Malta: Helping Malta Achieve Its Full Tech Potential

Last Updated: 20 September 2019
Article by Matthew Scerri and Mark O'Sullivan
Most Read Contributor in Malta, September 2019

From the leading iGaming hub in Europe to 'The Blockchain Island', it seems as if there's no limit to how far Malta can go in the digital sphere.

Matthew Scerri, Senior Manager, KPMG Software, and Mark O'Sullivan, Advisor, Gaming, were interviewed on the Blockchain Island Magazine to outline how Malta has achieved this level of success in these fields, its way forward, and how KPMG can be instrumental in making it happen.

Malta has been making a name for itself as a reputable digital hub ever since the early 2000s, when the first laws governing the iGaming industry were passed. Successive administrations have carried on placing importance on nurturing and creating a fertile space in Malta for new digital sectors, most notably, in recent years, with the introduction of DLT regulation, which serves to lay down the law in the unchartered blockchain sphere - earning it its now famous title. Matthew Scerri and Mark O'Sullivan mapped out what's next for Malta's ever-growing digital sector, and KPMG Malta's role in its continuous expansion.

The Blockchain Island - How Malta's Regulation Made it Stand out from the Crowd

While regulation was initially seen to be standing in direct opposition to what blockchain hoped to achieve, Mr Scerri says that people who adopted this view were missing the bigger picture. "The major hurdle blockchain and cryptocurrencies have to overcome is specifically mass adoption, as they would otherwise remain firmly confined within the domain of the tech-savvy. Things get even more critical when smart contracts are considered, particularly considering that these can have autonomous control and can take critical decisions, often being financial in nature. A question often posed by people who do not deal directly with code is 'how can we trust code to take the right critical decisions?"'

Mr Scerri says that regulation can give the stakeholders within an economy the necessary confidence to adapt such technologies to their day-to-day business and adopt them fully for their needs, which is what will ultimately bring this technology to the mainstream. "This is exactly where Malta's regulatory framework stands out, as more than just regulating the financial element, it also regulates the technological aspect through the Malta Digital Innovation Authority (MDIA). Regulation gives added certainty and, above all, a set of rules which define a professional approach to a nascent industry."

While the fact that Malta has taken such bold first steps makes it a pioneer, it inherently brings about risks of being the first to face certain challenges. "After setting the platform and attracting a lot of interest, Malta must now consolidate its position by delivering what it promised, and things are very much going on the right track," remarks Mr O'Sullivan. "Additionally, it is important to keep on building the knowledge in the industry and involving all stakeholders in decisions, as has already been done, as this is a fast and constantly changing space. Given this is a first of its kind, we also need to accept, and embrace, that the legislative infrastructure will need to be tweaked as the industry grows and opportunities emerge."

The Esports Revolution - Is it the Next Big Thing?

Esports is often considered to be one of the next frontiers in the digital economy sector, even though Mr Scerri says the very meaning of the term is debatable. "Personally, I see it as competitive peer-to-peer digital gaming. This is based on a comparison to its counterpart, traditional sports. However, for the purpose of this article, I will keep in line with the popular understanding of Esports, namely professional digital gaming."

He says that Malta's recent economic growth has primarily been driven by its digital companies, adding that significant investment in the Esports industry seems to be a natural extension to its already bustling digital games industry and iGaming ecosystem. "The Esports and digital games industries are expected to surpass $150 billion (€134.5 billion) in industry revenues in 2019. Malta has managed to establish itself as a hub for large digital events in Europe, attracting thousands of business leaders from across the globe to each of the events on this little island. The Malta Government can certainly replicate this model with Esports enthusiasts and business minds to propel the country forward in the Esports industry."

Indeed, Mr O'Sullivan expands on the fact that a number of well-known digital gaming companies already have headquarters in Malta, including 4A Games, the company behind the popular apocalypse series, Metro, as well as Exient, which developed some titles in the Angry Birds and Lemmings series. "Additionally, bringing things back to Esports events, there are some highly respected indigenous companies who have organised some high-calibre events for a number of years to date. First up there is GMR Entertainment (or gamers.com.mt), who run the yearly Malta Esports Festival, attracting over 350 players, 1,000 spectators at the event and over 1.5 million views through online channels during 2018's festival. Next up, there is Quickfire, whose most notable event was the Supernova CS:GO Malta held in 2018. This event offered the largest prize pool ever seen in Malta, €150,000. The prize was scooped up by the number one ranked Esports team in the world, Team Liquid. Then there is also interest among operators within the iGaming sphere, who provide a platform for punters to place bets on their favourite Esports teams in similar fashion to a regular sportsbook outfit. Pinnacle and Betway are often considered to be two of the market leaders on this front."

