MGA Compliance Contribution: Complete Rate Schedules for Types 1 to 4
Malta's MGA compliance contribution is a tiered GGR levy with hard floors and caps across all four B2C licence types. Understand the full rate schedules and payment rules.
The Malta Gaming Authority’s compliance contribution is a GGR-based levy applied to every B2C gaming service licensee, structured as a degressive rate schedule with a statutory minimum floor and a hard annual cap. The rates, floors, and caps differ across all four licence types, and they are set out in the Gaming Licence Fees Regulations (S.L. 583.03) and elaborated in Directive 4 of 2018 on the Calculation of Compliance Contribution. Getting these figures right matters operationally: the MGA’s enforcement register contains a consistent pattern of licence cancellations tied specifically to non-payment of compliance contributions under Regulation 3(1)(a) and Regulation 6 of S.L. 583.03.
What Is the MGA Compliance Contribution?
The compliance contribution is distinct from both the annual licence fee and the gaming tax. The MGA’s published guidance characterises it as “a contribution payable on qualifying activities, which are determined in the manner stipulated in Part A of the First Schedule of the Gaming Licence Fees Regulations (S.L. 583.03) by reference to the gaming revenue generated during the licence period from the gaming services offered.” In practice, it functions as a GGR-based levy that scales with an operator’s commercial performance but is bounded by a floor and a cap, so the effective rate compresses substantially as revenue grows.
The contribution is calculated monthly, with each calendar month constituting the reference month. The amount due must be paid before the expiration of the twentieth day of the month following the reference month. A licensee generating revenue across multiple approved game types calculates its contribution separately per type, applying the relevant rate schedule to the gaming revenue attributable to each qualifying activity.
Key obligation: The compliance contribution minimum floor does not apply to new operators until one full licence period has elapsed. Operators qualifying as start-ups under the Directive on Start-Up Undertakings benefit from a twelve-month moratorium during which no compliance contribution is due. Once the applicable deferral period ends, the minimum floor applies going forward.
The Four B2C Licence Types: What Activities Each Covers
The four types map to distinct commercial models that carry different regulatory risk profiles. The MGA’s FAQs and Directive 3 of 2018 set out the definitional logic.
Type 1 covers games of chance played against the house where the operator is exposed to gaming risk and sets the rules and odds. This captures online casino verticals including RNG slots, table games, live casino, scratch cards, and lotteries. The operator’s liability to pay winnings is direct and its profit derives from the margin built into the game design.
Type 2 covers fixed-odds betting, including live betting, where the operator again bears gaming risk by offering and accepting bets at stated odds. This is the standard sportsbook model. Pool betting and betting exchanges fall under Type 3, not Type 2, because the operator in those models does not take a position against the player.
Type 3 covers games of chance not played against the house, where the operator generates revenue by taking a commission or other charge based on stakes or prizes. This captures peer-to-peer games: poker, bingo, betting exchange, and other commission-based structures. The operator bears no gaming risk in the conventional sense, its revenue is a service charge on player-versus-player activity.
Type 4 covers controlled skill games as defined under Regulation 8 of the Gaming Authorisations Regulations. These are games in which player skill materially influences outcome, within a controlled regulatory framework. The Authority has full discretion to categorise a game that displays elements of more than one type according to its dominant nature.
Source: Malta Gaming Authority, FAQs (MGA website); Directive 3 of 2018, Gaming Authorisations and Compliance Directive, MGA Guidance Note, Licence Fees and Taxation (February 2023 v2).
How Are MGA Compliance Contribution Rates Calculated?
Each type uses a degressive rate schedule applied in ascending GGR bands. The rate for each band applies only to the revenue within that band, not to total revenue. The minimum floor operates as a guarantee: if the formula calculation produces a figure below the floor, the licensee pays the floor amount. If the formula produces a figure above the cap, the licensee pays the cap amount.
Directive 4 of 2018 on the Calculation of Compliance Contribution governs the detailed methodology for attributing gaming revenue to qualifying activities, including treatment of bonuses, jackpot contributions, and revenue generated from players in different geographic markets.
Type 1: B2C Casino and House-Banked Games
The floor for Type 1 is €15,000 and the cap is €375,000 per annual licence period. The rate schedule from the MGA’s published guidance note is as follows.
| GGR Band | Rate |
|---|---|
| First €3,000,000 | 1.25% |
| Next €4,500,000 | 1.00% |
| Next €5,000,000 | 0.85% |
| Next €7,500,000 | 0.70% |
| Next €10,000,000 | 0.55% |
| Remainder | 0.40% |
A Type 1 licensee generating €3 million in gaming revenue reaches a formula contribution of €37,500, already above the €15,000 floor. A licensee generating €30 million would produce a formula figure approaching the €375,000 cap, at which point further revenue growth no longer increases the contribution liability. Very large casino operators therefore pay a fixed €375,000 regardless of how far above that GGR threshold they operate.
