Malta Firms Face Financing Struggles

May 26, 2022
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Malta’s tarnished financial reputation is making life difficult for operators seeking funding, but at least one major player says it remains committed to the island.

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Malta’s tarnished financial reputation is making life difficult for operators seeking funding, but at least one major player says it remains committed to the island.

Young gambling companies looking for funding are finding ties to Malta a hindrance.

“For a company in our stage, we’ve been going through a capital raise process and we have a lot of investors looking at our business from the United States, and as soon as we mention Malta it’s a turn off for 90 percent of our investors,” said David Flynn, the Group CEO of Glitnor Group, speaking at Tuesday's (May 24) KPMG eSummit in Malta.

Malta’s already somewhat chequered reputation took a nosedive when it became the first EU country to be added to the Financial Action Task Force's greylist in June 2021.

“It causes a big headache around the board room. These are things Malta really can’t have if it’s going to succeed with the gambling industry, or indeed any industry,” said Flynn.

Officials have said work is well under way to move the island nation off the watchdog’s list of sub-par states and there are rumours it could be removed from the blacklist as soon as next month, but dealing with the reputational fallout may be a longer road.

It will be at least 18 months post-removal until external investors have a warmer view of Malta, Flynn said.

“Once this goes away, hopefully the recovery can be relatively fast, because for some it’s a no go because of the greylisting,” agreed Jesper Svensson, CEO of Betsson Operations, the Swedish-listed operator’s Maltese base.

The executive admitted even his much larger firm faces the same tough questions from investors as Glitnor.

Flutter Malta CFO Cormac O’Brien agreed that Malta was suffering from deep reputational damage. He also admitted Flutter had moved most of its banking to New York and Dublin, and called for reforms to what he saw as various old-fashioned practices on the island.

“Unless there are changes made with the banking system I fear that a lot of the gaming industry will continue to look outside Malta for its banking,” he said.

O’Brien cited a lack of digitisation and detailed recordkeeping as impediments.

Still, he said, the company now has more than 1,000 staff in its Malta office and is looking to recruit more.

“Malta is still a key strategic location for us,” O’Brien said, noting it still had value from a regulatory standpoint.

Svensson said Betsson is also continuing to recruit on the island, but faces a struggle to find enough qualified staff.

“I’m not sure if there is enough people to cater for the demand that this industry has,” he said, particularly when it comes to skilled technology employees.

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