Figures published in the annual report of the Malta Gaming Authority show that the gaming industry, mostly online, contributed €924 million last year – a drop of over €600 million when compared to 2019.
State coffers suffered hundreds of millions in losses last year, taking the country’s deficit to record levels surpassing the €1.5 billion-mark.
The losses are mainly attributed to lower gaming taxes generated due to economic uncertainty caused by COVID-19.
Malta’s four licensed casinos on land faced months of closure, and while this did not affect the online industry there were still less players and lower bets recorded in the pandemic year in Malta.
Yet other countries reported a sharp rise in online gambling as individuals were confined to their homes during different lockdown periods. While this is not referred to in the annual report, a possible explanation is that companies registered in Malta shifted some or all of their businesses onto licences held in other countries (the larger gaming companies tend to hold more than one licence), a financial services practitioner told The Shift.
The MGA report shows the regulator itself also generated less profits. In 2020, the MGA’s total revenue dropped by 5.3%, from €82 million in 2019 down to €77 million the following year.
MGA fees brought in €12.2 million, mostly consisting of licence fees (€8.4 million), application fees (€300,000), and other revenue (€3.5 million).
The bulk of the revenue – €65 million – was from gaming companies’ compliance contributions and levies, although this decreased by 10% when compared to the previous year.
As Malta’s gaming industry was also severely hit by the prospect of greylisting, recently confirmed, the regulator attempted to increase its oversight after years of loose controls that led to negative international headlines particularly over some companies’ links to the Sicilian mafia.
It increased its checks on the industry by some 15%, carrying a total of 1,500 inspections. This resulted in 69 warnings to various companies and the suspension of three licences. The MGA also cancelled 12 licences in 2020.
Speaking to The Shift, the association of igaming companies said the government’s ability to ensure that Malta’s stay on the FATF’s list “doesn’t drag on for years” will be a direct factor in companies’ consideration of whether it is worthwhile to remain on the island.