Type 2: Fixed-Odds Betting
The floor for Type 2 is €25,000 and the cap is €600,000 per annual licence period. Type 2 carries the highest entry-point rate in the schedule, reflecting the operator-risk nature of the sportsbook model. The rate schedule is as follows.
| GGR Band | Rate |
|---|---|
| First €3,000,000 | 4.00% |
| Next €4,500,000 | 3.00% |
| Next €5,000,000 | 2.00% |
| Next €7,500,000 | 1.00% |
| Next €10,000,000 | 0.80% |
| Next €10,000,000 | 0.60% |
| Remainder | 0.40% |
The 4.00% opening rate on the first €3 million compares sharply with Type 1’s 1.25%. However, the schedule degresses rapidly: by the time GGR reaches €30 million, the blended effective rate is substantially lower than 4%. The €600,000 cap provides finality for large-volume sportsbook operators.
Type 2 licensees hit the €600,000 cap well before exhausting the highest rate bands, making the effective rate far lower than the 4.00% entry point suggests.
Type 3: Commission-Based and Peer-to-Peer Games
The floor for Type 3 is €25,000 and the cap is €500,000 per annual licence period. Type 3 covers the commission model: poker rooms, bingo networks, and betting exchanges. Because the operator does not take a position on game outcomes, its gaming revenue is the rake or commission charged on player activity rather than net player loss. The rate schedule, per the Gaming Licence Fees Regulations (S.L. 583.03), applies degressive bands to that commission-derived GGR figure.
The Type 3 floor is the same as Type 2 at €25,000, but the cap is €100,000 lower at €500,000. For compliance budgeting purposes, a poker-only or betting-exchange licensee should note that this cap applies to qualifying Type 3 activities in aggregate. If the same licensee also holds Type 1 or Type 2 approvals, each type’s contribution is calculated separately and each cap applies independently to its respective revenue stream. Operators should consult qualified legal counsel on the attribution methodology when revenue is generated through products that display characteristics of more than one type, given the Authority’s discretion in type categorisation.
Type 4: Controlled Skill Games
The floor for Type 4 is €5,000, the lowest across all four types, and the cap is €500,000. The significantly lower floor reflects the limited revenue base of most controlled skill game operations. Type 4 represents a small segment of MGA-licensed activity, the minimum share capital requirement for Type 4 licensees is €40,000, the same as Type 3 and half the €100,000 required for Types 1 and 2, which is consistent with the lighter entry threshold the MGA applies to this category.
The Type 4 schedule applies the same degressive band logic as the other types, and the €500,000 cap matches Type 3. Operators licensed solely for controlled skill games with modest GGR will benefit most from the low €5,000 floor, which compares favourably to the €15,000 floor on Type 1 and the €25,000 floors on Types 2 and 3.
Side-by-Side: Floors and Caps Across All Four Types
| Licence Type | Qualifying Activities | Annual Floor | Annual Cap |
|---|---|---|---|
| Type 1 | Casino (RNG, live), lotteries, scratch cards | €15,000 | €375,000 |
| Type 2 | Fixed-odds betting, live betting | €25,000 | €600,000 |
| Type 3 | Poker, bingo, betting exchange (commission-based) | €25,000 | €500,000 |
| Type 4 | Controlled skill games | €5,000 | €500,000 |
The highest potential total compliance contribution under an MGA B2C licence, across a single type, is therefore the Type 2 cap of €600,000. An operator holding authorisation for both Type 1 and Type 2 activities calculates each separately, so the theoretical combined maximum would be €975,000 (€375,000 + €600,000), with each type’s floor and cap operating independently.
What Triggers the Compliance Contribution Minimum?
The floor applies as a guaranteed minimum regardless of actual gaming revenue. If a licensee generates negligible GGR in a given period, the floor still governs. The one structural exception is the new-operator deferral: the MGA does not require the minimum compliance contribution from new operators until one full licence period has elapsed. Separately, operators who qualify as start-ups under Directive 1 of 2018 (the Directive on Start-Up Undertakings) receive a twelve-month moratorium on all compliance contributions.
Once the deferral period ends, the floor applies from that point forward. Compliance teams at pre-revenue or low-revenue MGA operators must budget for the floor as a fixed operational cost from the moment the deferral expires, irrespective of commercial performance.
How Does the Compliance Contribution Relate to the Annual Licence Fee?
The compliance contribution and the annual licence fee are separate obligations under S.L. 583.03. The annual B2C gaming service licence fee is paid upfront in advance and is non-refundable. The compliance contribution is calculated on gaming revenue and is paid monthly in arrears, by the 20th of the following month. The application fee of €5,000 is also separate and paid once at the final stage of the application process before the licence issues.
For a full-year B2C operator, the compliance contribution is almost always the larger obligation. A Type 1 licensee generating €10 million in annual casino GGR would pay an annual licence fee in the range applicable to its licence tier, plus a compliance contribution computed across multiple rate bands that will substantially exceed the base annual fee. The MGA’s Compliance Audit Manual specifies that auditors must verify compliance contribution calculations as a core element of system audits, confirming that the back-office accurately computes amounts due to the Authority (Compliance Audit Manual, section 5.4.7). For a deeper look at how the MGA’s audit framework applies to the technology layer behind these calculations, see our article on MGA system audit requirements.
