## A Narrative of Triumph in Progress
Ed Hawkins examines Malta’s path as a center for internet gaming – its history, current state, and what lies ahead. Prior to 2004, Malta was an obscure island, possibly a location where your grandfather served during his time in the navy, or where your parents contemplated retirement. While that remains accurate, it has also evolved into one of the most prosperous and desirable jurisdictions for online gaming globally.
Over a decade ago, the Maltese, with their trademark keen foresight and even sharper intellect, were among the pioneers in Europe to grasp the potential of this burgeoning sector. They acted swiftly to establish the foundation, creating a vital legislative structure that would solidify Malta’s position as a world leader in remote gaming regulation. As the saying goes, luck favors those who are ready.
With stringent regulations and enticing financial benefits in place, businesses streamed into Malta. The Malta Gaming Authority (MGA) has subsequently welcomed more than 250 remote gaming enterprises and boasts in excess of 400 licensees. The industry now directly contributes a remarkable 8% to Malta’s Gross Domestic Product and furnishes employment for over 8,000 individuals, as per the MGA.
Dr. Jose Herrera has played a pivotal role in Malta’s extraordinary ascent.
Mr. Herrera, a one-time legal professional currently holding the position of Parliamentary Secretary for Competitiveness and Economic Expansion, shared the impressive evolution of Malta’s online gaming sector. He stressed the significance of grasping the historical background. “In 2004, within the framework of wider 2002 reforms, the Lotteries and Gaming Act was implemented. This action facilitated the privatization of the national lottery, aligning with the trend of privatization and market deregulation occurring in Malta at that period,” he elaborated.
He proceeded to emphasize Malta’s proactive strategy: “While the European Union has only recently shifted its focus towards the digital single market, Malta embarked on economic diversification 15 years prior, recognizing the service sector as a crucial pillar. This naturally encompassed ICT and the entire digital economic landscape, including iGaming, which possessed immense possibilities.”
Herrera acknowledged the hurdles faced in those initial days. “Remote gaming represented this uncharted territory—unregulated, flourishing, and demanding notice, not solely from an economic perspective but also from a regulatory standpoint. After all, it carried intrinsic gambling-related hazards. It’s intriguing to consider that some of the most prominent pan-European operators we recognize today actually gained their early experience in Malta.” He finished with a hint of satisfaction, “Malta was the pioneering jurisdiction to establish a regulatory structure for remote gaming, a blueprint that other jurisdictions continue to reference even now.”
The Maltese, trailblazers in the realm of internet gaming oversight, possess a profound comprehension of the industry’s metamorphosis—or rather, its upheaval. They’ve witnessed the shifts in framework, offerings, and even the gaming ethos. Moreover, they have a lucid understanding of what succeeds and what falters regarding regulatory measures. This comprehension is a pivotal factor contributing to Malta’s desirability as a jurisdiction for gaming enterprises.
They’ve cultivated a sophisticated infrastructure that bolsters every facet of the sector. Furthermore, the Malta Gaming Authority (MGA) is renowned for its efficiency, proactiveness, and efficacy. This has fostered a transparent and resilient regulatory landscape.
However, given such a commanding position, is there a possibility of Malta becoming complacent? Unequivocally not, stresses Herrera. “Malta’s economic performance has been exemplary, but the government is not solely motivated by the industry’s financial objectives. Our direction is shaped by policy and innovation aims for the gaming sector,” he asserts. “Foresight and ingenuity are what propelled Malta into prominence back in 2004. We shall retain that same pioneering spirit in our regulations, our blueprint, and our methodology to uphold Malta’s preeminence in the gaming sphere.”
Maltas governing structure is poised for a significant transformation. This involves a comprehensive modernization, a cutting-edge framework crafted to bolster the sector with unambiguous, well-defined guidelines grounded in data and a deep comprehension of the inherent hazards. The objective is to have a completely new legal framework for the gaming industry finalized by year’s end. This statement comes directly from Herrera regarding the impending alterations.
He elaborated further, stating, “The risks within this industry have not remained static. The swift progression of technology and the merging of diverse markets have reshaped the environment. Certain risks are now more pronounced, more interconnected, and undeniably more intricate. Gaming regulations must be technology and game-type neutral, but we cannot afford to be passive about risk.”
Herrera stressed, “The core objectives of regulation remain unchanged: protecting consumers and upholding the industry’s integrity. However, success cannot be solely evaluated by operator compliance. We must assess the tangible effects of the implemented measures.”
He underscored the necessity of continuous adaptation: “Our regulatory and oversight instruments require strengthening, modification, and occasionally complete replacement to maintain effectiveness. This is particularly crucial given the constantly shifting business paradigms and the unique hurdles of our jurisdiction. The Malta Gaming Authority (MGA) is already enacting a series of reforms to usher in this new regulatory epoch.”
