Betsson Group, Evolution Gaming, LeoVegas and 888 Holdings are all household names when it comes to the iGaming industry, but they also have something else in common. They all have headquarters, or at least some form of head office, in the archipelago country of Malta.
It’s no secret that gambling has contributed significantly to Malta over the past few years, especially financially. With all of the multiplier effects taken into account, it’s believed that the industry accounts for around 15% of Malta’s GPD all-in-all.
But what are multiplier effects, and why are they so important?
Well, they’re classed as the additional, often overlooked, contributions from a particular industry. For example, the consumption of goods and entertainment by employees of a particular sector.
Everyone needs somewhere to live and something to eat, so it’s only natural to consider the wider human impact of the gaming industry beyond the strictly numerical figures published in every quarterly report. With more people being paid by the iGaming sector, more people are spending money in local Maltese businesses.
While this is a clear positive, it’s not an easy feat to accommodate for a booming industry, as more employees mean more housing needs and infrastructure. Not only that, but most people will require a relatively easy way to commute to work each day, meaning they’ll either have to live in close proximity to their workplace or be able to access reliable public transport.
According to the reports published by the Maltese Housing Authority (MHA), 85% of all residential listings across Malta were apartment-style apartments, with only 15% being houses.
Of course, it doesn’t take any kind of genius to surmise exactly what this means. Apartment-style buildings can house significantly more people when compared to houses, especially considering the number of people travelling to Malta in the past decade.
In fact, more people than ever are flocking to Malta. The MHA found that 96,970 foreign workers were registered in 2022, a 43% increase from pre-Covid figures.
There’s no way to tell exactly how many of these were specifically for the gambling industry, but out of all the rental contracts signed in 2022, 44% of these were in the Northern Harbour, in particular Sliema, Msisa, Gzira and St. Julians - all neighbourhoods well known for housing international (and local) iGaming workers.
With all of these new residents, the previously quiet fishing villages are finding more supply and demand in the hospitality sector, with restaurants and hotel firms also taking on more foreign workers. In fact, according to local statistics, the foreign population in Malta is now approaching 17%.
Despite Malta having a fairly non-existent rental market up until 2010, this is one of the most significant ways in which the country has had to adapt to labour movements.
More young professional people are settling in Malta than ever, with a disproportionate amount choosing the Northern Harbour, which is also putting a strain on the local housing market. Between both rising property prices and the mortgage market transforming in real-time, this is causing a notable strain on first-time buyers in Malta.
This is something that has become such a national concern that Matthew Zerafa, Housing Authority CEO, is conducting a detailed report on the trends of first-time buyers that will be published later this year. However, the small island is facing a particularly unique problem - with many finding it difficult to buy their first home among rising rental trends, almost 82,000 dwellings across Malta are not occupied all year long.
Despite rising costs across the country, 27.5% of houses are described as secondary or seasonal houses, or outright vacant. These are classed as dwellings that aren’t occupied permanently, such as summer homes or places with a Monday-Friday rental agreement for workers.
While this is a complex issue, there are a few trends within it that are worth exploring.
For example, the areas with the most occupied houses are St Paul’s Bay, Sliema and Msida - all places with strong industrial associations. On the other hand, 45% of dwellings in Gozo and Comino were classed as secondary, seasonally used or vacant. In fact, while St. Paul’s Bay accounted for 7,300 rental contracts in 2022, both Santa Lucija and Mdina received less than 20 each.
This suggests that there is a growing urbanisation movement within Malta, perhaps driven by the growing industries within the country. In the same breath, there is a growing trend reported by the Housing Authority on illegal and unethical tenancies in Malta.
“Everyone needs somewhere to live and something to eat, so it’s only natural to consider the wider human impact of the gaming industry beyond the strictly numerical figures published in every quarterly report. With more people being paid by the iGaming sector, more people are spending money in local Maltese businesses”
The country has strict regulations when it comes to shared space contracts; according to the Private Residential Leases Act a shared space contract can only last for six months and cannot be renewed. Considering the disparity between long-term leases at 95% and shared space contracts at 4.5%, this has led the Housing Authority to believe that many landlords are falsely registering their properties and long-term leases.
There have been several reports by the Authority in recent months of over 40 foreign workers being discovered living in one apartment.
Of course, Malta isn’t unique in dealing with these problems. We can’t name one country in the world that isn’t dealing with housing issues to some degree, the particular ecosystem of Malta makes it liable to be examined under a microscope.
As a relatively small island that is dealing with large amounts of labour movement and transforming industries, it’s only natural to see some level of friction within the infrastructure of the country.
It isn’t just the housing landscape that has been affected by the gambling industry, though. According to figures from the National Statistics Office (NSO), material deprivation in Malta has fallen by 50% over the past decade, with some 75,000 people in Malta classed as such. In turn, the average gross income from households has also increased by 52%, with the figure now at €43,186 ($45,642).
However, while more people in Malta are able to afford basic goods when compared to a decade ago, the difference between high and low earners is only growing.
How does the iGaming industry relate to this?
Well, as some of the largest names in the casino business are headquartered in Malta, these companies can afford to pay competitive wages to those in the local offices. The nature of the work also means that it’s fairly effortless to offer the products on an international level, with more online casinos and sports betting companies going global each year.
While this has led to a general increase in median income, especially in the wider scope of labour growth in Malta, it has led to competition against local firms. Many Maltese firms are classed as small and medium-sized enterprises (SMEs) by international standards due to a lack of economies of scale.
This has caused a lot of smaller, Maltese-focused businesses to lose confidence in the potential to attract talent to their companies. Without the global scope, many cannot compete with the wages offered in the gaming industry.
So what can we learn from this?
The country of Malta is having to deal with a few different contradicting problems at the moment. While there is a decline in housing affordability for first-time buyers and rising rental costs, there’s also an increase in homes that aren’t occupied all year long.
On one hand, the wages offered by many gambling-related businesses are comparatively high when compared to other businesses in Malta, but on the other, this creates a rift between the international casinos and local firms.
Finally, while there are seemingly endless opportunities for international workers in the iGaming industry, is there a fair and equal balance when it comes to Maltese workers?
It goes without saying that the growing gambling industry has benefitted Malta with an almost indisputable net positive impact on the country. It would be disingenuous in all regards to even propose the opposite, but that hasn’t stopped the industry from both directly and indirectly altering the Maltese landscape.
In fact, the local Government is already tackling some of the most pressing issues; with the House Authority pushing for more affordable housing schemes and even partnering with Geographic Information Systems (GIS) to help visualise and identify housing trends. With the gambling sector stabilising after the initial boom in growth, this could lead to a stronger ecosystem all around.
Despite having to deal with an overwhelming number of changes over the last decade in regards to labour movements and iGaming industries, it seems like the country has managed to cope pretty well with the transformation.
