Malta To Give Sports Betting Operators VAT Exemption In 2018

December 13, 2017 by Natalie Whitehead

The Maltese government recently announced that gambling on the outcome of an event such as sports betting will soon be exempt from value added tax (VAT).

As reported by the Malta Times, a noticed published in the Government Gazette confirmed that starting on January 1, 2018 wagering will become exempt from VAT.

The notice goes on to say that wagers on virtual and actual sporting events, lotteries, competitions, and even how natural disasters and index performance will no longer be subject to VAT.

Services offered by bookmakers, as well as “equivalent facilities” are also now VAT exempt.

Casino operators and online gambling operators will not be able to celebrate as the government has made it clear that gambling on the outcome of casino-style games such as poker, as well as other games of chance where a random number generator determines the outcome will not be exempted from VAT. Gambling services that use remote technology will also not be VAT exempt.

The Maltese notice comes at a time where the country's gambling industry is gearing up for a number of regulatory changes. The Malta Gaming Authority (MGA), the agency tasked with regulating the country's gambling industry, published a white paper which proposed several reforms. One of the major reforms include the replacement of the current multi-license system with a system that would only grant two licenses depending on the type of activity of the applicant. The new proposed system would only require gambling providers and operators to obtain either a business-to- customer or business-to- business license as opposed to the several different required licenses, the current system requires.

Some of the other reforms being put in place are amendments to the nation's Prevention of Money Laundering Act which aims to strengthen Malta's anti-money laundering policies. The amendments have already been approved and signed by Malta's president Marie-Lousie Coleiro Preca. Many believe that these amendments stem from criticism that the country has failed to implement harsher anti-money laundering policies in the past.

Malta is planning a number of reforms for their gambling industry but it is still not clear how it would impact government finances. Records show that collected VAT makes up about 7 percent of the annual gross domestic product or Malta. The Maltese government collected more that €700 million in VAT. The gambling industry in Malta contributed 12 percent to the economy during the first half of 2017 and removing VAT restrictions on sports betting will negatively impact government revenues.