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Thomas Flash from the iGaming Profiler, puts the spotlight on the online gaming hub of Malta and whether or not its future is hanging in the balance.
There are currently significant issues swirling around the global iGaming industry. With the European Commission debating whether and how to regulate remote gaming within the EU and Barney Frank rebelling against the UIGEA, we’re in extraordinarily uncertain times.
According to the report for the end of 2007 fiscal year from the Lotteries and Gaming Authority (LGA), the revenue generated from gaming was just under €35 million. Considering that this is an increase of €2.8 million from 2006, the prospect of a significant increase in last year’s numbers wouldn’t be unreasonable.
As one of the pioneers of legislating remote gaming operations, Malta has been on the cutting edge. With its solid foundation as a reputable, safe locale for legitimate operators interested in customer safety and responsible gaming, the island has welcomed some of the biggest and best in gaming.
However, it all might be hanging by a thread. Since the resignation of the LGA’s previous CEO from the post in October, Michael Gonzi has been presiding as temporary CEO until a permanent replacement is selected. However, this can’t be an enviable position for him to be in.
The interview phase was set to commence during the International Casino Exhibition in London in January but as of yet hasn’t been resolved. Enquiries made to the LGA were answered by the communications department stating, “We have absolutely no idea on which stage is the selection process.”
Such communicative methodology toes a very dangerous line with regard to what gaming operators have been saying in unison: a need for legislative clarity and clear communication for the machine to run smoothly. With so much at stake—tax revenue, jobs and foreign investment—this doesn’t seem like an overly demanding request. With the global recession, there is zero margin for error when it comes to producing and managing a country’s wealth. It’s an extraordinarily difficult task for any country, but more so for a small state greatly reliant on finance, ICT and emerging markets revenue.
Adding further concern is the current fervor over gambling “arcades” and the subsequent judicial protest that has been lodged by owners of the Casino Di Venezia, Dragonara, Oracle and the Portomaso Casinos against Minister of Finance Tonio Fenech and the LGA chairman. The casinos claim that these arcades are unregulated, pay no tax and have no enforceable age limitations. Although schedule five of the Lotteries and Other Games Act is in direct reference to Video Lottery Terminals (VLT) and their regulation, the issue is cloudy at best. Fenech was quoted in the Times recently that, “If their places fall foul of the regulations…we will close them.” And that “we will issue regulations” regarding gaming arcades. What, then, does schedule five exactly address? Have regulations been in place and not been enforced? Are there different types of machines in use? The mounting confusion and diffidence of key members in public office has to be quite alarming to not only those surveying the landscape of the jurisdiction, but even those who have already vested themselves in this market.
It’s time to implement a rational solution to the key issues of an evolving worldwide marketplace. A deliberate effort is necessary to restore and enhance the international community’s view of the Maltese jurisdiction before it slips beyond our grasp. Innovative measures and forward thinking have been the lynchpins to the emergence of Malta as a leader in the industry, and will also be paramount in its resurgence.
The first step is to select permanent leadership of the LGA. Politics should be nil in this decision and the LGA, although a public regulatory body, should be conducted with private-like efficiency. Simply put, the Authority needs to exist free of hindrances from governmental red tape and maintain its integrity.
Also, the need for technological investment is crucial to not just gaming, but myriad sectors as well. This infrastructure is necessary for iGaming with 50 percent of international bandwidth being allocated for it, and has been a negative checkmark for Malta when compared to competing jurisdictions. Amid such economic uncertainty, the time to invest in such ventures by the government would show remarkable foresight and perhaps lay the foundation for many years to come.
Finally, create a series of recurring open forums for gaming operators and vested parties to discuss the best way forward. In such a competitive market, it’s impossible to thrive by ignoring clients. The Ministry of Finance and the LGA need to hear precisely what the concerns of its clients are in order to shore up any perceived or actual shortcomings. This will, at least, restore good faith and public confidence that the government recognises a key industry and is taking the necessary steps to ensure it benefits people. But is anybody listening? |
