Malta has morphed into the world’s iGaming capital in the last few years, on par with the likes of the United Kingdom. By continuously innovating this sector, Malta has managed to lead in both the traditional and online gaming worlds, adding thousands of jobs to its economy and profiting off of a multi-billion-euro industry that is consistently growing.
iGaming – also known as online gaming – is the wagering of money or other values on the outcome of an event or a game via the internet. Poker, online casinos, and sports betting are among the most popular iGaming activities.
The latest move by the Malta Gaming Authority (MGA) to keep abreast of industry trends came last month in the form of new proposed guidelines on blockchain and cryptocurrency applications in the gaming industry. The proposals, outlined in a public document, aim to apply standards to games that use cryptocurrencies and blockchain technologies by creating a licensing system for game developers. The motivating goal is to protect consumers, aid in the prevention of money laundering and terrorism funding, and protect “the reputation of the Maltese jurisdiction.”
It is the Maltese jurisdiction that is to thank for turning the small island nation into a major gaming hub. In 2004, Malta became the first EU member state to regulate iGaming with relatively stringent rules on the monitoring and licensing of gaming operators. The MGA’s strict approach has proved highly beneficial, as these strong policies have attracted serious operators looking for a trustworthy and predictable regulation regime.
So far, the MGA has issued around 500 gaming and sports betting licenses to a plethora of operators – including some of the world’s leading gaming companies, like Aspire Global International, Betfair, Betsson, Casumo, NetBet, Tipico, and more.
Another huge draw for these companies is Malta’s favorable tax system, in which employees of iGaming businesses licensed by the MGA are eligible for reduced income tax rates, exemptions on income derived from patents, refunds on dividends, and double taxation relief. Although taxes levied on gaming activities vary depending on the class of the gaming license, Malta’s tax rates are among the most competitive in the world.
Then there is the island’s geographical draw. With mostly sunny weather, idyllic scenery, and membership in the European Union, Malta is a prime place to attract employees and operators in the iGaming field.
At the end of May 2017, the leading UK gaming company Sky Betting and Gaming announced that it applied for an MGA license. In April 2018, Global Daily Fantasy Sports obtained a license in Malta to provide business-to-business daily fantasy sports software.
And the industry just keeps growing. The European online gambling market – which is by far the largest market for iGaming in the world – is estimated to produce a Gross Gaming Revenue of about €16.5 billion. This is expected to grow steadily to €24.9 billion by 2020. Online gaming comprises 12 percent of the Maltese economy, generating about €700 million and employing 9,000 people.