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posted 3 months ago
Malta and the Isle of Man – although the latter has seen a recent decline in popularity – are known as top-tier gambling licenses in the iGaming world. They both continue to serve as a role model for jurisdictions looking to establish their own licensing framework.
With these two licenses being the industry’s top-tier, many gambling founders looking to set up under the reputable framework often overlook other jurisdictions that tick the same boxes with their licensing setups.
In fact, the list of Estonia gambling license advantages is just as strong as those two headline licensors and deserves more hype as a viable gambling license option.
As outlined in our article, not only do many of the Estonia gambling license advantages mirror those of Malta and the Isle of Man, but some even exceed the benchmarks set by the duo.
Each jurisdiction has its own approach to the regulation of gambling and licensing.
The Estonia gambling license has a modular structure and a two-step process. B2C operators can apply for separate activity licenses for different verticals, such as games of chance, games of skill, and toto. After obtaining the activity license, they must then apply for an operating permit in Estonia before starting the actual activity. This structure allows gambling operators to expand into new categories over time by adding activity licenses as the business grows.
In Malta, the gambling license system is category-based. It has four license types: Type 1, Type 2, Type 3, and Type 4 licenses, which individually cover the different game types. The operators should select a specific license that will match their activity, rather than apply for multiple separate activity licenses.
The Isle of Man gambling license has a flexible model with several options:
The activity license in Estonia is valid for an indefinite period of time. It provides an operator with the right to apply for the operating permit. The operating permit is then issued for a fixed term from 5 to 20 years, depending on the type of games covered.
By comparison, a Malta gaming license is valid for 10 years, while the Isle of Man license is issued for 5 years.
Notably, all three licenses remain valid for at least 5 years, whereas many other offshore gambling license options require annual renewal.
An advantage of the Estonia gambling license compared to the other top-tier jurisdictions is a relatively fast approval process.
The aforementioned timeframes reflect an ideal scenario and may vary depending on the completeness of the application and the regulator’s requests.
In Estonia, depending on the activity type, you’d need to pay €3,200, €31,960, or €47,940 as a one-off payment, followed by the €3,200 operating permit every 5 or 20 years. More detailed information could be found here.
Obtaining a Malta gaming license could be relatively cost-efficient at the entry stages. There’s a €5,000 one-off payment followed by a €25,000 annual fee for Type 1–3 or €10,000 for a Type 4 license. Nevertheless, operators looking to obtain a Maltese license should keep in mind that the cost can reach around €150,000–200,000, including maintenance.
The Isle of Man charges a £5,250 one-off (~€6,000) application fee for the gambling license application and then £5,250 (~€6,000), £36,750 (~€42,400), or £52,500 (~€60,500) per year based on a license type.
In Estonia, the remote gambling tax is currently six percent of GGR for B2C operators of games of chance and toto. The government announced plans to reduce it gradually to 4% by 2028. There’s also a 22% corporate income tax (CIT) payable on distributions only.
For the Isle of Man license holders, gambling duty is based on GGR: “stakes minus winnings” or “retained profit,” depending on the type of gambling activity. The rate is between 0.1% for GGR of more than GBP 40 million and 1.5% for GGR of less than GBP 20 million, with the 0% CIT.
In Malta, the standard corporate income tax rate is 35%, though many companies benefit from a refund mechanism resulting in an effective rate of just 5%. Further, the jurisdiction has a 5% charge on B2C businesses on revenue from Malta-based players and requires a compliance contribution of between 0.4% and 4% for each euro of the first €2 million to €3 million, depending on the license type.
Operators with Estonian and Maltese licenses are highly trusted by the players across the EU and widely accepted by leading EU software providers. However, this should not be interpreted as a legal recognition of these licenses by other EU member states, as cross-border gambling regulation in the EU remains complex and fragmented.
Similarly, the UK gaming market access is not granted based on an Estonian or Maltese license; operators would still require a UK Gambling Commission license to start offering services within the country. The same principle applies to the Isle of Man license, even though it is whitelisted by the United Kingdom.
Despite the lack of automatic cross-border recognition, these licenses’ regulatory frameworks are considered influential for designing or improving local licensing systems. At the same time, Estonian licensed operators may benefit from the Maltese recognition procedure, allowing potential acknowledgment of the Estonian license in Malta under certain conditions.
As a rule of thumb, Inteliumlaw experience shows banking access of holders of an Estonia gaming license is comparable to Malta.
While some banks may still prefer Maltese-licensed operators, the acceptance level of the Estonian gaming license is very high and, statistically, exceeds that of the Isle of Man.
From the players’ perspective, the difference between Estonia, the Isle of Man, and Malta is minimal. Each of them maintains comparable standards regarding player protection, anti-money laundering compliance, and promotion of responsible gambling practices.
While Malta remains the gold standard and the most sought-after license for operators, Estonia now emerges as an attractive alternative. The licensing process is more straightforward and cost-effective – albeit its recognition still slightly falls behind Malta. Estonia certainly deserves more attention as a credible and advantageous gambling licensing jurisdiction.
If you are interested in getting the Estonia gambling license for your business and wish to navigate the process with professional support, contact Inteliumlaw today.
posted 3 months ago
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