The Malta Gaming Authority has disclosed that the gaming industry’s total gross value added for 2020 is expected to be €924 million, no longer placing it among the top three contributors to the country’s economic value.
The revised GVA estimates for the gaming sector are reported to be lower than in previous Annual Reports, but the MGA noted that during a “exceptional year” in which the total economy value added fell by 4.3 percent, the gaming industry recorded one of the highest growth rates in value added relative to other sectors, which growth rate surpassed the growth rate of other industries.
Annual Report and Financial Statements
The MGA published its Annual Report and audited Financial Statements for the financial year ending December 31, 2020, in the midst of a year marked by well-documented worldwide consequences.
The report analyses the success of the Maltese gaming sector, as well as a medium-term vision into the future, while offering a summary of activities accomplished throughout the year and highlighting important projects undertaken by the Authority.
The number of companies licenced by the MGA as of the end of 2020, comprising both online and land-based entities, was 323, with 328 gaming licences and 357 game type approvals to offer various sorts of games under the B2C licence.
Taxes and employment
The MGA collected €73.5 million in compliance contribution fees, levies, and consumption tax for the first 12 months of 2020. The gaming business is expected to directly generate over 8,300 employment in FTE terms by the end of 2020, with 91.1 percent of these individuals working in the online sector.
The MGA attributed the increase in employment in the online gaming sector last year to “planned investments and recruitment by a small number of large firms” that continued to work on their initiatives despite the pandemic.
Furthermore, when the employment created by activities in or linked with the gaming industry is taken into account, the total employment in the gaming sector in Malta in 2020 is anticipated to be 12,398, or roughly 4.7 percent of the entire workforce.
To counteract the spread of COVID-19, all land-based casinos in Malta were required to temporarily close their venues in March 2020 through Legal Notice 76 of 2020, entitled Closure of Places Open to the Public Order 2020.
These closures, which will reopen on June 5, 2020, had an impact on new player registrations at Malta’s four land-based casinos – Dragonara Casino, Portomaso Casino, Casino Malta, and Oracle Casino – with a reported 55,676 registrations compared to 175,433 registrations in 2019.
Furthermore, the overall number of trips to local casinos fell by 49.8 percent year over year to 471,862, compared to 940,766 the previous year.
Online sector shows resilience
Despite the negative impact on the land-based sector, the online equivalent showed some resilience. While sportsbook operators came to a halt, other forms of online entertainment grew in popularity.
The number of gaming companies offering online services increased to 314 by the end of 2020, up from 284 in 2019. In addition, the number of active player accounts registered on MGA-licensed websites increased by 18.1 percent in 2020, to 36.2 million. Despite the reopening of the land-based sector, the number of active players grew at “very much the same pace of earlier years,” according to the research.
Along with player accounts, the expected number of new active player accounts increased by 15.5 percent year over year to 15.9 million.
Revised gaming licence applications
The MGA received 58 applications for gaming licences in 2020, according to the report, and 68 licences were approved. Furthermore, the MGA rejected 20 gaming applications or the applicants withdrew them, with the Authority cancelling 12 licences and suspending three more owing to various regulatory violations.
Dr. Carl Brincat, MGA CEO, said in a statement accompanying the release of this report: “The year 2020 will undoubtedly be remembered for the challenges the pandemic presented us with, and I am proud of the Authority’s employees who worked tirelessly to ensure that we continued to perform the functions required of us at law.
“Keeping the ship steady during a challenging year serves as a strong foundation for us to look ahead with renewed commitment to keep building on the positives and improve on our shortcomings, to reach new heights in our regulatory approach.”
The Authority also issued 69 warnings, three licences were suspended, and another 12 were cancelled, according to the 2020 Annual Report. The Compliance and AML department conducted thirty compliance audits, one of which involved a live studio, and 324 desktop reviews, with 98 identifying issues that were then escalated to the Compliance and Enforcement Committee.
The Fit & Proper Committee also found eight persons and corporations to be in violation of the Authority’s probity criteria, primarily due to the possibility of money laundering or terrorist financing.
A total of 1,475 criminal probity screening checks were conducted over the 12-month period of 2020, an increase of 13.5 percent over the previous year.
Click here to read the Malta Gaming Authority’s complete annual report.