Coronavirus and the Gaming Industry – Malta Gaming Authority’s Objective to Lessen COVID-19 impact

Dr Josef Cachia and Dr John Caruana  -  22/April/2020

While the gaming sector has been described at times as being recession-proof, it is not invincible to the disastrous effects of COVID-19 and like almost any other competitive sector, these are indeed trying times for a number of gaming providers. The Malta Gaming Authority (MGA) has taken note of the issue and has issued a couple of measures with the objective of lifting (or rather ‘deferring’) some of the COVID-19 financial burden which the gaming providers are facing. The measures are directed to those entities vested with a Type 2 Gaming Licence, and therefore to those who offer gaming services like fixed odds betting, pool betting and spread betting; they consist in the following:

  1.  Payment of compliance contribution and gaming tax owed to the MGA for revenue generated from activities classified as Type 2 for the months of March, April and May 2020 will be deferred by 3 months. For clarification purposes, this entails that whilst the month of March would have previously become due by April, this will now be due in July; April contributions will be due in August, and May will be due in September 2020;
  2. For licensees that offer solely and exclusively Type 2 gaming services and for whom the payment of the fixed annual licence fee falls due in March, April or May 2020, the payment of such licence fee is equally deferred and is to be paid in line with the deferral of the contributions highlighted in (i).

MGA has also sought to remind licencees that where their activity generated from a gaming vertical has come to a halt or has lessened to amounts that do not justify the continued operation of such vertical, the authorisation to operate that vertical may be voluntarily suspended by the licencee due to the extenuating circumstances brought about by the current pandemic. Lastly, MGA referred as well to a couple of other COVID-19 schemes which are currently present, and which aim to provide some financial relief to gaming providers:

Licensees that are facing difficulties due to a sudden, acute liquidity shortage may wish to explore the possibility of accessing financing for their working capital requirements from their bank in line with the guarantees provided by the Malta Development Bank’s COVID-19 Guarantee Scheme

Moreover, licensees are also reminded that any company that has seen a significant downturn in turnover, which would certainly be satisfied if it has seen a drop in sales of circa or exceeding 25%, may apply for a deferral of payment of Provisional Tax, VAT, and National Insurance contribution on salaries as announced by Government over the past weeks

Should you require any clarification as to how the MGA deferral scheme shall affect your gaming business or as to whether you, as a gaming licensee may benefit from it, please do not hesitate to contact KSi Malta. Our team of legal professionals are always happy to help. In addition, we can provide you with any other required assistance which you may need to apply for any COVID scheme which has been announced by the Government.   
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