How Malta Became a Global iGaming Hub: Successes and Challenges

Before Malta gained independence, it was an important crossing point for trade from Europe, Africa, and the East. However, its significance as an independent state in the global market has changed slightly, though not diminished.

In 2004, Malta was the first European Union state to pass online gaming legislation. MGA strict licensing provides financial security and protection for players on casino sites, drawing in more and more players and businesses to MGA-approved platforms each year. These factors have been the central drivers of Malta’s international iGaming hub status.

What makes Malta attractive for iGaming?

Despite its small size, Malta has a strong economy and its population has a high income and GDP per capita and these factors ensure the high solvency of its residents.

Moreover, due to its geography, Malta needs to develop its service sector, as its small size and location severely limit the extraction of resources, forcing the country to import oil and food products.

One might think that a small population would not attract casino operators, as it is more economically advantageous to locate in regions with large populations. This did not stop Malta from becoming home to numerous iGaming companies, including those recommended by LuckyGambler, thanks to its wise approach to legislation. The gambling industry has become a key sector of the economy, with revenues from online gambling accounting for a significant percentage of the country’s GDP. Beyond traditional online casinos, Malta has also become a hub for social casinos – platforms where players can enjoy games for fun or virtual rewards rather than real money. These social gaming platforms have expanded the reach of the industry, attracting casual players, fostering community engagement, and creating additional opportunities for iGaming companies to innovate and diversify their offerings.

Malta’s successes in online gambling

As mentioned earlier, the service and entertainment sector is a key component of Malta’s economy. Its success was primarily due to the timely steps taken to improve the legislative framework for the development of this sector, and iGaming was no exception. Here are a few factors that have made Malta the best example of successful economic attraction of casino operators:

1. Reliable legislative regulation

Many casino operators choose to conduct their business on this island because the MGA license offers many advantages, such as reduced taxation, as its purpose is not to restrict providers but to stimulate them for mutual benefit.

2. Global services

Having an authorized Maltese license guarantees unhindered access to gambling activities around the world. The license has gained recognition throughout Europe, allowing operators to enter various markets without significant regulatory barriers.

3. Development of protective measures for players

Maltese legislation has a number of regulations to ensure player safety. First and foremost, only qualified operators can obtain a license. This also includes responsible gaming measures, such as providing self-exclusion and fair dispute resolution. All games must use independent random number generators, and user data is protected by advanced encryption.

4. Improving the country from within

The influx of a large number of new companies has paved the way for new jobs and infrastructure upgrades. Moreover, it has served as an impetus for the creation of new specializations at universities and the exchange of international experience for training new specialists.

Challenges faced by Malta

Despite its achievements, Malta has experienced several difficult stages on its way to becoming an international online gambling hub:

1. Initial attraction of casino operators

Malta’s improved legislation required excessive bureaucracy, which could scare off new companies entering this market. First and foremost, there were financial costs: each type of gambling required its own license, as well as substantial authorized capital. Obtaining a license could take up to a year and required registering a business and conducting operations on the island itself, in accordance with current legislation.

2. The “gray list” of international organizations

In 2021, the Financial Action Task Force added Malta to its gray list due to problems found in the financial sector. Now, the state needs not only perfect legislation, but also additional efforts by the authorities to prevent illegal bank financing through shell companies or loopholes in the law.

Final thoughts

The popularity of the iGaming industry in Malta is growing every year. The prestige and numerous privileges of the MGA license continue to attract a large number of solvent players and innovative companies. 

The Maltese government has been able to develop a legislative framework that promotes market development and ensures the security of games and personal data. All of this helps to prevent illegal activities and promotes fair and reliable gambling.