In a recent SiGMA Podcast episode, host Trevor De Giorgio explored Malta’s gaming sector with economist and partner at Seed, JP Fabri. The discussion leaped back into Malta’s gaming investment history and its evolution, a sector driven by its innovative regulatory frameworks and strategic positioning in the global market.
Historical evolution
The conversation began with a look back at Malta’s early investment in the gaming sector. As JP Fabri noted, Malta’s approach to economic development has consistently leveraged its ability to innovate within its regulatory frameworks. “As a small open island state with very limited resources, we only have one key advantage: the ability to be innovative when it comes to jurisdiction, the law, the regulation,” Fabri explained. This strategic positioning has enabled Malta to carve out niches in various sectors, including maritime, aviation, financial services, and eventually gaming.
In the early 2000s, Malta identified an opportunity within the gaming industry, which was largely unregulated in Europe at the time. The country’s decision to embrace online gaming and lotteries was part of a broader economic diversification strategy, capitalising on its already strong IT sector. “Back then, the decision was taken to start embracing the online world related to gaming, lotteries and all of that, and then the sector continued to evolve,” Fabri recounted.
Technological integration and regulatory innovation
The gaming industry in Malta has not remained static; it has undergone transformations driven by technological advancements and regulatory needs. Fabri highlighted the importance of regulation as a trust stamp, a factor that has been pivotal in maintaining Malta’s competitive edge. “Regulation ultimately is a stamp of trust,” he emphasised, underlining the country’s foresight in establishing a regulatory framework that could keep pace with technological trends and consumer demands.
One of the key areas discussed was the integration of new technologies like virtual reality (VR) and augmented reality (AR) into gaming. Fabri noted, “How do we integrate a better customer experience, interface, technology, VR, AR? How do these come into the picture?” The discussion also touched on responsible gaming and the role of compliance within the industry. The development of digital identities and open banking were highlighted as future trends that could further enhance the gaming experience and operational efficiency.
Future directions and emerging markets
Looking ahead, Fabri drew a vision for Malta’s gaming sector that includes embracing new markets and technologies. He pointed out the dynamic growth potential in regions such as South America, Latin America, and Africa. “We have very dynamic markets of growth beyond the European markets,” Fabri stated, indicating that Malta could serve as a base for companies looking to penetrate these markets.
The evolution of financial technologies, particularly in payments and digital identity, is another area where Malta could lead. Fabri discussed the concept of open banking and its potential to revolutionise the gaming industry by improving transaction monitoring and customer verification processes. He said, “It would be interesting to see how the gaming sector can leverage open banking to improve compliance and customer journeys.”
In concluding the podcast, Fabri stressed the importance of continuing to evolve Malta’s regulatory frameworks and maintaining its attractiveness as a jurisdiction. “How do we continue to ensure that these companies have access to banking payment solutions within the country?” he posed, emphasising the need for ongoing innovation and adaptation.
SiGMA East Europe, Budapest, September 2024
Looking ahead, the gaming industry will shift its focus to Eastern Europe this September with the SiGMA East Europe Summit 2024 in Budapest. This event is expected to attract industry professionals from across the region, providing a platform for networking, business development, and exploring the latest trends in the gaming sector.
