The Malta Independent 6 July 2025, Sunday
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Proposed 2007 Gambling arcade regulations not yet in force, new rules still not in sight

Malta Independent Sunday, 16 August 2009, 00:00 Last update: about 12 years ago

Details of the new, strict regulations on fruit machines that were to be introduced following amendments to the Lotteries and Gaming Act were given in October 2007. However, the regulations have not yet come into force.

The government announced last week that the new regulations were approved by Cabinet (it had already been approved in 2007). The government also promised to discuss them in Parliament soon after the summer recess. However, a spokesperson for the Finance Ministry has told The Malta Independent on Sunday that the draft is not yet available.

It seemed unclear when it would be available and while promising to publish it as soon as possible, the spokesperson said they would definitely be available come September.

Police raided some 85 gambling arcades last week that were operating without a licence, as the Lotteries and Gaming Authority (LGA) had not issued licences since there were no regulations in place. The arcades were ‘allowed’ to operate for a number of years and before long they had mushroomed all over the islands.

Suddenly, the government decided to shut down the outlets and confiscate the fruit machines. On the other hand, the operators of the Video Lottery Terminals (VLTs) decided to close their outlets before the police turned up since they were warned of “immediate action” against them by a government press release issued the day before.

A court battle for the warrant of a prohibitory injunction against the confiscation of the machines has now started. Although the LGA was not able to give “official” statistics on the number of people employed by the gambling companies since they were not licensed, conservatively speaking at least some 300 employees are on forced leave while the arcade doors remain shut.

Among the various amendments supposedly approved by Cabinet in 2007 were a change in classification of VLTs from amusement to gambling machines, the imposition of age limits on their use, and on-line monitoring of the machines. The amendments that the LGA had drawn up, also stipulated that a dome camera should be installed wherever a VLT is in use.

They were also to ensure that such machines were giving out payout ratios as stipulated by law, and allow the authorities to ‘plug-into’ the digital machines with a special USB key, of which only the LGA will have a copy, to assess gross earnings and payout ratios by viewing the machines’ histories.

Moreover, owners of the machines would be required to request some form of identification from users, to make sure they are not under 18.

“Inspectors will make random checks and if minors are found using the machines, the owners would be subject to a fine of e6,998,” the former LGA chairman Joe Zammit Maempel had told the Malta Business Weekly in an interview on February 2008.

VLT operators should also be licensed, have their machines registered, and their premises approved, the 2007 draft regulations had said. Heavy bank guarantees to secure the payment of fees, taxes, any fines imposed, as well as payment to winners.

“These strict regulations are specifically aimed at gaining the trust of operators and making them feel that their customers can also trust them. Operators know there is a strict regulator and since this will attract more customers, operators see the LGA in a positive light,” Mr Zammit Maempel had said.

However, since the new regulations have not come into force two years after they were announced, and the new draft is as yet unclear, operators who have invested tens of thousands of euros in their business have started to lose confidence in the LGA.

Court in gambling crackdown fiasco

A court hearing on a warrant of prohibitory injunction against the Police Commissioner and the Lotteries and Gaming Authority to stop police from confiscating gaming machines was postponed last week to 24 August as the operators of gambling outlets, who had originally filed the prohibitory injunction, had not bee notified.

On Thursday 6 August, eight gaming outlets namely Allied Games Ltd, Best Play Ltd, Gaming Operations Ltd, Media Gaming Malta EU Ltd, Laak Ltd, Vanguard Gaming Ltd, Zammit Videomatic Ltd and Silver Play Ltd filed the request for the warrant of a prohibitory injunction against the Police Commissioner and the Lotteries and Gaming Authority before the First Hall of the Civil Court. The cases were temporarily upheld and hearings were appointed for 24 August.

On Friday 7 August, the Attorney General and the Police Commissioner filed an application in the same hall calling for the annulment and revocation of the previous decision regarding the gaming outlets. The AG had wanted the case to be heard urgently and the hearing was rescheduled for Saturday 8 August. However, the gaming outlets’ representatives did not turn up as they were not informed of the change while the AG, Silvio Camilleri appeared in person backed by a panel of six lawyers.

The gaming outlets saga is currently in a state of legal confusion since the authorities suddenly decided to take action against their irregular operation when regulations to control them are not yet in force.

Bids for Dragonara casino presented this week

Although the lease of the government-owned Dragonara Casino closed in June, the government decided to extend the lease till mid January 2010.

Until Wednesday, when the bidding process closed, three companies had presented bids for the casino that had been leased since 1964 to a French company Accor-Lucien Barrier under the name of Dragonara Casino Ltd.

On 18 March, Finance Minister Tonio Fenech announced that the government was to present the regulatory bill for fruit machines in Parliament this year. A few hours later, the Dragonara Casino said in a statement that it was placing its operational staff on a four-day working week, plus one day forced leave.

The casino management had said that the situation arose partly as a result of the global recession, but mainly due to the government’s failure to control the proliferation of illegal slot operations. This was directly endangering the jobs of 220 families they had said.

On 4 May, the government announced the bidding process for the award of a new 10-year-term concession for the management, operation and development of the business activities of the Dragonara Casino Complex.

Perhaps not coincidentally, the Malta Gaming Authority last week decided to take action against the 85 Video Lottery Terminals that had opened all over the island in the last couple of years.

The leasing process, which is being conducted by the Malta Investment Management Company Limited (MIMCOL), has invited applications from reputable bidders experienced in the casino management business that can make substantial capital investment and the required refurbishment, upgrading and modernisation that will enhance Dragonara Casino’s competitive stature in the sector and support its distinctive positioning as a regional entertainment centre and a high calibre leisure attraction, the government said in a statement yesterday.

In a statement, the government said that it aims to ensure the Dragonara Casino will provide an upmarket and unique gaming experience, backed by leading edge gaming equipment and technology and excellent customer service.

While the request for proposals documentation had been collected by five potential proponents, only three proposals were presented – Tomino Ltd, Novomatic Peninsula consortium and Dragonara Casino Ltd – by noon on Wednesday, the closing date for submission of applications.

Tumas Group and Pinnacle Gaming Group, owners of a franchise of video lottery terminals were said to be the first two competing companies.

While reports on sections of the media pointed out that the bids were very similar in financial terms, the government said it is committed to provide “a fair, transparent and objective selection process through the appointment of an ad hoc Evaluation Committee”.

On the basis of a detailed assessment of the received proposals, the Evaluation Committee will make recommendations to the government with respect to the identification of the highest quality proposals leading to the selection of the short-listed proponents with whom to negotiate for the concession.

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