## A Narrative of Triumph: Malta’s Gaming Rise
Ed Hawkins examines Malta’s trajectory as a center for digital gaming, investigating its history, current state, and optimistic outlook.
If a location exemplifies the transformative impact of the online gaming surge, it’s Malta. Prior to 2004, this island nation was primarily recognized for its historic maritime base (perhaps your grandfather was stationed there!) or as a potential retirement sanctuary for your parents. While these aspects remain accurate, Malta has evolved into something much greater: one of the globe’s most prosperous and desirable jurisdictions for internet gaming.
Over a decade ago, visionary Maltese businesspeople perceived the vast potential of this burgeoning sector before many others in Europe. They didn’t merely recognize it; they took decisive action. Establishing the foundation with essential legislation, they positioned Malta as a global frontrunner in overseeing remote gaming. It was a textbook example of “if you build it, they will come.”
And arrive they did. With a sturdy regulatory structure and enticing financial incentives in place, businesses swarmed to Malta. The Malta Gaming Authority (MGA) has now granted licenses to more than 250 remote gaming providers, with a combined total of 400 licensees operating under its supervision. This flourishing industry now represents a substantial 8% of Malta’s GDP and furnishes employment for over 8,000 individuals, as per the MGA.
Dr. Jose Herrera has been a pivotal figure in Malta’s remarkable ascent within the online gaming realm.
Mr. Herrera, an attorney by trade and former Parliamentary Secretary for Competitiveness and Economic Growth, is, to say the least, an individual whose insights on this extraordinary tale are worth heeding. “Implemented in 2004, the Lotteries and Gaming Act of 2002 was a component of a gaming sector overhaul that established the foundation for privatizing the national lottery, alongside other Maltese public assets at the time, and market deregulation,” he elaborated.
“Although the European Union has only recently begun examining the digital single market, Malta embarked on a mission for economic diversification over 15 years ago, prioritizing the services sector as part of its economic restructuring at that juncture. It’s unsurprising that information and communications technology, and the entire digital economy with all its subcategories, demonstrated immense promise.”
“In those days, remote gaming was this itinerant, untraditional, rapidly expanding economic sector requiring more than just financial focus, but also oversight due to the hazards typically linked with gambling. Presently, some of the biggest pan-European operators actually originated in Malta. Malta was the pioneering jurisdiction to introduce the notion of regulation to remote gaming, so much so that even now it remains a blueprint for other jurisdictions to emulate.”
The Maltese were early adopters in the realm of internet-based gaming regulation. This has provided them with a comprehensive understanding of the industry’s mechanics, encompassing its technological underpinnings, game design, and cultural nuances. They’ve witnessed firsthand the effectiveness and shortcomings of various regulatory approaches. This wealth of experience is a significant factor contributing to Malta’s status as a sought-after hub for gaming enterprises. They’ve cultivated a comprehensive ecosystem to bolster the industry. Moreover, the Malta Gaming Authority (MGA) has garnered a reputation for its stringent yet equitable approach, fostering a system characterized by widespread trust.
One might ponder, given the factors that propelled Malta to prominence, whether there’s a possibility of them lagging behind. Herrera, a prominent figure in Malta’s gaming landscape, asserts a resounding no. “Malta’s economy is flourishing, but our motivation extends beyond mere financial gain,” he elaborates. “It’s about astute policies and perpetual innovation within the gaming sphere. This forward-looking mindset is what initially placed Malta on the map back in 2004. We remain committed to innovating in our regulatory practices and the infrastructure we develop, ensuring Malta retains its position as a frontrunner in the gaming industry.”
Maltas governing structure is preparing for a significant transformation—a ‘fresh chapter’ of supervision intended to bolster sectors that prioritize strong, well-articulated, and data-driven methodologies within a transparent risk mitigation framework,” Herrera elucidated. “Our objective is to have an entirely new Gaming Act formulated by year’s end.”
He proceeded, “This doesn’t imply that hazards have stayed stagnant. In actuality, as innovation and commerce converge, certain perils are transforming, becoming more intricate and multifaceted. Gaming oversight needs to remain impartial concerning technology and game classifications, but not regarding risk. While the aims of regulation remain consistent—customer safeguarding and guaranteeing probity—achievement cannot solely revolve around operators ticking boxes. It must concern the tangible impact of the actions implemented.”
Herrera stressed, “Our supervisory and monitoring instruments require honing, modification, or even complete revamping to ensure their efficacy when confronted with novel operational paradigms and within diverse jurisdictions. The Malta Gaming Authority (MGA) is undergoing a series of overhauls to usher in this subsequent iteration of regulation.”
He finished with a direct allusion to a recent occurrence, “The episode this past July, where Italian officials alleged the implication of three Malta-licensed gaming enterprises and apprehended six persons, highlights the fact that regulatory systems and instruments possess a limited lifespan. Merely adhering to the letter of the law is no longer sufficient.”
