Malta market focus
than a complementary way to the gaming sector. Provision of banking services, which is key to the success of any commercial venture particularly gaming, is still a struggle and one of the industry’s biggest gripes. The situation has not been helped by the island’s grey listing by the Financial Action Task Force (FATF) which made banks even less
period able to say it is even cleaner and more vigilant when it comes to its AML responsibilities. There is a feeling in the industry that the end of grey listing will be a springboard to greater access to European markets and financial services. Malta has proven adept at using its status to punch above its weight in Europe and elsewhere. Where some European
willing to service customers in an industry perceived as risky. Maturity has also come at a price. The standard of gaming regulation has been raised in jurisdictions across the world and Malta is no exception. In the early 2000s a compliance department of one person was the norm. Now, a team of 15+ is not uncommon leading to calls for the MGA to avoid over-regulating the sector. The authority itself accepts that the regulatory ceiling is now quite high and says it is focusing on raising the floor so that all operators are held to the same high standard. “The future will be a period of refinement,” says Carl Brincat, Chief Executive Officer of the Malta Gaming Authority. “We need to be flexible and fair to those licensees who are always compliant whilst remaining attractive to start-ups which are our lifeblood and source of innovation. There has been some consolidation in the
countries have, for various reasons, pushed for greater control over the gambling sector, the MGA has argued for regulation which is proportionate, not duplicating other sectors and focused on its main objectives. Outside the EU, the country has helped numerous jurisdictions regulate their gaming sectors with a set of regulations which are ready to be implemented. Tax opportunities Whilst there are numerous factors in Malta’s competitive advantage, tax has been one of the keys to its success. Gaming companies have gained from a beneficial corporate tax regime, VAT and other tax incentives for staff which have encouraged
iGaming in Malta The industry at a glance
12% 10,000 36.2m €924m
Value of industry to Maltese GDP*
Number of people directly employed* Active player accounts registered on Malta-licenced websites† Total Gross Value Added generated†
* MGA 2022 † National Statistics Office 2020
them to recruit qualified people from overseas. The Pillar 1 proposal, dealing mainly with transfer pricing and the taxation of the digitized economy, and the rollout of a minimum tax under Pillar 2 of the OECD’s base erosion and profit shifting (BEPS) project may bring about some changes to the current tax system. Pillar 2 will see the introduction of a minimum 15 percent corporate tax rate on companies with a turnover above €750m. Malta has negotiated an exemption until 2029, however widespread adoption in several jurisdictions can have an effect on businesses on the island before 2029. There is no question that Malta will fulfil its international
sector but we need those new smaller, nimble companies for the future. The focus of regulation will be to bear down on criminality and raise standards of consumer protection and we need to ensure that our refinements actually have an effect and are not just a burden on operators.” The MGA recognizes that some of the responses to the FATF grey listing have increased costs for operators. These have come despite the gaming sector being exonerated by the task force. But they hope the sector will come through this
8 • IMGL Magazine • July 2022
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