If you hold a remote gaming license or a controlled skill game license then these new regulations, effective as of 1 January 2018, are going to affect you in one way or another in 2018. This article provides a summary of the salient points and clarifies certain issues which some might have found confusing.

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Gaming License Fees Regulations – LN 409 of 2017
If you hold a remote gaming license or a controlled skill game license then these new regulations, effective as of
1 January 2018, are going to affect you in one way or another in 2018. Existing licensees will continue paying
license fees and gaming taxes under the current fiscal structure till the 30 June 2018. As of 1 July 2018, all licensees
shall start paying gaming licence fees under the new regulations. A reconciliation shall then take place in order to
calculate the difference between what was due for the first six months of 2018 (under the current fiscal regime)
and the rest of the year under the new regime. We therefore strongly recommend that existing licensees start
calculating under the new fiscal structure as of 1st
January 2018 to be aware of any liabilities arising from potential
differences between taxes paid and compliance contributions due.
Please read the below summary for Class 1/2/3 and view the example cases. For further information please do
not hesitate to contact us.
Definitions
"Gaming revenue" means the aggregate stakes and wagers, inclusive of any bonus or other player incentives which
are comprised within any stake or wager, less an amount to be determined by summing up the aggregate player
winnings to the aggregate of any bonus or other player incentives which are comprised within the amount of
aggregate stakes and wagers, transacted under the terms of the license referred to in regulation 3(1) during a
license period and for Type 3 and Type 4 gaming services, gaming revenue means a charge, tournament fees and
other such like elements of revenue;
"compliance contribution" means the aggregate of the amounts, including where applicable the minimum amount
or the maximum amount, as the case may be, resulting from the application of the computational method
prescribed below;
Controlled Skill Game License
Under the proposed new Gaming Act and subsidiary legislation, these licenses will be classified as a Type 4 gaming
services. The new fixed annual license fee, which is non-refundable, will be set at €10,000. The Compliance
Contribution is a percentage of gaming revenue, as stipulated in the first schedule of LN 409, with a minimum of
€5,000 after the first year from obtaining the license. The good news is that these only become applicable from
the 1st July 2018. So, let’s worry about that later.
All Other Remote Gaming Licenses
The new regulations come into effect immediately as from 1st January 2018. This means that for the month of
January, and for any new licenses falling due for the annual fee in January, the new fees are now applicable.
The first, second and third schedule are where the fixed and Compliance Contributions are broken down by type
and turnover.
Whereas we are now used to referring to licenses as Class 1, Class 2 and Class 3 the new regulations speak about
Type 1, Type 2 and Type 3. The products covered are identical, so it should not be too confusing to get used to the
new definitions.

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For companies already operating, the fixed annual license fee is payable per company or corporate structure and
is set at €25,000 per license period (per year)
The Compliance Contributions, are an amount payable monthly as a percentage of gaming revenue for each type
of service. Each Type of gaming service has different tiered percentages applied and different minimum and
maximum amounts payable. These are stipulated in the First Schedule and Regulation 3.
In the administrative fees the only relevant and significant change is the license application fee and renewal fee
from €2,330 to €5,000 as from 1st July. However, keep in mind that soon only one license will be required.
How do I prepare for the new fiscal structure?
Step 1: Calculate the gaming revenue for every month as from 1st January 2018 based on the definition.
Step 2: Calculate the compliance contribution on the gaming revenue according to the type of gaming services
offered (Type 1, Type 2, Type 3).
Step 3: Allocate €25,000 for one B2C license irrespective of the number of Class 1/2/3 licenses held.

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Some examples:
Case 1
Situation prior to LN 409
Operator holding a Class 2 license.
Currently pays €8,500 per annum as a license fee and gaming tax at 0,5% of turnover per month up to a maximum
of €466,000 per annum.
Annual turnover at €20,000,000 with gaming revenue at €3,000,000 – Gaming tax paid throughout year:
€20,000,000 X 0,5% = €100,000
Total paid to MGA per annum = €108,500
Situation after LN 409
Operator holds a B2C license with Type 2 gaming services (sportsbook).
Fixed annual License fee: €25,000
Compliance Contribution: Gaming Revenue of €3,000,000 @ 4% = €120,000
Total paid to MGA per annum = €145,000

