Leisure, property industries rely on big-spenders in the field
Over the past months, the number of iGaming companies registered in Malta reached 330 – employing around 2,500 – of which those specialised “command a more attractive package” according to the Lotteries and Gaming Authority.
Market leaders estimate the added value left by this new population of employees (many of whom foreign) to be “very substantial”. In fact, Federation of Estate Agents President Ian Casolani said that “scarily enough, the rental market very much depends on iGaming employees nowadays,” with budgets that range from a minimum of €350 to €6,000 per month.
The norm, says Casolani, ranges between €600 and €1,000 monthly.
“Up to a few years ago there was not enough supply of properties for what this new market tends to go for,” he said. “But now there is. iGaming employees generally prefer smaller, well-finished properties in contemporary style. Location is also very important – and the areas around Sliema, St Julian’s and Gzira tend to be the ones they look for most.”
On his part, GRTU President for Tourism, Hospitality and Leisure Philip Fenech said that what iGaming employees leave into our fiscal system “is very, very substantial”.
“Much of the money earned by staff in this sector goes through our system,” he said. “This is seen in what they leave in bars, hotels, supermarkets and other retail establishments. Then we also have to see those who run the companies. Many of the executives come to Malta with their families. Some have grown to like Malta so much that they’re investing in property here. There are also friends who come and see them through their encouragement.”
Fenech, who also serves as a director on the main board of the Malta Tourism Authority, classifies this new generation of expatriates as “tourist-residents”, because “although some of them have been here for a number of years, you also get turnover. There is also the factor of the number of locally-engaged people.
“It is a known fact that these people are in the higher bracket of earners, and their expenditure is high in our economy. Although the crisis has hit many sectors, gaming was minimally hit. Many of those involved in this industry tell me that they have not been hit at all. Some have remained the same and others even improved. I look at this type of business as one working on a very low profile and I think it is, for many reasons, grossly underestimated in our economy. The reports that I have are that these temporary foreigners are considered to be tourists on a long holiday, when one considers the way they spend in leisure. My reports come from gyms, restaurants, fashion outlets, supermarkets, clubs and other forms of leisure. They live it up here. They produce wealth and they enjoy wealth.”
Even according to an LGA spokesperson, the financial crisis did not seem to have had any bearing on the gaming industry.
“Notwithstanding the global economic situation, indications are that more companies are aiming to establish themselves and obtain a Maltese remote gaming license,” she said. “Such indications are not only derived by the high number of enquiries on what is needed to qualify for a Maltese remote gaming license, but also on the high number of applications received in the past three months. Notwithstanding, the rigorous licensing process adopted by the LGA does not automatically equate that all the applicants will be granted a license. Each company needs to religiously comply to all the necessary regulatory conditions to ensure that only companies reaching a high standard of compliance with the laws and regulations are awarded with a license.”
There are mixed feelings on whether government is doing enough to provide the necessary environment for this industry to flourish further in Malta. Undoubtedly, the island has a reputation for being progressive in the regulatory field, albeit questions still linger on whether government appreciates the added value left by this industry into our economy.
“Along the years, Malta invested heavily in its infrastructure and services,” the LGA said. “Such investments – be it from Government or the private sector allows Malta to attract companies to set up in Malta with confidence. Such examples are the multi-international internet cables available and the supply of accommodation for rent or purchase. Coupled with these, Malta enjoys from a diversified array of service providers in the legal and financial services industries that are offering their services to the industry.”
The Federation of Estate Agents has another version of facts, saying that while Maltese banks have created incentives to allow for more supply of rental properties for this market, “government absolutely has not”.
“We want the system to change because it’s totally antiquated,” Casolani said. “It dates back to the 1980s. Licenses for this sector are still regulated by the MTA, but there’s a difference between a property for long-let and a self-catering apartment. These cannot be compared.”
For long lets to foreigners, a holiday apartment license is required.
“We don’t have a problem with the self catering one,” he said. “But you cannot impose certain things for long let apartments, because the lessor and the lessee agree on the conditions and prices by means of a private agreement. The MTA cannot insist on certain standards if the lessee accepts certain conditions.”
Besides, after having registered their properties with the MTA, lessees are required to indicate personal details of lessees to the same authority, which also imposes a license fee equivalent to one month’s rent.
“Over and above, rentals to foreign tenants are subject to 5 per cent VAT, not to mention income tax derived from rentals,” Casolani added.
“We have been arguing to scrap this system and make it easier for people to rent,” he said, since the system encourages many lessors not to register their properties at all. “We’ve been trying to encourage government to make a system with a final withholding tax, of say 15 per cent and that’s it. This would certainly encourage people to come in line.”