For more than two decades, a small Mediterranean island has been the address of choice for the online gambling industry. Some of the biggest iGaming companies in the world are run from Malta, and the country licenses an estimated one in ten online casinos worldwide. So why does so much of the industry choose this particular place? It comes down to the long history of Malta’s online casino market and the head start the country gave itself before other governments had decided what to do about online gambling. That legacy still shapes where people play today, including https://www.luckygem-casino.com.
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| Regulator | Malta Gaming Authority (MGA) |
|---|---|
| Online gambling regulated since | 2004, the first in the EU |
| Main licence types | B2C and B2B, covering game Types 1 to 4 |
| Licence validity | 10 years |
| Gaming tax | 5% on revenue from players based in Malta |
| Effective corporate tax | Around 5% via Malta’s refund system |
Malta was the first country with a casino licence
Towards the end of the 1990s, households were getting online for the first time, and the first online casinos appeared, usually a handful of basic slot machines. The catch was that the internet was open to everyone, so anyone could launch a gambling site, which made it hard to control. Some countries simply banned it, but a ban nobody can enforce achieves little. Malta took the opposite route. In 2001 it passed the Lotteries and Other Games Act and set up the authority that would become the Malta Gaming Authority (MGA). In 2004 it added the Remote Gaming Regulations and became the first EU member state to regulate online gambling with a dedicated framework.
Online casinos could operate worldwide from Malta
In the early years, an operator could base itself in Malta, hold an MGA licence, and reach players across much of Europe. Several other European countries recognised the MGA as a credible authority and tolerated their residents playing at Malta-licensed sites. The company had to be genuinely established on the island, but from that base it could serve a broad international audience.
Online gambling is now regulated in many countries
Today almost every country has its own gambling licence and rulebook. The UK has the Gambling Commission; the Netherlands opened its regulated market in 2021, where operators need a KOA licence from the Kansspelautoriteit and have their games checked by independent, accredited test labs (not by the MGA). So an MGA licence is no longer the European passport it once was. What has stuck is Malta’s reputation: the MGA is still treated as one of the gold standards in the industry, and players recognise the seal in a casino’s footer as a sign that someone serious is watching.
Operators still want to secure the MGA licence
Because the MGA name carries weight, operators and game studios still want it, and the licence is only available to companies established in Malta. That single fact explains much of the relocation: if you want the badge, you set up where it is issued. Earning the licence is no formality. Applicants go through a six-to-twelve-month vetting process covering finances, anti-money-laundering controls and a full systems review, with key people put through “fit and proper” checks. Games must be certified by accredited labs, player funds kept separate from company money, and there is a formal route for players to raise a dispute.
The tax climate is also favourable for online casinos
The other half of the story is money. Malta charges a gaming tax of 5% on revenue from Malta-based players, so an international operator pays it on only a slice of its business. Its headline 35% corporate tax is softened by a full imputation and refund system that, for many shareholders, brings the effective rate close to 5%. Lower operating costs give operators more room to compete on bonuses and payouts, though a game’s actual return is set by its design, not by tax policy. For players, tax on winnings depends on where you live: Malta does not tax them, but in many countries the responsibility falls on the player.