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Want proof of how the online gambling industry helps stimulate local economies? Look no further than the tiny Mediterranean island of Malta.
Located off the coast of Italy, Malta relies more on just tourism, arguably its biggest industry and cash cow. Malta also serves as one of the largest online gambling centers in the world, serving mostly European punters.
While tourism is on the decline, gambling online is not. Malta continues to benefit as a result.
Aj Thompson, the Chief Operating Officer of Malta-based gaming company Tain Operations, told Malta Today, those working within the sector spend €30 million in a given year, when taking into account the spending of the industry's highly-paid staff.
"According to studies we conducted, the added value left by employees in this sector is generally the same as the amount gained by the exchequer in taxes from the same industry," he explained. "So if €15.6 million were gained in taxes, what the country has earned is effectively double that."
Thompson, like a number of his colleagues, were lured to Malta from the island of Curacao, once a leading online gambling jurisdiction. The industry there has since thinned out post-UIGEA (Unlawful Internet Gaming Enforcement Act) since Curacao had catered mostly to US gamblers.
Curacao at any given time was once home to around a dozen online gambling companies employing a few hundred people. They were among the highest paid workers on the island. But even before UIGEA was passed, Curacao witnessed decline mostly a result of greedy government officials and companies looking to charge ridiculous fees for support services such as Internet connectivity, electricity and rent.
Curacao's loss is Malta's gain.
Tain employs 46 people with an average age of 26. "A lot of them are single, rent out apartments on their own at higher budgets than usual, spend money on entertainment, clothes and other goods," he said.
But Malta needs to learn a lesson from Curacao.
"When we got here, the average wage in other sectors was of €800 to €950, and we were paying €1,400 to €1,650," Thompson said. "This meant that people had money to spend, which implies a risk because this industry moves from one place to another, and it can. If its benefits are taken off, a company will consider other destinations where the conditions are better. In Malta the VAT benefit for these companies was already taken away and this has hurt a number of players, because it's 18% we're talking about.
"This industry is fragile," he added. "And there are only a few places from where it can operate, namely Albany, Gibraltar, Isle of Man, Costa Rica, Curacao, Antigua and Australia."
Over 300 online gambling sites are licensed out of Malta.
Jagajeet Chiba, Gambling911.com