Recent occurrences in Italy have only amplified the urgency of these reforms. “Just last July, Italian officials alleged infractions by three Maltese gaming entities and apprehended six individuals. This clearly illustrates that the lifespan of regulatory mechanisms is dwindling. Mere adherence to regulations is no longer sufficient.”
Metrics and proof of efficacy hold equal weight.
Malta is meticulously developing its next iteration of gaming regulations, considering these elements and numerous others. A fresh draft Gaming Act is anticipated by the close of November, presenting a comprehensive structure that enables the Minister and regulatory bodies to execute tailored measures within a cohesive system. The objective is unambiguous: to ensure the longevity of their legislation through intelligent, technology-agnostic regulation that welcomes advancement.
Herrera posits that an ongoing dedication to an “economic lens on policy” is paramount to the strategy moving forward. The majority of sectors within the Maltese economy have undergone liberalization, and over time, the government has relinquished ownership of many assets it formerly held, including the state lottery, the airport, financial institutions, and telecommunications. The sole commercially-driven interests the government currently maintains are in energy and the national carrier, Air Malta.
“This liberalization movement, combined with the government’s economic approach as lawmaker, policy architect, and overseer, has cultivated increased expansion and economic productivity,” states Herrera.
In various other European Union nations, administrations continue to maintain control over sectors such as gambling establishments, state-run lotteries, telecommunications firms, air carriers, and power providers. This can significantly hinder economic progress and lead to ethical dilemmas, particularly when the government is also tasked with overseeing these very industries. Malta opted for a different approach, and it appears investors have recognized this.
And his observation holds merit. Businesses participating in this shift seem quite satisfied. Enrico Bradamante, the Director of Operations for NetEnt Malta (a prominent entity in internet-based gaming) and Head of Continental Market Activities, highlights that Malta possesses an advantage due to its pioneering role in the online gaming realm and its established reputation for reliability.
“Malta has attracted a substantial portion of the interactive gaming sector within Europe – in actuality, the majority of NetEnt’s clientele are situated there, which is significant for us,” he elaborated. “It’s a truly appealing location for conducting business, boasting a proficient labor pool. The Malta Gaming Authority, with support from the government and other collaborators, even established a gaming institution to further enhance the island’s allure.”
“However, it’s not solely about the gaming regulations. Malta’s taxation framework and investor incentives have been a major pull for the industry, coupled with the seasoned workforce – and I’m not merely referring to staff members, but also the specialists who bolster the industry.”
The gaming sector in Malta is flourishing, driven by public and private investments that bolster infrastructure and the broader economic landscape. Moreover, the establishment of the Malta Gaming Authority as an autonomous entity is poised to amplify Malta’s impact within established and nascent markets. This newly formed Authority will utilize its regulatory structure to propel strategic expansion and pave the way for seamless entry into these markets.
Mario Petralia, Chief Legal and Compliance Officer at Yggdrasil Gaming, concurs, foreseeing a revitalization of Malta’s iGaming industry over the next half-decade. “The European gaming terrain has undergone a metamorphosis, and the Malta Gaming Authority has consistently provided unwavering support to its licensees throughout this evolution. Looking forward, I am optimistic that the MGA will fortify its partnerships with other gaming regulators, particularly in domains such as data exchange, streamlining due diligence and regulatory adherence, standardizing technical approvals, and facilitating the sharing of liquidity for poker platforms and collective prize pools.”
He expresses confidence in the Maltese government’s commitment to fulfilling its pledges for continuous enhancement and innovation. “We anticipate that Malta will sustain a business-conducive environment that continues to attract both seasoned experts and emerging talent, a factor that is paramount for our company’s expansion, especially as competition from other jurisdictions intensifies.”
Its come to our attention that existing guidelines are being reevaluated, with the Malta Gaming Authority (MGA) aiming to implement distinct permits for business-to-business (B2B) and business-to-consumer (B2C) activities. This development is highly welcomed, as it will undoubtedly alleviate the load on license holders. Any measure that streamlines the incorporation procedure for B2B/Type 4 licensees collaborating with MGA-licensed B2C providers is a commendable move.”
“In a bid to further invigorate the sector, the Malta Gaming Academy is being founded to furnish both domestic and global learners with the essential competencies to flourish within the gaming domain. This autonomous, joint public and private learning center will proffer customized programs that cater to the industry’s particular requirements, creating avenues for both local and international individuals to enter and excel in this dynamic field.”
“In essence,” Herrera conveyed his aspiration, “I foresee Malta transforming into the ‘Silicon Valley’ of online gaming.”
This enhances the game’s security for all participants, eliminating issues such as dishonesty and theft – regardless of whether these actions are occurring or simply a negative perception held by individuals.
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