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Case 2
Situation prior to LN 409
Operator holding a Class 1 on 4 and a Class 2 licenses.
Currently pays €8500 X 2 = €17,000 in annual license fees.
Gaming taxes paid per annum on the Class 1 on 4 = €14,400 (€1200 per month)
Gaming taxes paid per annum on the Class 2 where turnover is €35,000,000 X 0,5%= €175,000
Total paid to MGA per annum = €206,400
Situation after LN 409
Operator holds a B2C license and offers Type 1 and Type 2 gaming services.
Fixed annual license fee: €25,000
Compliance Contributions for Type 1 assuming Gaming Revenue of €5,250,000:
€3,000,000 X 1.25% = €37,500
€2,250,000 X 1% = €22,500
Compliance Contributions for Type 2 assuming Gaming Revenues of €4,750,000:
€3,000,000 X 4% = €120,000
€1,750,000 X 3% = €52,500
Total Paid to MGA per annum = €257,500

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Case 3
Situation Prior to LN 409
Operator holds seven Class 1 on 4 licenses and one Class 2 license
Currently Pays €8500 X 8 = €68,000 in annual license fees
Gaming Taxes paid per annum for seven Class 1 on 4s = €1200 X 7 X 12 = €100,800
Gaming Taxes paid per annum for Class 2 license assuming Turnover of €100,000,000 = €466,000 (maximum tax
payable)
Total Paid to MGA per annum = €634,800
Situation after LN 409
Operator holds a B2C license with Type 1 and Type 2 gaming services.
Fixed annual license fee: €25,000
Compliance Contribution on Type 1 assuming Gaming Revenue of €15,000,000:
€3,000,000 X 1.25% = €37,500
€4,500,000 X 1.00% = €45,000
€5,000,000 X .85% = €42,500
€2,500,000 X .70% = €17,500
Compliance Contribution on Type 2 assuming Gaming Revenues of €12,500,000:
€3,000,000 X 4% = €120,000
€4,500,000 X 3% = €135,000
€5,000,000 X 2% = €100,000
Total Paid to MGA per annum = €522,500

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Compliance Contribution calculation
License Minimum contribution payable Maximum contribution payable
Type 1 € 15,000 € 375,000
Type 2 € 25,000 € 600,000
Type 3 € 25,000 € 500,000
Gaming revenues generated during the relevant reference month shall be aggregated to the gaming revenue
generated from the corresponding type of gaming services during each of the prior reference months of the
relevant licence period. This means that in March 2018, the gaming revenues of January and February will be
added as well. Overpayments will be set-off.
Assuming Type 1 gaming company with aggregate gaming revenues of €3,115,000 from January till March 2018:
Month
Gaming revenue for
the month
Aggregate Gaming
revenue
Compliance Contribution
(Aggregate)
Compliance Contribution
payable to MGA
January €1,200,000 €1,200,000 €15,000 €15,000
February €1,800,000 €3,000,000 € 37,500 €22,500
March €115,000 €3,115,000 € 38,650 €1,150

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Summary
Part A - Type 1 gaming services
Compliance contribution for the Licence Period Rate %
For every euro of the first €3,000,000 1.25
For every euro of the next €4,500,000 1
For every euro of the next €5,000,000 0.85
For every euro of the next €7,500,000 0.7
For every euro of the next €10,000,000 0.55
For every euro of the remainder 0.4
Part B - Type 2 gaming services
Compliance contribution for the Licence Period Rate %
For every euro of the first €3,000,000 4
For every euro of the next €4,500,000 3
For every euro of the next €5,000,000 2
For every euro of the next €7,500,000 1
For every euro of the next €10,000,000 0.8
For every euro of the next €10,000,000 0.6
For every euro of the remainder 0.4
Part C - Type 3 gaming services
Compliance contribution for the Licence Period Rate %
For every euro of the first €2,000,000 4
For every euro of the next €3,000,000 3
For every euro of the next €5,000,000 2
For every euro of the next €5,000,000 1
For every euro of the next €5,000,000 0.8
For every euro of the next €10,000,000 0.6
For every euro of the remainder 0.4
This article was written by Alan Alden and Owen Baldacchino for Kyte Consultants. At Kyte, we provide a wide
range of advisory services to companies heavily reliant on information and communications technologies to
achieve their business objectives. Click here for further information.
Contact: alan@kyteconsultants.com , owen@kyteconsultants.com