Malta’s Gaming Industry Transforms into a Global B2B Powerhouse

Malta, long celebrated for its dominance in business-to-consumer (B2C) gaming operations, is now emerging as a global leader in business-to-business (B2B) activities, marking a significant shift in its gaming industry. This transformation underscores the nation’s adaptability to market trends and its commitment to fostering long-term growth.

“The success story for this industry in Malta started when a limited regulatory regime was introduced. It then grew, became more sophisticated, and evolved into what we see today,” remarked Olga Finkel, Co-Founder and Partner at WH Partners, during a panel discussion at SiGMA Europe. The discussion focused on Malta’s rise as a premier B2B hub, with Finkel highlighting the nation’s strategic pivot in response to global trends. While Malta initially dominated B2C operations, the increasing prominence of country-specific licences prompted a shift toward strengthening its B2B sector. “It seems there has been a shift in focus toward developing Malta as a B2B hub,” she added, emphasizing this evolution as a natural adaptation.

The gaming industry remains a cornerstone of Malta’s economy. According to the Malta Gaming Authority (MGA), the sector accounted for 7% of the nation’s Gross Value Added (GVA) in 2023, a figure that has held steady in recent years. The sector’s importance became even more evident during the COVID-19 pandemic, when it helped offset losses in tourism and retail. Between 2019 and 2023, the industry’s GVA increased by 25%, reaching approximately €1.34 billion. The MGA noted that this growth highlights the sector’s resilience and its ability to support ancillary industries such as IT, real estate, and administrative services.

Malta’s foresight in establishing a regulatory framework for B2B activities dates back to 2004, laying the foundation for a diversified gaming ecosystem. This early recognition of the sector’s potential enabled the country to attract a growing number of B2B operators and solidify its status as an innovation hub. “Initially, Malta was the go-to jurisdiction for B2C offerings, but as the industry evolved with the introduction of country-specific licences, Malta had to adapt,” explained Corinne Valletta, General Counsel at Betsson. She characterized this evolution as a natural progression that complements Malta’s established reputation. Carl Brincat, Director at LeoVegas, shared a similar perspective, stating, “Innovation is now happening among B2Bs. Malta has attracted more of these entities by evolving alongside the industry.”

The nation’s robust regulatory framework has been instrumental in facilitating its B2B transformation. Yanica Sant, Group Legal Director at Evoke plc, underscored the importance of regulatory expertise, noting, “Malta gets it. B2B regulation is now in its second wave of legislation here, making it easier for businesses to communicate with regulators.” Sant also advocated for greater international collaboration, saying, “It would be interesting to see more regulators working together on B2B regulation. There are fewer differentiating factors in B2B than in B2C, so collaboration could streamline processes globally.”

Malta’s gaming industry’s evolution is further supported by targeted licensing regimes. The MGA has implemented a sectoral development strategy aimed at promoting B2B activities while managing the sector’s risk profile. By the end of 2023, the MGA had licensed 316 companies operating online and land-based gaming businesses, holding 326 gaming licences and 300 B2C approvals, alongside 210 B2B approvals. These figures reflect the sector’s adaptability and innovation. The MGA also reported collecting €80.6 million in compliance contributions, licence fees, levies, and consumption taxes in 2023, emphasizing the industry’s fiscal importance.

The gaming sector is also a significant employer in Malta, with 16,428 full-time equivalent (FTE) positions linked to the industry by the end of 2023. This represents 5.2% of the nation’s total workforce. Of these positions, 10,519 FTEs were directly employed by MGA-licensed companies, with 91% of these roles in the online gaming sector. Additionally, indirect employment in areas such as legal, consultancy, IT, and real estate has grown, reflecting the industry’s broader economic impact.

While the shift toward B2B activities bolsters Malta’s position as a global hub, challenges persist. Finkel highlighted the need for regulatory harmonization, stating, “As more countries introduce B2B requirements, it’s crucial to focus on harmonising regulatory goals step by step to make life easier for everyone.” Despite these challenges, Malta’s legislative flexibility continues to support innovation. “Even if a business has a new, unconventional idea, Malta’s regulators are open to discussions, ensuring innovation aligns with legal objectives,” noted Brincat.

Experts agree that Malta’s regulatory infrastructure and adaptability will sustain its leadership in the gaming sector. “Malta’s infrastructure and regulatory flexibility ensure it remains a critical player in this space,” affirmed Valletta. Finkel concluded with a forward-looking perspective: “While global harmonisation of regulations may be a distant goal, focusing on achievable milestones will help Malta and the industry continue to thrive.”

As Malta transitions from a B2C pioneer to a B2B powerhouse, its gaming industry exemplifies resilience and innovation. Through strategic foresight, robust regulation, and a commitment to fostering growth, Malta is poised to lead the next wave of iGaming advancements.

By fLEXI tEAM