Enforcement Consequences of Non-Payment
The MGA’s enforcement register records a substantial and consistent pattern of licence cancellations where non-payment of compliance contributions is identified as a primary or contributing breach. Regulation 3(1)(a) and Regulation 6 of the Gaming Licence Fees Regulations (S.L. 583.03) govern the payment obligation, breach of these provisions triggers enforcement proceedings under the Gaming Compliance and Enforcement Regulations (S.L. 583.06).
The Authority’s procedure follows Regulation 10(2)(a) of S.L. 583.06: a licensee in arrears is issued a show-cause notice with a twenty-day window to demonstrate why the authorisation should not be cancelled. Failure to respond or rectify within that period results in cancellation under Regulation 10(1)(a). The cancellations published on the enforcement register are irrevocable and are accompanied by directions to refund player funds, remove all MGA branding, and submit transaction reports confirming the remittance of player balances.
Compliance contribution arrears represent the single most common trigger for MGA licence cancellation proceedings in the enforcement register, appearing either alone or alongside unpaid annual licence fees in the great majority of cancellation notices reviewed.
Magic Services Limited (MGA/B2C/149/2007) was cancelled after failing to pay annual licence fees and compliance contributions totalling €71,035.54 for the period running from 1 August 2020 to 31 July 2021. Knockout Gaming Limited (MGA/B2C/412/2017) was cancelled in part for failing to remit compliance contributions of €20,044.35 for the June to November 2019 period. These amounts correspond to relatively modest GGR, confirming that the floor obligation catches licensees at even low revenue levels.
Operational note: Licensees with multi-type approvals must track gaming revenue by type in their back-office systems with sufficient granularity to produce accurate per-type compliance contribution calculations. The MGA’s Compliance Audit Manual requires auditors to verify this calculation logic specifically at section 5.4.7. A system that aggregates revenue without type attribution will fail that audit check.
Multi-Type Licences and Attribution
Many MGA B2C licensees hold approvals for more than one type. A full-service online gambling operator might hold Type 1 (casino), Type 2 (sportsbook), and Type 3 (poker) approvals under a single B2C gaming service licence. Each type’s contribution is calculated independently, with the relevant floor and cap applying to the GGR attributable to that type’s qualifying activities.
Directive 4 of 2018 on the Calculation of Compliance Contribution governs the attribution methodology. Where a product’s revenue stream is ambiguous, the Authority’s categorisation decision is final. In practice, this means operators with hybrid products, such as fantasy sports or social casino features, should seek clarification from the MGA before filing regulatory returns that attribute GGR to a particular type, since a reclassification by the Authority to a higher-rate type would produce a revised contribution liability that may trigger arrears.
The share capital requirements also vary by type combination. A licensee holding Types 1 and 2 must maintain minimum paid-up share capital of €200,000 (€100,000 per type), while a Type 3 and Type 4 licensee requires only €80,000. Combined multi-type requirements are capped at €240,000 under the corporate group licence provisions.
Gaming Tax: A Separate Obligation for Malta-Facing Operations
The compliance contribution applies to gaming revenue generated globally from the MGA B2C licence, regardless of player location. A separate obligation, the gaming tax under the Gaming Tax Regulations (S.L. 583.10), applies at 5% of gaming revenue generated from players physically present in Malta. These are distinct calculations, each submitted via separate monthly regulatory returns. Operators with substantial Malta-resident player bases must model both obligations simultaneously. For operators whose player base is predominantly outside Malta, the gaming tax liability is minimal, but the compliance contribution applies to the full global revenue base of the qualifying activities.
For a broader comparison of how MGA total annual costs stack up against other major licensing jurisdictions, including the UKGC’s GGY-banded annual fees and Remote Gaming Duty, see our UKGC vs MGA 2026 licence cost analysis.
Key Resources
Malta Gaming Authority, Guidance Note, Licence Fees and Taxation (February 2023 v2): the primary operational reference for compliance contribution rates, floors, caps, and payment mechanics across all four B2C types. Available at mga.org.mt.
Gaming Licence Fees Regulations (S.L. 583.03): the subsidiary legislation under the Gaming Act (Cap. 583) that sets the statutory rate schedule and minimum/maximum contributions. Available at legislation.mt and mga.org.mt.
Directive 4 of 2018, Directive on the Calculation of Compliance Contribution: the methodology directive governing how qualifying activities are identified, how gaming revenue is attributed per type, and how contributions are computed. Available at mga.org.mt.
Gaming Compliance and Enforcement Regulations (S.L. 583.06): governs the Authority’s enforcement powers, including the show-cause procedure and cancellation of authorisations, relevant to non-payment of compliance contributions. Available at mga.org.mt. To ensure your compliance contribution calculations and payment processes are correct, consult the MGA’s published rate schedules and work with qualified legal counsel to validate your attribution methodology before filing regulatory returns.
Matt Denney
Editorial · gamingcompliance.io
Reads the primary source so you don't have to. Fifteen years inside iGaming compliance: operator, supplier, and crown-corporation lottery.
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