Thanks to early law makers, Malta has been able to keep ahead of the game and adapt to changes in technology

On the eve of this issue's production, the possibility that those seeking to relocate to Malta to establish a base for i-gaming operations finding themselves paying only 15 per cent income tax became a reality. It is just the latest of a series of siren encouragements to go for this most charming of bases; indeed, one first has to grasp the incongruity of the EU’s smallest state representing the EU’s largest i-gaming jurisdiction. But it isn’t hard to understand why.

The tax concession to highly qualified persons including senior executives relocating to the islands is only one of an irrepressible succession of upsides, with the almost total absence of balancing downsides, to a Malta licence. The cap on personal income tax had been put into place for the financial services industry, so it was a logical step to extend it to the online gaming business. Beyond that concession, however, there are many other compensations for moving to Malta and setting up in business there with an internet gambling licence.

Twenty years ago, when IT was in its infancy, a Maltese government think-tank came up with a few imponderables. Given that the islands (there are several in the group but only the main island and its smaller neighbour, Gozo, are serious destinations) have little beyond considerable charm and a tourist industry to their credit, the policy makers began to think outside the box. It might have been in its infancy, but its potential was obvious. Malta began to prepare for it and to educate for it. The country began to put into place the taxation benefits that attracted the financial services industry to the islands and a rich culture of technology infrastructure readily grew.

Today, Malta has a framework of interlocking support services which will rival those of any other gambling jurisdiction. But more than that, it has the experience to go with it. Malta opened its doors to remote betting as far back as 10 years ago and expanded to an i-gaming jurisdiction in 2004. Since then it has kept ahead of the game by being very fleet of foot, an agility which owes much to those early law makers who put into place legislation that was flexible and which enables its watchdog Lotteries and Gaming Authority (LGA) to act rather than to keep returning cap-in-hand because the law has been outstripped by technology. What the law is pretty prescriptive on, however, is matters of player protection, anti-money laundering and responsible gaming.

“Look at those countries which have moved towards establishing their own regulatory regime,” said Reuben Portanier, CEO of the LGA. “With only an exception or two many other European countries, which have their own regulatory system, make no acknowledgement in their legal regime to the fact that technology changes continuously, like for example the advent of gaming applications on the iPhone or other mobile platforms.”

This report can be read in full in the Malta Special Issue.