Despite what the EU wants, Malta is sticking to its guns with its cash cow online gaming.
As a small economy offering favourable taxing and regulation conditions, Malta’s openness to regulation gives them a European market niche.
At the same time, the European Union is pressuring Malta to join the rank and file with more protections.
Said pressure is traceable to a new definition of illegal sports betting put forth by the Council of Europe at its Convention on the Manipulation of Sports Competitions as “any sports betting activity whose type or operator is not allowed under the applicable law of the jurisdiction where the consumer is located.”
Singling out Malta?
The semantics of the statement, as it applies to Malta, would seek to deem operators licensed in Malta as engaging in activity which is not conforming to the supposed jurisdiction of greater overall EU policy.
Malta Gaming Authority Executive Chairman Joe Cuschieri cut through the implications in bluntly stating that the “definition will effectively render illegal all operators who offer their services via their Malta Gaming Authority licence in other European states.”
This certainly appears to be shaping up as a significant territorial conflict: Malta has different licensing restrictions than the prevailing norms in the rest of European countries, while the EU, at root a financial organization, wants a uniform policy across all member states.
Operator Benefits in Malta
A huge selling point for Malta applicants is the relative ease of gaining the national license and the freedom it affords applicants to serve other Europe-facing players.
The EU does not want one country gaining unfair advantage through favourable licensing that earns them the lion’s share percentage-wise of licensing agreements for Europe-facing operators.
Malta’s Economic Reliance
Cruschieri further defends his organization’s position by pointing out that as of the conclusion of 2015, “the gaming industry in Malta accounts for circa 11 per cent of Malta's GDP, employs 8,000 people and has contributed €700 million to the Maltese economy.”
The Meaning of Jurisdiction
This is a fascinating issue because one of the very smallest EU member economies is going to fight potential EU legislation tooth and nail, based on the inherent question of the extent of authority of the EU over member states, which just received a kick from reality with Brexit.
The question is not if Malta’s stand could initiate a mass exodus of EU members, but whether it could initiate a mass exodus of operators, and the subsequent impact on revenue percentages of current regulating EU countries, many of whom have worked long and hard to adapt their new models which are still works in progress.