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Malta Fights For EU Free Market Rules In E-gaming

by Ulrika Lomas, Tax-News.com, Brussels

16 June 2010


Malta has disagreed with the conclusions of an EU Competitiveness Council meeting which adopted a definition of illegal gambling as: “gambling in which operators do not comply with the national law of the country where services are offered, provided those national laws are in compliance with EU treaty principles".

European Commissioner Michel Barnier has announced the issue of a Green Paper to consult on internet gambling regulation for the autumn of 2010, which will be the first time member states have been consulted on gambling since 2006, at which time the gaming sector was excluded from the Services Directive.

Malta, which has developed a highly successful electronic gaming industry, has taken note of some recent European Court of Justice rulings that apparently support attempts to restrict Europe-wide regulation in favour of local monopolies, and of national legislation which appears to contravene the principles of the freedom of services, such as that now in force in France, and fears that it may suffer if a new, illiberal regime is voted through based on the Green Paper.

Before the decision was made to apply to join the EU in the 1990s, Malta was essentially an offshore jurisdiction, relying on tourism and tertiary services to fuel its economy. Malta joined the EU in 2004, and became the first EU member state to regulate internet gaming in May 2004 with its Remote Gaming Regulations under the Lotteries and Other Games Act 2001. Malta has subsequently attracted more than 250 remote gaming companies and issued over 350 licences. These businesses employ about 5,200 people in Malta, and service around 10% of the world's internet gaming market. They generated tax revenues for the government of EUR26.9m in 2008 and EUR52.5m in 2009.

The Maltese government says that the Competitiveness Council's definition does not properly take into account that Malta has a very advanced regulatory regime in full compliance with EU legislation.

A comprehensive report in our Intelligence Report series examining the new possibilities that offshore e-commerce open up for business, and analysing the offshore jurisdictions that have led the way in offering professional e-commerce regimes for international business, with a particular focus on e-gaming, is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report6.asp
TAGS: compliance | tax | business | European Commission | Malta | gambling tax | commerce | law | offshore | internet | e-commerce | gambling | licensing | legislation | dividends | regulation | European Union (EU) | Europe

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