Malta’s dominance in the gaming sector is a result of its extensive experience, acquired over years of pioneering developments. The Mediterranean island is an established leading gaming hub in Europe, driven by innovation and a regulatory framework that is sound and progressive.
Malta’s unwavering dedication to innovation and investment in the gaming industry exemplifies its proactive approach to staying ahead of the curve of this dynamic and rapidly evolving sector.
Innovation in blockchain technology
With investors putting faith in the tune of USD 27 billion (€27.3 billion) for the future of Web3, Malta is witnessing a significant transformation in its gaming secor.
The gaming industry is paving the way for the development of Web3-based games, offering players decentralized finance solutions that sidestep traditional banking institutions. This shift towards decentralized gaming experiences is not only innovative but it is also designed to be more user-friendly.
Experts in the field have suggested that blockchain-based messaging service Web3 is poised to replace the conventional Web2 infrastructure, including email systems. Web3 gaming, in particular, is emerging as one of the most significant developments in the gambling industry over the past two decades, aligning with the evolving concept of the metaverse to engage newer generations of gamers.
Increased use of cryptocurrency
An evident shift is the increased use of cryptocurrency in the gaming sector, marketed as the safest mode of payment. With the gaming sector valued at over €300 billion, it is expected to experience exponential growth over the next few years.
The adoption of payments by digitial currency also offers distinct advantages, enabling swift payments and remittances without the involvement of third-party intermediaries. Some gaming operators are introducing a “play and pay-as-you-go” option for crypto users, eliminating the need for substantial upfront deposits.
The rise of digital currency has prompted gaming operators to introduce more sophisticated functions to enhance the gaming experience. Recent developments by a number of operators for example allows players to convert ‘in-game’ crypto balances into their preferred currencies. Additionally, the use of crypto payments significantly reduces the risk of fraud, as chargebacks are not feasible in this system.
Education plays a pivotal role in this transformative process. The lack of understanding of the payments market presents a substantial challenge for the iGaming sector. Regulatory frameworks are often ill-equipped to handle digital payments, posing limitations for both regulators and operators. To address these issues, authorities in Malta have addressed the issue and have stayed abreast of rapidly evolving technologies to regulate the industry more efficiently.
Data protection
Malta boasts a robust framework designed to address the evolving challenges posed by cybersecurity and data protection to the gaming sector, in both online and landbased scenarios.
The potential for cybersecurity incidents and breaches of personal data has become increasingly intricate. Cyber threats and hacking can manifest in ways that are both elusive and difficult to manage. The complexity of the metaverse adds an extra layer of challenge to the protection of data and defense against cyberattacks. Identifying the entities accountable for fulfilling legal obligation requires notifying affected data to relevant authorities. As such, Malta’s comprehensive cybersecurity infrastructure plays a pivotal role in safeguarding the integrity of the metaverse and ensuring the protection of user data in this ever-evolving digital enviroment.
Anti-money laundering
Anti-Money Laundering (AML) remains a significant concern for regulators, especially with the widespread adoption of digital payments in the gaming sector. Mitigating risks such as wallet verification and the imposition of low limits presents barriers for both gaming companies and players alike.
In 2018, the Malta Gaming Authority (MGA) took proactive steps to cultivate an accommodating environment for cryptocurrency adoption by introducing a forward-thinking ‘sandbox framework.’ This comprehensive framework delineates stringent criteria that operators must adhere to when considering cryptocurrencies as a viable payment method. These criteria encompass regulations concerning wallet validation, verification procedures, and deposit limits.
MiCA in 2024
Malta’s forward-thinking stance regarding blockchain technology and cryptocurrency payments is a significant magnet for attracting a growing number of gaming operators and players alike. Furthermore, the impending arrival of the Markets in Crypto-Assets (MiCA) law in 2024 is anticipated to introduce a comprehensive regulatory framework for digital assets. This framework will not only address regulatory concerns but also provide practical solutions for both regulatory bodies and gamers looking to engage in cryptocurrency deposits, ensuring a secure and transparent environment.
Malta stands as a pinnacle within the global gaming industry. Its reputation goes beyond mere advancement; it is marked by the distinction of being one of the most esteemed gaming jurisdictions worldwide. Evidenced by the highest number of licensed operators, Malta reaffirms its dominance in the gaming industry, underscoring its authority and prowess in this sector.
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