Malta's Labour Party seeks to set precedent in prediction market regulation
During a press conference in the run-up to the general election on 30 May, Malta’s Labour Party (PL), currently in government, focused on the country’s economic direction. Notable topics discussed included the push for digitalisation and greater use of artificial intelligence among Maltese businesses, as well as the aim to set a precedent for prediction market regulation in Europe.
The conference was presented by Deputy Prime Minister Ian Borg and Economy Minister Silvio Schembri, along with economist and PL candidate Clint Azzopardi Flores.
Malta eyeing prediction market regulation
Schembri has discussed how the government is closely monitoring the growth of prediction markets as a sector, and he mentioned this again as he spoke during the conference.
He indirectly referenced how the Maltese elections have begun being featured on prediction markets, such as on Polymarket, where event contracts are presently available relating to who will be the Prime Minister of Malta after the election on 30 May, as well as which party will accumulate the third most votes.
The Economy Minister said that this is a sector which Malta can approach with its extensive experience in dealing with iGaming. He described prediction markets as “an emergent sector which exploded over the last two years, particularly within America”.
He commented that there is, as of yet, no country at the European level looking to offer a strong regulatory framework in relation to prediction markets. With that in mind, he said that Malta has the expertise to explore how one can view this sector, “Whether it be from the gaming sector, financial products, or a hybrid between the two.”
Schembri expressed that he believes if Malta enacts regulations on prediction markets, then other countries would follow suit. He referred to when Malta regulated crypto markets as an example of this, as he said that the EU’s subsequently enacted Markets in Crypto-Assets Regulation (MiCA) is based on Malta’s laws.
He said that Malta needs to take care with regard to emerging sectors, and cited the growth of sectors such as esports, fintech, crypto, and medtech within the Maltese economy.
Prime Minister Robert Abela has previously indicated that giving the Malta Gaming Authority (MGA) the capability to grant licences to companies operating in the prediction market space is among the PL’s plans.
Gibraltar and Curacao, much like Malta, have established themselves as mainstays within the wider iGaming industry, and have also positioned themselves as jurisdictions which could potentially introduce regulations and frameworks for prediction markets.
Which jurisdiction will make the first, concrete step is yet to be seen, but it would surely represent a significant development across iGaming and trading markets.
Digitalisation, AI, and the Maltese economy
A number of matters related to the economy were discussed, including the importance of economic stability in the face of global hardship, as well as attracting investment to the country.
Notably, Borg cited the International Monetary Fund, which he said had stated that Malta is expected to experience the most economic growth in the European zone.
He said that the government is aiming for the Maltese economy to grow by 4 per cent year-on-year and added that two-thirds of that economic growth is to be generated by digital and service sectors, as well as value-added manufacturing.
Borg said that Malta stands among the most advanced countries within the European innovation scoreboard, as he remarked that Malta is among the European countries with the highest percentage of businesses utilising artificial intelligence in their operations.
He stated that the number is between 17 and 20 per cent of Malta-based businesses which use AI. He added that the government is aiming for that number to go up to 40 per cent within the next five years.
Relevant to that point, Borg referred to the recent announcement of an agreement between the Maltese government, OpenAI, and Microsoft, which gives all citizens and residents of Malta and Gozo aged 14 and over access to a free one-year subscription to either ChatGPT Plus or Microsoft 365 Personal Copilot upon the completion of an official two-hour course.
Malta e-Residency
For his part, Azzopardi Flores spoke about an initiative which has also previously been discussed by the PL, namely that of Malta e-Residency.
He said that this initiative would allow foreign entrepreneurs to digitally establish and manage a Europe-based business with Malta as the regulatory base.
This could prove to be particularly relevant for the iGaming industry, given Malta’s longstanding status as an iGaming hub within Europe. Azzopardi Flores said that this programme will attract more start-ups to the country while also creating more demand for professional services provided by businesses established in Malta.
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