: The licence term shall be extended to 10 years instead of 5 years;

• Transitory Provisions: As of 1 January 2018, the New Licence Fees Regulations came into force. This effectively means that
the licence fees due under the new regime shall become applicable as of this date. However, there is a transitory period,
running until 30 June 2018, during which existing licence holders will continue to pay dues in accordance with the current
legal framework (as outlined in previous slides). New licensees will be subject to the requirements of the New Licence Fees
Regulations even during the Transitory Period. As of 1 July 2018, all licensees will have to comply with the New Licence Fees
Regulations. Following the end of the transitory period, dues paid by current licensees during the January – June 2018
period will be reconciled with the provisions of the New Licence Fees Regulations, either through a set off of overpaid
amounts, or by paying the difference if lesser amounts have been paid;

• Licence fees, administrative fees, gaming tax: An overview of the new licence fees, administrative fees, and gaming taxes
may be found overleaf.

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Licence Fees & Gaming Taxes
Licence Type Gaming Tax Administrative Fees Annual Licence Fees Variable Licence Fees

B2B Supply and No gaming tax applies For a B2B licence: €25,000 - €35,000, depending on annual -
management Licence application fee (one-time): €5,000 revenue
of material Licence renewal fee (one-time): €5,000
elements of a
game

Supply and No gaming tax applies - €3,000 - €5,000, depending on annual -


management revenue
of software

Supply and No gaming tax applies - €3,000 - €5,000, depending on annual -


management revenue
of the control
system

B2C 5% of gaming revenue of For a B2C licence: Fixed annual licence fee – €25,000 Depending on type of games provided, as
players physically present in Licence application fee (one-time): €5,000 payable 12 months in advance – in outlined below:
Malta at the time of the Licence renewal fee (one-time): €5,000 addition to this annual fee, the variable
provision of the service licence fee depending on the types of
games offered must also be paid.

Type 1 – 5% of gaming revenue of - - Variable licence fee for licence period :


Casino-type players physically present in €15,000 - €375,000, calculated as a
games, Malta at the time of the percentage of the gaming revenue
lotteries, provision of the service generated during the licence period
scratch cards

Type 2 – pre- 5% of gaming revenue of - - Variable licence fee for licence period -
live and live players physically present in €25,000 - €600,000, calculated as a
sports betting, Malta at the time of the percentage of the gaming revenue
fixed odds provision of the service generated during the licence period
betting

Type 3 – Player 5% of gaming revenue of - - Variable licence fee for licence period -
versus player players physically present in €25,000 - €500,000, calculated as a
games, poker, Malta at the time of the percentage of the gaming revenue
bingo, betting provision of the service generated during the licence period
exchange

Type 4 – Skill 5% of gaming revenue of - - Variable licence fee for licence period -
games players physically present in €5,000 - €500,000, calculated as a
Malta at the time of the percentage of the gaming revenue
provision of the service generated during the licence period

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Thank you

www.whpartners.eu

Malta London

Level 5, Quantum House, Level 2, The Podium


75, Abate Rigord Street 1 Eversholt Street,
Ta’ Xbiex XBX 1120 London NW1 2TN,
Malta United Kingdom