Servicing Malta's dynamic iGaming industry

Our Tax Partner, Paul Giglio, talks with the Commercial Courier about the recent developments in the iGaming Industry.

From your perspective, how has the iGaming industry developed in recent years and what have been the highlights?

The gaming industry is facing a dynamic and highly-complex economic and financial environment, compounded by major regulatory changes, including the new Gaming Act that will be discussed in Parliament over the next few months. We also see an environment where, for some time now, there have been several mergers and acquisitions. Our long-term outlook for the market is one where the ‘big boys’ are the principal actors, with the larger companies acquiring smaller operators and start-ups, whose strategies are often geared towards a buy-out. 

How does Forvis Mazars service the sector?

We have been servicing gaming companies since the onset of the industry in Malta. We believe that our role as advisors is to help our clients to think and act long-term. We aim to ensure that our services are relevant, that they bring added value to our clients and their many stakeholders, and to help clients meet their business objectives. We provide a one-stop-shop service, assisting in corporate structuring, tax planning, licensing, VAT optimisation and compliance, as well as accounting and audit services. We are also approved MGA compliance and systems auditors, and have been serving in this role for the past seven years. 

How do you see the iGaming industry and your services to it developing in the years to come?

I think that consolidation is already a reality, and the industry will see fewer and larger players in the market. As these continue to grow and mature, greater emphasis will be placed on efficiency, innovation and technology. I expect to see greater investment and initiatives in the automation of operational processes, thus reducing cost and improving player experience. Understanding customers through business intelligence and data analysis will also continue to play a critical part in product innovation, personalisation and optimisation. In the meantime, current developments continue to centre on the OECD’s measures on Base Erosion and Profit Shifting (BEPS), while, in 2019, the EU’s Anti-Tax Avoidance Directive will also kick in and affect areas such as thin capitalisation rules. Transfer pricing for the acquisition of intra group services will also need to be analysed in this context. However, most of our clients are already developing their structures with such a framework in mind. In the gaming sector, many companies are currently ‘getting their house in order’, especially those that are preparing for an IPO and want to showcase the highest level of corporate governance. I am glad to say that the various listed companies which feature in our client portfolio are very much ahead of the game in that regard.

This article first appeared in The Commercial Courier April/May 2018