Gaming in Malta : an evaluation of its tax incentives

Abstract

Purpose: The purpose of this study is to evaluate the main incentives provided to the gaming industry in Malta, both those relating to i-gaming as well as digital gaming. This research study also analyses the main threats to the long run survivability of gaming companies in Malta and develop ways in which these threats may be avoided. Finally, potential incentives and areas for improvement are identified, with the aim of retaining the gaming industry in Malta. Design: In order to achieve the objectives of the study, thorough research was conducted on the relevant literature. This was complemented with 15 semi-structured interviews with the key players in the industry. These consist of 10 gaming operators, varying from i-gaming companies to digital gaming companies, 3 service providers and 2 representatives from the relevant authorities and government agencies. Findings: The findings indicate that there are various incentives offered to the gaming industry, such as the effective tax rate, double taxation treaties and tax for highly qualified persons scheme, amongst many others. Several incentives are also specifically offered to the digital gaming industry such as the development of video games with a cultural dimension. Furthermore, numerous threats were identified, including the major banking problem being faced, lack of knowledge and issues with reputation. Conclusions: The study concluded that although the industry benefits from many incentives and is considered as a stable industry, there are still areas that need improvement and if not resolved, these will lead to repercussions in the long run. Value: This research is of significance to all stakeholders of the gaming industry, including gaming companies, service providers and the relevant authorities. The main issues faced by the industry are highlighted with the aim that these will be resolved in the near future.