How did Malta become the world’s gaming capital?

A tiny island archipelago with a fifth of the surface area of London and half a million residents is home to 10% of the worlds gaming companies.

October 22, 2020
5 mins

It seems unbelievable at first. A tiny island archipelago with a fifth of the surface area of London and half a million residents is home to 10% of the worlds gaming companies. Malta is well established as the world's gaming capital. But how did the Mediterranean country achieve this extraordinary feat?

A long history of gaming in Malta

Sports betting and gambling has a long history in Malta. Take Cippitatu, an ancient Maltese game of chance where players place bets on how a kind of spinning top would fall - with the winner taking all. In 1922 the Lotto Act was passed in Malta to regulate the game. Then, over the next 100 years, several pieces of legislation were passed which covered a variety of gambling and sports betting activities. 

However, it was in 2004 that things really took off. Under Prime Minister Lawrence Gonzi, Malta became the first country to introduce online gaming regulations in the EU. These regulations gave internet based gaming companies a clear legal framework to operate in. As online gaming took off in the following decade, Malta's regulatory environment set the country up for success. Where other countries have unclear and confusing rules for iGaming, Malta’s laws are easy to understand, which means firms can plan for the long term.

Today almost 300 online gaming companies call Malta home, with a broad mix of casino type games, lotteries, sports betting and companies running other events such as poker and bingo. Big names in the gaming industry have chosen to set up their headquarters in the country including major players like Betfair, Betsson and Tipico - to name just three. Malta also hosts the Summit of iGaming in Malta (SiGMA) probably the biggest gaming conference on the planet. 

More than just igaming regulation 

There is no doubt that Malta’s gaming friendly regulations have played a major role in the country’s success in online gaming. However, several other factors also came together to contribute to its leading position:

Gaming business friendly taxation 

Malta is a low tax destination for businesses, with corporate tax rates that are effectively as low as 5%. Unsurprisingly, gaming businesses have been keen to set up in this jurisdiction. Compare this to the UK - one of the most gaming-friendly countries in Europe - where online gambling companies are taxed 21% on the profits. 

EU membership 

As a member of the EU, Malta gives any company working on its territory the ability to provide online gaming anywhere in the bloc. Furthermore, the EU's freedom of movement means that it is very easy for entrepreneurs and gaming professionals from elsewhere in the continent to relocate to Malta and work there. 

English speaking

English is an official language in Malta which makes it simple for foreign companies to set up on the island and understand local laws and regulations. 

Reliable internet connection 

Malta has high quality fibre internet connections to the rest of Europe and the world. For companies working in online gaming, where high-speed data transfer is crucial, this technological backbone is invaluable. 

Relatively low cost of employment in Malta

While the standard of living in Malta is high, employment costs are relatively low. It will cost a gaming company significantly less to hire a developer or graphic designer in Malta than it would in many other European countries. 

Maltese education

Malta’s citizens receive a high standard of education and its universities churn out graduates who have valuable skills for the gaming sector - both in terms of software developers and technology skills, but also lawyers, marketers and business development professionals. The University of Malta even has a department dedicated to the industry. 

A wider ecosystem 

Besides being home to hundreds of major gaming firms, Malta is also home to a wider ecosystem of support services. Whether you need a lawyer with expertise in online gaming, an accountant or a search engine optimization agency, it is easy to access local support while you grow a gaming business. 

More broadly, Malta is an attractive place to live and work. It came first place globally in the World Economic Forum’s 2019 ranking for macro-economic stability, and scored high on many other competitiveness measures too. All of which helps explain why this Mediterranean island nation has come to dominate global gaming. 

Gaming-ready payment services

Another factor that has surely influenced Malta’s gaming success is the country’s established finance sector, which provides plenty of specialist services. 

For example, Xace, which is licenced to operate in Malta, provides gaming-friendly payment services (in EUR) to professional gamers and startups operating in the sector. With a Xace Malta account you can easily place bets with any online gaming company in Malta and also manage business finances - paying direct debits or staff salaries in multiple currencies.  

Despite its size, Malta's place as a global superpower in online gaming didn't happen by chance. Instead, the country played its hand well with a combination of regulation, finance and making the most of its unique advantages.

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