Measurements and corroborating proof are undeniably vital. Malta is meticulously developing its next iteration of gambling regulations, and these factors, among numerous others, are being integrated directly into the legislation. The updated Gaming Act is scheduled for release by late November, and it will establish a comprehensive structure that empowers Ministers and organizations to implement more customized measures within a unified framework. Our objective is unambiguous: to have nimble, technology-agnostic regulations that demonstrate the adaptability of our laws, particularly in embracing innovation.”
Herrera stressed that an ongoing dedication to an “economic lens for policy” is also paramount to the strategy moving forward. A majority of sectors within the Maltese economy have been deregulated, and over time, the government has relinquished numerous assets it previously controlled, such as the national lottery, the airport, banks, and telecommunications. The sole commercially-driven holdings the government maintains are in energy and the national carrier, Air Malta.
“This drive for deregulation, coupled with the government’s economic approaches as lawmaker, policy architect, and overseer, has cultivated enhanced expansion and economic effectiveness,” Herrera stated.
In various European Union nations, administrations continue to maintain control over sectors such as gambling establishments, state-run lotteries, telecommunications, maritime transport, and power generation. This control can lead to inefficiencies and ethical dilemmas, particularly when the government is also tasked with overseeing these industries. Malta, however, opted for a different course, and I think investors find that appealing.
And it appears they do. Businesses that have participated in this shift seem quite satisfied. Enrico Bradamante, the Managing Director and Head of European Operations at NetEnt Malta (a significant entity in online gaming software), highlights that Malta’s forward-thinking approach to the remote gaming sector has garnered substantial confidence, distinguishing it from other jurisdictions.
“Malta has developed into a center for online gaming enterprises in Europe, and naturally, a considerable number of NetEnt’s customers are situated here. That holds strategic significance for us,” he states. “Malta is a highly desirable location for conducting business, boasting a highly proficient labor pool. The Maltese government, in collaboration with the Malta Gaming Authority (MGA), has even founded a gaming institution to further cultivate expertise on the island.”
“However, it extends beyond gaming regulations. Malta’s taxation framework and incentives for investors have been a major attraction for the industry. And let’s not overlook the seasoned workforce – not solely the employees themselves, but also the legal and financial experts who possess a deep understanding of this sector.”
The gaming sector in Malta flourishes due to the ongoing financial backing from both governmental and private entities. This has resulted in remarkable advancements in infrastructure, subsequently bolstering enterprises and economic expansion. The independent Malta Gaming Authority (MGA) assumes a pivotal function, advocating for Malta as a premier gaming jurisdiction within established and developing markets. Their comprehensive regulatory structure forms the foundation of their growth strategy, unlocking avenues and generating prospects for businesses to penetrate these markets.
He staunchly maintains that the Maltese government will uphold its commitments, remaining devoted to perpetual enhancement and ingenuity. “We fully anticipate Malta to sustain its favorable business climate, one that entices both seasoned experts and emerging talent. This is paramount to our company’s continued progress, particularly as rivalry from alternative jurisdictions escalates.”
Mario Petraglia, Chief Legal and Compliance Officer at Yggdrasil Gaming, shared these viewpoints. He foresees that over the ensuing five years, Malta will cement its standing as a prosperous center for the sector. “The European gaming panorama is undergoing substantial metamorphosis, and the MGA has consistently demonstrated proactivity in its assistance to its licensees,” he affirmed. “Looking forward, I envision the MGA reinforcing its partnerships with other gaming regulators globally. This will be especially concentrated on aspects such as data exchange, optimizing due diligence and other prerequisites, standardizing technical accreditation, and facilitating the fluidity of shared networks and combined prize contests.”
Its come to our attention that the present guidelines are under scrutiny. The Malta Gaming Authority (MGA) seeks to divide the current permit into a B2B permit and a B2C permit to lessen the load on permit holders. For B2B/Type 4 permit holders, any alteration that enables quicker and more seamless incorporation with MGA-licensed B2C operators is a positive development.”
The formation of the Malta Gaming Academy is undoubtedly a stride towards progress. It endeavors to furnish both domestic and global pupils with the competencies required to cultivate a profession within the gaming sector. The Academy aspires to function as an autonomous, joint public-private educational entity, generating additional avenues for local and international individuals to penetrate the industry by offering customized programs that cater to the demands of the gaming domain.
In conclusion, Herrera distinctly articulated his aspirations. “My desire is for Malta to become the ‘Silicon Valley’ of distant gaming,” he stated. “It’s an attainable objective, and I will collaborate closely with the MGA to bring it to fruition. Our paramount priority remains to be pioneers in the gaming realm – both in terms of groundbreaking nascent gaming enterprises and in the manner we formulate and approach our regulations. We are fully cognizant that our most formidable hurdle is to maintain efficiency and effectiveness in addressing intricacy and emerging hazards. We will accomplish this through heightened openness, more robust stakeholder involvement, and ultimately, by making choices that genuinely mirror our gaming policy.”
This enhances player security and aids in altering the game’s image, whether earned or not, of being rife with dishonest players and fraudsters.