The Rise Of The Maltese Economy

The Maltese economy over the past decade has gone from strength to strength. With a population of less than half a million inhabitants, it’s notable how well it’s progressed across its various sectors. In this article, we’re going to examine some of the main sources of income for the state of Malta, with emphasis on how the gambling and gaming industry is changing the way the economy generates revenue in comparison to when it was first on the rise.

A brief history of Malta’s economy

Before 1964, Malta wasn’t considered an independent country. On September 21^st of that year, the Maltese people voted Elizabeth II to the position of Queen of Malta and their head of state. This would permanently impact the nation’s economy. Following this, the elections that occurred in 1971 saw the Labour Party take power, which brought strong economic alliances with Libya and North Korea.

During the 1990s, Malta’s economy was still growing. Of course, in a booming economy, as unemployment falls, prosperity abounds and civilian morale rides high with it. Although poverty will forever be an issue across many European states, Malta are attempting to combat this through various government policies.

Fast forward to modern-day Malta, and the Maltese economy is heavily dependent on foreign trade, manufacturing (such as electronics and pharmaceuticals) and of course, tourism. More recently, many gambling services providers have found home within the state of Malta.

Over the past decade the growth in the Maltese economy has led to the creation of well over 37,000 new jobs. This figure is even more impressive considering that the country has a total population of around 430,000.

Tourism

Like most coastal European nations, tourism plays a huge part in Malta’s revenue stream. Droves of holidaymakers pack the tiny island nation every season pumping extra cash into the Maltese economy. Tourism in Malta on average contributes to about 15% of the nations GDP. Back in 2004, this number was a staggering 40% — highlighting just how crucial the tourism industry was to Malta in previous years. Although the success of tourism can be highly dependent on the economy of other countries, it is a market that is still considered lucrative. It would take something drastic happening to Malta to cause individuals to not visit the island anymore. Most holidaymakers (as of 2015) come from the UK, Germany and Spain.

Pharmaceuticals

Over the past decade, Malta’s healthcare and pharmaceutical industry (mostly medical instruments) has experienced rapid growth. This should ensure a promising future not only for the Maltese pharmaceutical industry, but also for the country’s general economic growth. The pharmaceutical industry is one that should remain stable for the Maltese economy owing to the speed with which advances in medical science and new drugs are being developed. In addition, the demand for health care is not diminishing which should ensure healthy growth within the sector in Malta and overseas.

The growth of the Maltese pharmaceutical industry will also heavily impact the nation’s education system, and hopefully attract fresh, aspiring talent to the shores of Malta. Both students hoping to develop their career, as well as experienced life-science professionals looking to further their skills in their respective fields should find ample opportunity within the thriving Maltese pharmaceutical industry.

Maltese banking system

As stated by KPMG, the Maltese banking sector has grown rapidly in the past decade. This growth has stabilized their system in comparison with previous years. It’s been achieved through cautious practice as well as local banks being careful with the types of loans they allow. In addition, these banks have increased their ratio of assets against certain loans. This is also supported by low unemployment rates enjoyed in Malta. People who are in regular work will generally need to borrow less than those who are struggling financially.

The gambling industry in Maltese economy

Malta has successfully established itself as Europe’s gambling hub, and their low tax rates are an obvious reason why so many companies call the island home. With Malta attracting many foreign providers over the years, the gambling industry has thrived. This includes sports betting, web-based casinos as well as other online gaming.

Many international gaming companies use Malta-based servers to operate services across the EU. The role of the Malta Gaming Authority (MGA) in overseeing the industry is therefore important not just locally but across Europe. The likes of NetBet Enterprises Limited, BetFair Casino Limited, and LeoVegas Gaming Limited are amongst the bigger names that are licensed under the MGA but the full list is enormous for such a small jurisdiction.

Valetta is the world’s epicentre for online gambling

iGaming + affiliation

The growth of iGaming in Malta has been phenomenal. Favorable tax legislation towards foreign companies has allowed the sector to absolutely thrive, and today nearly 300 operators call the island home. It’s not just an agreeable legal climate that these organizations enjoy however. The nation’s impeccable financial services industry makes the prospect of doing business in Malta an appealing one for companies deciding to relocate. This favorable climate has also seen many affiliate businesses (companies that generate income by generating leads for the operators) establish their operations on the island.

According to a presentation delivered by the Maltese Finance Minister, Tonio Fenech, during a seminar on gambling in 2009, iGaming operators in Malta make great contributions towards the wider economy. Gambling companies employ over 2,500 people, and combined the industry generated over 15.6 million Euros in tax revenue in 2008 alone. The sector is showing no signs of slowing down either. A report from the Malta Gaming Authority claims that during the period between January and June 2016, those under their jurisdiction generated some 12% of the entire nation’s GDP. When compared with the same period the previous year, this rate represents an 11.9% increase. In addition, the number of those employed by the industry increased by a whopping 31% during the same period.

For the Maltese people and their economy, the rise of iGaming is of course great news. Foreign companies setting up shop on the island have helped provide Malta an additional source of economic stability on top of the traditional tourism, and equally expanding pharmaceutical industries. With online gambling continuing to grow and reach new markets, the future looks promising too. This makes Malta one of the few member states with such an outlook in the face of the rapidly crumbling European Union.