BUSINESS

Gaming accounts for 13.2% of Malta’s overall economic activity

TAGs: Dragonara, Malta, malta gaming authority

malta-gaming-authority-2018-reportMalta-licensed gambling operators increased their share of the local economy in 2018, according to the latest annual report by the Malta Gaming Authority (MGA).

On Tuesday, the MGA released its 2018 Annual Report and Financial Statements, which offers a detailed picture of the local gaming industry as of December 31, 2018. The gaming sector accounted for 13.2% of Malta’s overall economic activity last year, the fourth-highest producing sector, and nearly two points higher than 2017’s share.

There were 273 MGA-licensed online companies at the end of 2018, down slightly from 287 at the end of 2017. However, the MGA noted that it had revised its licensing scheme last year, allowing operators to apply for a Corporate Group License, which allows multiple companies to operate under a single license. Nine companies representing 17 entities are currently licensed under this group designation.

The MGA also introduced its new two-license system – one for B2B operations, another for B2C activity – last August. As of December 31, the B2C category accounted for 75% of the total license base.

The MGA terminated 37 licenses last year at the operators’ requests, while four licenses were suspended and eight licenses were cancelled following probes by the MGA’s Enforcement Unit. Eight license applications were rejected last year for various shortcomings.

The Maltese gaming industry accounted for 6,794 full-time equivalent jobs in 2018, up slightly from 6,673 in 2017. The online sector accounted for the bulk (5,950) of these full-time positions. The MGA previously announced that its licensees were having difficulty finding enough qualified locals to fill its job vacancies.

Type 1 gaming – slots, table games and other casino products – accounted for 55.4% of total B2C net gaming revenue in 2018. Around 39% came via Type 2 gaming (betting on sports and eSports), while the remaining 5.5% was from Type 3 (poker, bingo and lottery messenger) products.

The number of active online accounts registered via these licensees shot up 29.6% year-on-year to 18.1m, along with a 27.7% rise in new customer registrations to 12.35m.

As for the MGA’s ‘sandbox’ test of allowing its licensees to accept virtual financial assets (VFA) for wagering purposes, the first phase launched January 1, 2019. The second phase, which involves leveraging distributed ledger technology within a licensee’s technical setup, will get underway later this year.

Malta’s four brick-and-mortar casinos reported a modest 2.7% rise in visitation last year, with non-Maltese accounting for 55.4% of total visits. The number of high-rollers brought in by junket operators jumped by 11% to a devilish 1,666. However, these big spenders may have won more than they lost, as total casino gaming revenue was up only 4.7% year-on-year.

One of these casinos, the Dragonara, has just been granted a 64-year extension of its land lease. Malta’s parliament unanimously approved the extension to Dragonara Gaming’s original 10-year lease despite the lack of a competitive tender, which has caused some consternation among the Dragonara’s rivals. The new lease calls for annual rent of €500k for the first 15 years, rising to €1m with additional 5% increases every five years thereafter starting in the 21st year of the lease.

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