What makes Malta so attractive for online gambling companies?

Since 2001 the Malta gambling industry has grown significantly. (photo by Flickr)

The Malta Gaming Authority has reported that it anticipates continued growth in the domestic online gambling sector over the next 12 months.

This news comes after a difficult 2020 that not only saw the COVID-19 pandemic impact every aspect of the economy but in the case of Malta, it had fallout from Brexit to contend with as well. In the MGAs interim performance report, published recently but covering January-June 2020, they noted that these two factors, combined with international regulatory requirements do somewhat complicate accurate projects.

Despite this, a couple of demands within the industry such as mobile gaming and technological developments will probably result in a stable and positive outlook.

Malta’s online gambling sector

The Malta Gaming Authority (formerly the Lotteries and Gaming Authority) was launched in 2001, just two years shy of its European Union accession. It was created to oversee and regulate land-based and online gambling within and from Malta, and to protect the country against financial crime and the targeting of vulnerable players.

It was one of the world’s first regulators to offer a framework that targets specifically online gambling while creating a secure and responsible environment for players.

Since 2001, Malta’s gambling industry has grown significantly. Furthermore, the Malta Gaming License became one of the most respected in the world and many of the biggest names in online gambling are licensed there. The sector has been on a steady upward trajectory over the last twenty years, attracting more investors, licensees, and entrepreneurs every year.

As with many other jurisdictions, there was a shift away from sports betting in 2020, mainly because most sporting events were postponed or cancelled. Hence, games of chance like slots, table games, lotto and eSports generated more revenue. As a result, operators in the country had to rethink and change their business model, focusing on other betting types.

The biggest sector in the Maltese online gambling market was, in fact, games of chance against the house with outcomes generated randomly. These include casino games, roulette, blackjack, baccarat, lotteries, and virtual sports games and accounted for over 65% of all revenue.

Employment, licenses, and operators

Online gambling is a major employer in Malta. Law firms, marketers, affiliates, educational facilities, IT support, web design, and the operators employ combined 8,009 people. The real figure could be higher as these are just those with MGA licensed entities. Also, further 1,557 people are estimated to work in online gambling activities but licensed in other jurisdictions.

Online gambling accounts for around 12% of Malta’s GDP. Even during the pandemic, job losses were low (due to the online nature of work), and the sector’s contribution to the situation remained high.

As for the license, by June 2020 there were 313 MGA licensed gambling operators in Malta. This number increased since 2017 when 284 companies were operating. The number of employees has also increased by more than 2,000 during the same period, most of which are online jobs.

Why is the Malta gambling license in demand?

A Maltese license opens many doors for the licensee. It makes it easier to open bank accounts, secure merchant account and payment agreements, and get better games and software. It also means you benefit from some of Malta’s solid reputation- displaying the Malta license on your platform gives players added trust. But there are other benefits.

Incorporating a company for your online gambling activities in Malta brings with it excellent tax optimization opportunities. Through Malta’s fully compliant and legal full tax imputation system, you can significantly reduce the tax you pay on revenue- to single digits in some cases. You also benefit from operating in an EU country and having access to more markets.

Additionally, Malta gives operators access to some of the industry’s best experts. There is a wealth of knowledge available in-country and multiple ancillary service providers- from marketing, to training, all within a 30-minute drive. Malta’s infrastructure is prepared to support online gambling operators and make its operations as smooth as possible.

What’s the catch?

Acquiring a Malta gaming license is a bit tougher than setting up in say, Curacao. It requires an in-depth application process that includes face-to-face meetings with the MGA, full background checks, and information on your professional qualifications and capabilities.

Also, the price is high. It’s not the most expensive one around, but it’s more expensive than others. This license is generally preferred by startups with capital behind them, or established brands looking to expand. Lastly, the process takes longer than other jurisdictions, and there are more ongoing reporting and compliance matters to attend to.

The last word

The key to success is knowing how to tailor services in a way that means they will not be limited by situations such as a pandemic. For example, strengthening your mobile gambling capabilities, investing in eSports and fantasy sports, as well as games like poker and lotto that are gaining more traction.

If you are considering launching or expanding your online gaming business, it’s best to speak with a professional like Fast Offshore. We work in multiple online gambling jurisdictions worldwide and have assisted countless iGaming clients over the last 23 years. From incorporation to tax optimization, bank accounts to payment processors, and licensing, we can take care of the process from A-Z.