## A Mediterranean Marvel in Digital Entertainment
Join Eddie Hawkins as he explores how Malta transformed into **the** international center for online gaming.
Prior to 2004, Malta was an undiscovered treasure. Perhaps your grandfather shared tales of his time at the naval station, or your parents contemplated it for their golden years. While that allure remains, Malta is now synonymous with digital entertainment, boasting one of the most prosperous and coveted licensing jurisdictions globally.
This island nation in the Mediterranean Sea was ahead of its time. Maltese officials recognized the promise of the burgeoning internet gaming sector before any other European counterpart. They swiftly established a solid legal foundation, positioning Malta as a world leader in remote gaming oversight. Their approach was straightforward: **create a strong framework, and they will arrive.**
And arrive they did. With transparent regulations and enticing financial benefits, businesses swarmed to Malta. The Malta Gaming Authority (MGA) has now granted licenses to over 250 remote gaming enterprises and boasts over 400 licensees in total. This thriving sector now contributes a remarkable 8% to Malta’s GDP and provides employment to over 8,000 individuals.
Central to this success story is Dr. Jose Herrera, a key figure in solidifying Malta’s supremacy in the online gaming realm.
Mr. Herrera, presently serving as the Parliamentary Secretary for Competitiveness and Economic Growth, possesses significant knowledge in this domain, given his background as a legal professional. Let’s turn our attention to him as he guides us through the genesis of this remarkable odyssey. “In 2004, amidst a broader series of reforms, the Lotteries and Gaming Act was enacted. This legislation facilitated the denationalization of the national lottery, exemplifying Malta’s endeavors to remodel its economy and embrace the principles of a free market,” he elucidates.
“Indeed, Malta was already at the forefront of this transformation. A decade and a half ago, they were actively pursuing economic diversification, placing substantial emphasis on the service sector. This foresight predated the European Union’s discourse on a digital single market. They recognized the latent potential of technology, particularly within the realm of the digital economy, especially in areas such as online gaming.”
“In those early days, remote gaming resembled the Wild West â characterized by rapid expansion, a lack of regulation, and remarkable mobility. The need for regulations and oversight was evident, particularly considering the inherent risks associated with gambling. The outcomes speak for themselves. Today, prominent players in the European gaming industry trace their roots back to Malta. They were trailblazers, the pioneers in regulating remote gaming, establishing benchmarks that continue to shape the industry today.”
The island nation of Malta has led the way in online gaming regulation, developing a comprehensive understanding of the industry’s swift development, encompassing its framework, offerings, and ethos. This expertise has provided them with invaluable knowledge of effective and ineffective regulatory practices, establishing Malta as a highly desirable location for gaming enterprises. The nation takes pride in its robust infrastructure, which supports gaming activities at every stage. Furthermore, the Malta Gaming Authority (MGA) has earned a reputation as a highly capable and proactive regulatory agency, cultivating a transparent and well-governed landscape.
This triumph naturally prompts the inquiry: is there a possibility of Malta becoming complacent? Herrera stresses that stagnation is not acceptable. “Although Malta’s financial performance has been exceptional, the government is not solely motivated by the industry’s economic aspirations, but by its policy and advancement aims in gaming,” he asserts. “Foresight and ingenuity were the catalysts for Malta’s success in 2004 â and we will endeavor to preserve that inventive spirit in our regulatory approach, blueprint, and methodology to uphold our prominent standing in gaming.”
The Maltese government is preparing for a significant revamp of its gaming laws. The objective is to establish a “cutting-edge” structure that fosters industry expansion while upholding ethical conduct. This novel strategy prioritizes a resilient, data-driven, and risk-aware system, departing from a solely compliance-centric paradigm.
The impetus for this transformation stems from the dynamic nature of risks within the sector. As technology and the marketplace converge, fresh and increasingly intricate obstacles arise. Malta acknowledges that effective oversight must be nimble and responsive, extending beyond mere checkbox compliance to proactively tackle emerging threats.
This entails reassessing existing regulatory and supervisory mechanisms, potentially even substituting them altogether. The recent incident involving three Maltese gaming firms facing accusations in Italy highlights the pressing need for this evolution. It serves as a stark reminder that simply adhering to current regulations is insufficient; a proactive, future-oriented approach is paramount for the enduring well-being and standing of the Maltese gaming industry.
Just as vital are the assessment metrics and the confirmation of their efficacy. Malta’s continuous enhancements to remodel gaming governance for the coming era will incorporate these components, alongside numerous others. The updated Gaming Act, anticipated to be presented as a draft by the conclusion of November, will serve as a comprehensive structure. This structure authorizes the designated Minister and officials to execute customized actions within a unified framework. Our objective is unambiguous: to safeguard the future of our legislation through astute, technology-agnostic regulation and sustain an approach of openness towards innovation.”
