Malta is changing its tax framework in October

[Valge]

The VAT exemption most online operators have been relying on since 2018 is getting narrowed significantly. Online casino, live casino, sports betting, and poker all move from exempt to taxable. The GGR rates are going up too, online casino to 15% and sportsbooks to 10%, both up from the previous flat 5%.

The interesting thing is that moving from exempt to taxable actually lets operators reclaim VAT on their costs. This could be: software, marketing, B2B services. For some operators, that recovery offsets a decent chunk of the new burden, so the net impact isn't as straightforward as it looks.

The bigger structural shift is that online sports betting is being reclassified as an electronically supplied service, meaning VAT now follows where the player is, not where the operator is registered. The old model of being based in Malta and applying Maltese rules to players everywhere is effectively ending.

Whether this makes Malta less attractive really depends on your player geography and cost structure.

[Mark Donowan]

The headline numbers look scary, but the real impact will vary a lot between operators. A brand with mostly EU players, high marketing spend and a lot of B2B costs might actually absorb some of the VAT through input recovery.
The bigger question for me is not the tax rate itself, but how much complexity this adds. Having to track VAT based on player location, especially for operators with multiple markets, creates a much bigger compliance headache. Malta is still attractive for many reasons, but the simplicity advantage it had before is definitely being reduced. Will see, how things will go..

[Valge]

Good points here. VAT by player location means 27 different rates across the EU if you're serving multiple markets, which pushes smaller operators toward either geo-restricting or outsourcing compliance entirely.

[Mark Donowan]

One thing I’m curious about is how this will affect the relationship between operators and B2B providers. A lot of platforms, game suppliers and service companies are based around the Malta ecosystem, so any increase in compliance costs could eventually be passed down the chain. For larger operators this is probably just another tax calculation to automate, but for smaller ones it might influence where they decide to license and operate from in the first place.