Malta’s Way of Reducing the Payout Ratio

Online gambling is legal with plenty of regulations in almost all European countries. As pleasing as this is for both players and providers, legalization brings with it many problems. One planned change is that the Maltese gambling authority wants to reduce the payout ratio.

Legalization Leads to High Costs

The legalization of online gambling entails huge costs. Many regulators set a fee to cover the cost of licensing. Furthermore, gambling operators must pay for the license: in Greece, for example, two million euros are incurred for casino games and three million euros for a gambling license.

Apart from this, the gambling providers must make technical changes to comply with the regulations of the respective legislation. In some countries, the process is similar to Ireland, and existing gambling providers also must make changes to their software.

This also has considerable costs. Furthermore, a relatively high gambling tax is usual in each country. Newly licensed providers in Greece must pay 35% tax. In Ireland, the tax is right now at 5.3%.

However, the problem here is that the tax calculation is on the stakes. All these costs are partially offset by adjusting the payout ratio downwards.

The difference Between On-Site Casinos and Online Casinos is Too High

The Malta Gaming Authority has mentioned another reason why the payout ratio should be reduced: The difference between the payout ratios set by on-site casinos and the payout ratio of online casinos.

Apparently, the reason for the high popularity of online casinos is their high payout ratio. To achieve justice here and make the competition fairer, the quota must hit a lower number. Currently, there is usually a payout ratio of 92%. This should go to 85%.

For the players, this means a substantially smaller profit. The hope lies with the Maltese Gambling Authority's comment that online casinos are allowed to be relatively flexible. The suggestion is that the casinos adjust the quota to the competition.

Again, this would contribute to fairness if all online gambling operators offer the same odds. If this were not the case, everyone would naturally reach for the casinos that offer the highest odds. All other providers would lose out in this case.

MGA Reaps Opposition and Encouragement

It will hardly surprise anyone that opposition pops out from many sides. Many rightly fear that players will migrate to illegal providers. These do not have to comply with the new and lower payout ratio.

As a rule, they do not pay any tax and basically generate a higher profit. Thus, the unlicensed providers can afford to offer a higher quota. At this possible consequence, the Maltese regulatory authority reaps some criticism. Likewise, many players are already not enthusiastic.

Even more surprising is the fact that nevertheless some players, industry experts, and companies agree with the lowering of the payout ratio. The companies are the only ones to benefit from a lower quota, as they partially offset the high additional costs, as envisaged by the MGA.

However, why players also agree to this is beyond anyone's comprehension. Fortunately, it is so that the payout ratio will not change right now. It may still take a few weeks or even months before the new quota becomes valid.