Malta’s lure as a gaming jurisdiction goes beyond the attractive tax regime and the island is well geared to withstand competition from countries opening up to the industry, the Finance Ministry told The Times Business.

Denmark is among a set of countriespreparing to welcome operators as it issues new licences under new legislation

Steps to ensure the jurisdiction remains abreast with developments in the industry include recent proposals to Parliament for legislation to allow for the exploration of new products such as games of skill with prize.

Denmark is among a set of countries which are preparing to welcome the igaming operator community as it begins to issue gaming licences under new legislation early next year.

A Finance Ministry official pointed out it had yet to be seen whether Denmark will prove an attractive proposition to operators when its regulatory regime will come into force and it is fully operational.

Since becoming the EU’s first member state to regulate online gaming in 2004, Malta has gained considerable experience in the area with the regulator, the Lotteries and Gaming Authority, earning a reputation as a veteran with one of the highest regulatory standards, the official stressed.

He added Malta’s igaming regulations were designed for longevity as they are technology-neutral – meaning they apply to innovations such as mobile platforms. Service provision has also evolved around the sector and a developed landscape including providers of technology, law, finance and recruitment expertise was available to licensed operators.

“Apart from having an effective regulatory approach, entrepreneurs seeking to invest in a particular jurisdiction look for specific elements which are key to their decision-making when choosing the right jurisdiction,” the Finance Ministry said. “These include a strong financial services and banking industry, clear taxation frameworks, a stable and performing economy, a skilful workforce, strong telecoms infrastructure, a good quality of life and a sophisticated pool of service providers.”

But as new competition looms, there appears to be some concern within the local sector that Malta’s igaming community could dwindle in the next four or five years unless the jurisdiction comes up with innovative ideas and solutions – other than the tax regime.

The Finance Ministry said authorities were working to mitigate that risk and were to continue working to ensure the sector’s growth.

“Three years ago, there was the same concern,” the official added. “Three years later, the sector grew by around 25 per cent. Such growth was not a coincidence: it involved the government, in tandem with the LGA and other agencies working to ensure an approach that is current.”

Denmark’s new law comes in the wake of a recent nine-month investigation by the European Commission which concluded that online gaming was more competitive than operations like casinos and slot machine operators confined to one jurisdiction. It found it was justified that igaming licencees paid 20 per cent tax on profits against tax of up to 71 per cent paid by the rest of Denmark’s industry.

Private operators from outside the country will be able to apply for licences to offer sports betting online and offline, and online casinos. Bingo and horse race betting offerings will remain the domain of the state-owned monopoly Danske Spil.

Malta igaming tax regime remains more attractive with licence holders paying rates starting at 0.5 per cent for sports betting.