The development of Malta's online gaming industry from an EU perspective

Abstract

This research examines how Malta’s membership in the European Union (EU) has shaped the development of its online gaming industry between 2004 and 2024, whilst consulting 2025 as well to take into consideration recent developments. In particular, this dissertation focuses on three main areas: the EU Single Market, Malta’s regulatory framework and Malta’s tax system. As a result, this research aims to address the following research questions: (1) How did access to the EU Single Market contribute to the development of the online gaming industry in Malta? (2) How did EU membership affect the regulation of Malta’s online gaming industry? (3) How did Malta’s international tax system affect the development of the online gaming industry in Malta and how is this being affected as an EU member state? To answer the research questions, a qualitative approach was adopted using a longitudinal research design, mainly making use of data collected from the Malta Gaming Authority’s (MGA) Annual Reports (formally known as the Lotteries and Gaming Authority before 2015), statistical data from the National Statistics Office (NSO), the Central Bank of Malta, EY’s attractiveness surveys, the Moneyval report and the subsequent follow-up report, among other sources. Findings in this dissertation suggest that the online gaming sector in Malta has experienced considerable growth as shown in the total Gross Value Added (GVA) to Malta’s economy, rising from 2% in 2004 to around 7% in 2024. However, the industry peaked almost reaching 14% during the Covid-19 pandemic. Other noticeable increases are shown in the terms of employment and the number of licences issued by the MGA for operators to provide their services. With regard to regulatory and taxation developments, Malta has faced increasing pressure over the years to address the deficiencies identified, which led to Malta being grey listed and then removed a year later. Due to the increasing pressure from the EU and other international bodies including the Organisation for Economic Cooperation and Development (OECD), Malta has responded carrying out several key changes including strengthening its anti-money laundering and countering the financing of terrorism (AML/CFT) measures and introducing new legislation including the Transfer Pricing Rules (TPR) and transposing the Anti-Tax Avoidance Directives (ATAD I and II). As a result, this research has shown that since Malta became an EU member state, the online gaming sector not only experienced growth but was also influenced through international pressure impacting the trajectory and intensity of the country’s reforms. However, the impacts of EU membership on Malta are multi-faceted. On the one hand, membership could provide benefits, whilst on the other it could bring challenges and constraints. Overall, the benefits of EU membership on Malta’s online gaming industry have been substantial but are contingent on continuous adaptation to evolving EU and global norms.