In conversation with Dr. Franklin Cachia, Gaming Lawyer, Dr. Malcolm Falzon, Partner at Camilleri Preziosi highlighted the strategic considerations for gaming companies contemplating going public through an initial public offering (IPO).
This episode of the Decoding Gaming Law podcast emphasised the benefits of listing your company through an IPO, such as access to capital for growth, research and talent acquisition as well as the reputational prestige it brings.
The advantages of IPO
One of the most compelling reasons for a gaming operator to list is access to funding. “The key point is access to funds,” Dr. Falzon explained. “Access to funds which in turn enable that particular operator to really diversify its strategy, to grow, research and development, and bring in the kind of talent it perhaps wasn’t previously able to attract.”
Listing, whether through debt or equity, is also a badge of honour in the industry. “You’re adding value to the brand… a level of prestige,” he added. Moreover, an IPO can provide an exit strategy for founders. “There is the added benefit of providing an exit opportunity for incumbent shareholders… who see this as an opportunity to sell out a proportion or all of their shareholding,” he said.
The disadvantages of IPO
One of the biggest hurdles is loss of control. “There may be a genuine sense of fear… not wanting to lose control,” said Dr. Falzon, especially for businesses started by close-knit founders or families. With equity listings in Malta, for example, “at least 25% of the share capital holding voting rights in the company needs to be held in public hands.”
Even debt listings impose requirements. “The board can no longer be composed only of the people who founded the business… they would need to involve independent non-executive directors,” he noted. Then there’s the regulatory exposure. “You’re stripped, there are public disclosures,” he pointed out. Companies must release company announcements and keep the market informed, even on sensitive or strategic developments.
Cultural and operational shift
When discussing the process of listing a company through an IPO, Dr. Falzon says, “The first step is a cultural mindshift. The maturity to say, ‘I’m prepared to bring strangers to the decision-making table with me.’”
Preparation is intensive. “You need a three-year historical track record,” and companies must ensure IFRS compliant reporting, robust corporate governance and experienced advisors. Timelines vary from four months to over a year depending on the issuer’s readiness and market mood.
Malta and beyond
While Malta offers a domestic exchange, many gaming firms opt for larger international markets like NASDAQ. “One operator chose NASDAQ New York because the investor base preferred companies based elsewhere,” said Dr. Falzon. He added that NASDAQ First North is particularly attractive to Scandinavian investors familiar with gaming.
Dr. Falzon concluded with a critical reminder, “Get the right advice, and really acknowledge whether this is right for you.” Listing a company through an IPO opens doors but only for those ready to walk through them with an open mind.
Join leading industry professionals at the upcoming SiGMA EuroMed summit in Malta to explore the future of gaming finance and capital market strategy. Don’t miss your opportunity to learn, network and prepare your business for the leap into the capital markets.
