Gambling arcades in legal limbo operating without a licence

The gaming arcades mushrooming around the island are exploiting a legal limbo and The Times has learnt that no authority is responsible for issuing them with a trading licence.

There are about 10,000 gaming machines that previously were located in clubs but are now resurfacing within the confines of arcades. Mario Galea, Lotteries and Gaming Authority chief executive, said that, as a result, such machines had now become more visible.

The legality of the machines was in doubt and Mr Galea said that, while some paid the licence for amusement machines, in reality the authority "did not know the situation of most of these machines" since there was never a proper standard that defined them.

Finance Minister Tonio Fenech admits the arcades were exploiting the void within the legal framework, which was in transition, and opening "under the guise" of amusement machine outlets.

In this Saturday's edition of Pink magazine, a publication of The Times which this month investigates compulsive gambling, Mr Fenech said: "We are not happy to see these arcades sprouting everywhere".

At the moment, there are no regulations binding the use of these so-called amusement machines, although street slot machines are prohibited, except within the confines of a casino. The Lotteries and Other Games Act, 2001, makes provision for video lottery terminals (VLTs), and the authority has finalised draft regulations in this respect.

Mr Fenech emphasised that the government was tackling the problem and a consultation document, geared to responsibly control the gaming industry, has already been published. The legal notices are expected to be issued before the year is out.

In the meantime, Mr Fenech is not aware that these arcades have a trading licence even if, technically, every operator - whether a greengrocer, or a gaming arcade - should be in possession of such a permit.

Mr Galea said these arcades should have a licence of some sort but, in reality they have none because they opened before the regulations were issued and enforced.

"Lately, because the operators found themselves cornered and realised the old regime will be out and new regulations will be coming in, they moved out of the clubs and some even invested in new VLT machines," he explained.

Once the regulations are out, the VLTs will be linked to the authority providing it with a real-time view of what was happening and who was using the machines, making for greater control.

The authority had recognised, Mr Galea said, how these arcades were exploiting the legal limbo and it will now be adding a specific section in the law to regulate them and ensure each one was licensed.

"To date, the authority has not taken responsibility of these arcades but we will. They will have specific regulations and we expect them to operate at the same level of casinos, with CCTV cameras, and the works," he said.

At the moment, such arcades allow people over 18 to enter while casinos prohibit Maltese under 25 to set foot inside. Asked if the authority planned to bring the age limit of the arcades in line with that of casinos, