Noel Grima

There are no less than 283 gaming companies registered in Malta, representing 469 licences, up from 255 gaming companies in 2013, 275 in 2012, 278 in 2011 and 262 in 2010.

This information, and more, was presented at a Business Breakfast held at the Hilton yesterday organized by this paper and the Malta Gaming Authority.

The previous night, MGA had issued its annual report so the business breakfast served to showcase what has been done in 2014 and what is currently being done.

MGA chairman Joseph Cuschieri explained first what MGA is currently doing. MGA's main remit is to protect the consumer and to watch against money laundering.

There is a great need for the upgrading of the current legislation - Parliamentary Secretary Jose Herrera later said some of the laws in this regard go back to the 1930s and some (eg on horse racing) go back to the times of the Order.

The plan is for MGA to come up with proposals for a new legislation which can then be discussed by Parliament later in the year.

There is also need to get more Maltese to acquire skills in this regard as two-thirds of the people in the gaming industry are non-Maltese. So a Gaming Academy will soon be set up.

Malta is a giant in the European gaming industry since it started regulation well ahead of other countries. But its position as the Silicon Valley of European Gaming can easily slip because of the multiple legislative changes being introduced by other European member states. For in this regard, as Dr Herrera put it, the European insistence on freedom of movement does not seem to operate at the level of services.

Many countries have thus introduced VAT on gaming starting on 1 January 2015 and since this varies from country to country, MGA and the industry have to have multiple accounts according to the countries of the clients.

The EU last week published the fourth anti-money laundering directive and this adds further burdens.

Faced with this, and other obstacles, some might fear that the gaming companies might fly away from Malta. This is still unlikely, Mr Cuschieri said, for Malta still has many advantages over possible competitors - its ICT infrastructure is in place, as is its regulatory framework, Malta is an English-speaking country and has accumulated skills and experience which it is difficult to replicate elsewhere. And significantly, the cost base in Malta is cheaper than in other countries.

One issue that has been dogging the sector for the past months regards what began innocuously as a Council of Europe proposed directive against match fixing and corruption in sports which originally included a clause that could be interpreted as saying that depending on the definition of illegal betting, the country of origin of that website could be liable to damages. Interpreted wrongly, this could have been the end of the gaming industry in Malta. But the government, especially Dr Herrera, have reacted at all levels and asked for an opinion by the European Court of Justice which is still pending.

Meanwhile the LGA has been beefed up so as to carry out its regulatory duties better, as has its ICT capacity. LGA is moving to SmartCity Malta in September and LGA is trying to expand its regulatory business to other jurisdictions. There is a pressing need for technical standards to be standardized across the EU, rather than each country having its own standards.

LGA is also trying to attract business and customers from outside the EU.

Finally, LGA has set up GamingMalta to operate just as FinanceMalta operates for the financial sector - to attract new business.

As regards numbers, revenue from the sector topped €5.74 million in 2014, an 11% increase while costs increased by 5.6% because of a higher human resources bill.

Dr Herrera who spoke after Mr Cuschieri was naturally asked about this increase and explained the authority lacked proper expertise in the many specialist subjects and has to train its staff in this regard.

With some 9,000 employees in the sector, plus various indirect impacts around the country, LGA is poised to improve on its throughput.

Gaming today is one of the big four industries in Malta. As regards casino gaming, the recent decision to allow cruise liners staying in Malta overnight to open their casinos for the passengers at night has been welcomed by the industry and, while being targeted originally for next year, has already been put into effect in the past weeks.

During question time, Paul Abela from GRTU asked about possible impacts on lotto receivers considering the increased use of mobile phones especially by the young who may not be as amenable to walk to the stationer to get the paper, who see television on their smartphone, and who gamble more online than through the corner Maltco agents. The government too stands to lose part of its €60 million revenue in this way too.

Mr Cuschieri said Malta still has the edge over other member states. In Malta, the government is no longer an operator, while the government is still an operator elsewhere. Maltco  has also improved on the technology used.

Dr Herrera also paid tribute to the preceding PN administration for the foresight in creating the gaming industry at a time when Europe was in a financial mess.

LGA and the ministry are at present considering the introduction of Malta's version of Guardia di Finanza to enhance regulation and transparency.