Malta is opposing a proposed European Union tax on online gambling supported by former England goalkeeper Peter Shilton to help fund the bloc's budget.
The European Union is seeking new revenue sources for its next seven-year budget, which totals 2 trillion euros. A proposed tax on online betting promises to generate more than 13 billion euros, but it has already created a new rift among member states.
According to Politico, former English footballer Peter Shilton has become the public face of the European Parliament's campaign for the betting tax. Shilton, who conceded the Hand of God goal to Diego Armando Maradona in 1986, is now an anti-gambling activist after overcoming an addiction that lasted for decades. Despite being a strong Brexit supporter, he is backing the EU Parliament initiative.
Shilton lost more than 1 million pounds at the racetrack over 45 years and now runs his own charity fighting gambling addiction. He dismissed opposition from Malta and industry lobbyists as a smoke screen, arguing that higher taxes are necessary to curb advertising revenues that lure young players. Speaking to Politico during a visit to Brussels in June, Shilton said that deep down, industry groups were simply after everyone's money.
Supporters of the betting tax argue it would raise over 13 billion euros across the next budget cycle while tackling a major public health issue. Experts estimate that roughly 80 million adults worldwide have experienced gambling addiction. Shilton said gambling was viewed as a disease that was innate to humans and could be triggered.
Malta's Economic Stakes and Opposition
Malta is leading the opposition to the proposal. The small Mediterranean nation has a population of just over half a million people and hosts a large betting sector. Maltese officials argue that higher taxes would paralyze its gaming industry, strengthen illegal operators, and push companies out of the EU.
Maltese Prime Minister Robert Abela told the Maltese Parliament in June that Malta would not accept the introduction of any EU-level taxes intended to support Union spending.
The gaming sector, including lotteries, betting, and online casinos, accounts for about 12% of Malta's gross domestic product. Companies relocated their headquarters to Malta due to its relaxed licensing system, business-friendly tax regime, and favorable climate. An EU diplomat, speaking on condition of anonymity, said Malta depended on the online gaming industry as much as Germany depended on cars.
While gaming companies need local licenses to operate in most European countries, obtaining a Maltese license is essential for accessing banking services and establishing a footprint in the EU market. Malta-based companies previously dominated online gaming markets in Germany and Austria until national regulators took strict action. In response, the Maltese government refused to recognize certain court judgments and sanctions imposed by other EU countries against its gaming companies.
The gaming industry enjoys strong backing from Maltese politicians in Brussels. Last year, European Parliament President Roberta Metsola, who is Maltese, gave the opening address at an international gaming conference in Rome, which Italian Foreign Minister Antonio Tajani also attended. Metsola said she was proud that the event originated on her home island of Malta, referring to SiGMA, an online gaming event company founded by her university friend Eman Pulis.
Industry Arguments and Budget Negotiations
Industry lobbying groups contend that increasing gambling tax rates will drive consumers toward illegal markets that operate outside EU regulations. European Gaming and Betting Association Secretary-General Maarten Haijer said a higher tax would lead to worse odds for customers, noting that access to illegal European markets was only a click away.
Economist Nicola Matteucci of Università Politecnica delle Marche in Italy noted that while there is a point where prices exceed a level and demand drops, this does not happen as directly as the industry implies because consumers are not always rational. Conversely, Derek Webb, founder of the Campaign for Fairer Gambling advocacy group, said higher taxes would lead to less overall gambling advertising, which many people would consider a public benefit.
The tax issue has divided the 27 EU governments, setting Southern European nations against Western European countries like France, which view the measure more favorably. The European Commission has not yet submitted a formal proposal for the tax, which would require unanimous approval from all member state governments.
The dispute comes as Ireland, holding the rotating presidency of the Council of the European Union, prepares to resume negotiations to reach an overall agreement on the EU budget before the end of the year. Dublin faces the task of balancing competing spending priorities, ranging from farmer subsidies to foreign aid, into a single budget acceptable to all 27 member states.
Governments must unanimously approve new EU-level taxes, known as own resources, to fund rising defense spending and post-pandemic debt repayments without sharply increasing national contributions to Brussels.
Mediterranean Coalition and Financial Impact
Four diplomats familiar with the discussions said Malta has joined forces with Mediterranean allies Italy, Portugal, and Spain to oppose the levy. The tax was proposed by socialist Member of the European Parliament Victor Negrescu.
According to European Commission estimates seen by Politico, a 3% tax on the net turnover of the online gambling sector would generate approximately 1.9 billion euros per year. Spain would face the largest financial burden, paying an estimated 414 million euros annually, which represents nearly a quarter of the total collection. Malta would face an annual burden of 165 million euros, a disproportionately high sum for a country of its size.
Portugal is reluctant to support the tax due to concerns that higher tax rates could reduce revenue from state betting and lotteries. A Portuguese official noted these revenues fund healthcare and youth support programs operated by the Santa Casa da Misericórdia de Lisboa charity.
Italy presents a unique case due to its low online gaming prevalence. Rome is projected to pay just 7% of the proposed tax, a lower share than its regular contribution to the EU budget. However, Italian Prime Minister Giorgia Meloni's Brothers of Italy party has previously supported the gaming industry. Last year, party lawmakers voted for legislation lifting a ban on gambling advertisements by professional football clubs.