Herrera stresses that a sustained dedication to a “policy of economic strategy” is equally pivotal to the prospective approach. Malta has already deregulated a majority of its economic sectors. Throughout the years, the administration has relinquished numerous assets it formerly possessed, such as the state lottery, the airport, financial institutions, and telecommunications. The sole remaining commercially-driven government holdings are in energy and the national carrier, Air Malta.
“This drive towards liberalization, combined with the government’s economic policy in its capacities as lawmaker, policy-architect, and overseer, has cultivated further economic progress and effectiveness,” remarks Herrera.
In various European Union nations, state entities maintain ownership and control over sectors such as gambling establishments, nationwide lottery systems, and corporations within telecommunications, maritime transport, and power generation. This arrangement has the potential to generate inefficiencies and ethical dilemmas, particularly in instances where the government also holds the responsibility of overseeing these specific industries. Malta opted for an alternative course, a decision that investors seem to hold in high regard.
And their actions appear to validate this sentiment. Enterprises involved in this transition have conveyed a high level of contentment. Enrico Bradamante, holding the positions of Managing Director and COO for European operations at NetEnt Malta (a provider of digital gaming solutions), emphasizes that Malta’s proactive stance towards the remote gaming sector has garnered it an exceptional reputation, distinguishing it from other jurisdictions.
“Malta successfully attracted a substantial segment of the online gaming industry within Europe, resulting in the majority of NetEnt’s clientele being situated there. This reality makes Malta a location of paramount importance for us,” he elaborates. “It presents itself as a highly desirable jurisdiction for conducting business, boasting a workforce characterized by a high skill level. The Maltese government, in collaboration with industry stakeholders, even took the initiative to establish a gaming academy through the Malta Gaming Authority, further solidifying the island’s allure.”
Bradamante further notes, “Malta’s competitive advantage is not solely attributed to its gaming regulations. Its taxation framework and incentives designed for investors have served as a significant attraction for the industry. And it is crucial not to overlook the experienced talent pool â encompassing not only employees but also specialized professionals.”
The gaming sector in Malta is flourishing due to continuous financial backing from both governmental bodies and private enterprises. These capital injections have not only resulted in enhanced infrastructure but have also provided a significant boost to the national economy. To further cement Malta’s standing as a gaming center, a newly formed autonomous organization, known as the Malta Gaming Authority, is being created. This body will be entrusted with the responsibility of promoting Malta in both established and developing markets. With its comprehensive regulatory structure, the Malta Gaming Authority seeks to propel strategic expansion and generate avenues for businesses to penetrate these markets.
He holds a strong conviction that the Maltese government will maintain its dedication to its pledges, consistently pursuing progress and innovation. He expressed, “We are certain that Malta will persist in offering a business-conducive atmosphere that attracts both seasoned experts and emerging talent. This will enable our company, along with others in the industry, to prosper, particularly as rivalry from other regions intensifies.”
Mario Petralia, the Head of Legal and Compliance at Yggdrasil Gaming, shared these views. He foresees Malta undergoing another phase of growth in the upcoming five years. “The European gaming sector is experiencing a substantial shift, and the Malta Gaming Authority has consistently demonstrated proactiveness in assisting its licensees,” he observed. “I am of the opinion that in the next few years, the Malta Gaming Authority will bolster its cooperation with gaming regulatory bodies from other nations. This collaborative effort will be particularly vital in areas such as data exchange, streamlining due diligence procedures, standardizing technical certifications, and facilitating the seamless functioning of online and shared jackpot games across national boundaries.”
Knew that the existing rules are being assessed, and the Malta Gaming Authority (MGA) intends to launch distinct B2B and B2C permits to simplify processes for providers. Any action that renders incorporation more seamless for those of us possessing B2B/Type 4 licenses, particularly when collaborating with MGA-licensed B2C providers, is a positive adjustment.”
The formation of the Malta Gaming Academy is undoubtedly a stride forward, aiming to furnish both domestic and global learners with the competencies required to flourish within the gaming sector. The objective is for the academy to evolve into a premier autonomous establishment, delivering customized programs that connect the gap between industry demands and the available talent, both locally and internationally.
Herrera concluded by expressing his outlook for the times ahead. “My aspiration is for Malta to transform into the ‘Silicon Valley’ of remote gaming,” he declared. “It’s a lofty objective, yet attainable, and I’ll be collaborating closely with the MGA to realize it. Our primary focus persists in being at the vanguard of the gaming realm â whether that entails nurturing inventive gaming enterprises or spearheading regulatory advancements. We recognize that our most significant hurdle is maintaining our position ahead of the curve while guaranteeing that all operations remain streamlined and impactful. We’ll accomplish this through heightened openness, collaboration with involved parties, and ultimately, by making choices that genuinely correspond with our vision for the future of gaming in Malta.”
This enhances player security and combats the notion of gaming being rife with deception and illicit activities, regardless of its veracity.
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