To strengthen its appeal to prospective Esports companies, Mr O'Sullivan says Malta has made significant strides forward. "Malta Enterprise offers excellent funding options, whilst GamingMalta is constantly driving the conversation forward alongside its Government counterparts, particularly with the forward-thinking Parliamentary Secretary Silvio Schembri. Just recently, GamingMalta led an Esports delegation to South Korea to further Malta's understanding of the Esports and video games industries globally. Whilst Malta's Esports industry is somewhat in its infancy when you look at that of many Asian countries, it is fair to say that Malta has a lot to offer this growing industry. 300 days of sunshine, an attractive tax structure, an English-speaking workforce and strong local-based tech talent are just some of them."

Mr Scerri adds that given the relative infancy of the Esports industry compared to traditional industries, there is currently little room in Malta for industry competition at this point. "It is important that Malta's locally-based Esports companies form strategic alliances for the ultimate good of the industry in Malta as a whole. For Esports companies looking to base their operations in Malta, it is equally important that similar partnerships are made and that they immerse themselves in the tight-knit Esports industry on the island. Additionally, it is crucial that the correct advice is sought from knowledgeable professionals. Malta has a lot to offer foreign companies and it offers incentives to attract companies to the island. Without the correct structuring and advice, it is possible that companies will miss out on good opportunities."

"Through its global network and locally-based experts, KPMG can provide a 360-degree service for Esports companies. From start-up phase to eventual global expansion, KPMG can provide expert insight and advise every step along the way. Globally, KPMG has been involved in both the video games and Esports industries for a number of years, and has built a strong knowledge base and excellent connections."

Problem-solving Through Education and Tech

Among Malta's greatest challenges when it comes to fulfilling its potential as a fully-fledged tech island are a lack of human resources and a need to invest further in education and R&D. However, it's clear that the relationship between the two is symbiotic, and tackling the latter could positively affect the former.

"You can never have enough investment in R&D and education as that is the starting point for new technologies, so they very much go hand in hand," explains Mr Scerri. "There are various emerging technologies that are disrupting various industries and solving interesting problems – from Robotic Process Automation (RPA) bots freeing up time dedicated to repetitive tasks, to the Internet of Things, a world where it is not just people that are connected to one another, but devices too."

"Technology is often touted as something that will replace jobs, but in reality, we are facing talent shortage across the board. I would argue that this is not necessarily a problem that is limited to Malta, but Malta experiences its effects a bit sooner and in a more obvious manner due to its limited size," adds Mr O'Sullivan. "I firmly believe that technology is actually the most efficient way of solving this."

Mr O'Sullivan and Mr Scerri concur that these are not changes that will happen overnight, so education needs to start from a young age, and have a broad scope. "It is encouraging to see the new Centre for DLT being launched at the University of Malta to help bring the different roles within the space under one academic roof, for example. However, it must also be tailored to cater for people with different backgrounds and possibly from different generations – a one-size-fits-all solution rarely works in tech," Mr Scerri said. "The perspective of a software developer and a lawyer has often been different, yet technology is seeing these two roles come closer than ever before."

Mr O'Sullivan continues that education must be used to eliminate the fear and doubts of the unknown by providing the necessary information for people to be able to at least ask the right questions. "Once that happens, the technology starts to get demystified and adoption will quickly follow."

Recognising and Harnessing Emerging Technologies

KPMG in Malta has long recognised the importance of emerging technologies, and is involved in a number of initiatives in this regard. Investments range from the aspect of educating different businesses, roles, stakeholders and the public through the KPMG Learning Academy, up to developing bespoke solutions through KPMG software, providing advisory services through its dedicated IT Advisory team, and finally providing ERP solutions through KPMG Crimsonwing.

"When looking at traditional service offerings which are relevant to this space such as audit, regulatory and tax offerings, clients expect you to have in-depth knowledge of the technology to be able to help them identify opportunities and cater for specific needs," says Mr Scerri. "This is where the investment in specialised technologists comes into play, as it allows for a cross-functional team from different backgrounds to contribute to the delivery of these services."

KPMG is also using such emerging technologies to improve efficiencies in-house, which ultimately allows the firm to be able to offer a better experience to its clients. "We practice what we preach," Mr Scerri grins.

With several businesses relocating to Malta to take advantage of the regulatory framework, some of which have a presence in multiple jurisdictions, KPMG Malta's membership within a wider international network allows the company to reach out to people who have expertise in a number of different areas and their own specific jurisdiction, which will ultimately allow it to provide services of the highest quality. "In addition, due to Malta's unique service offering, it also allows us to reach out to the same network to be able to attract business to Malta, by showcasing what the island is offering and how it sets itself apart from other jurisdictions," Mr O'Sullivan concludes.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions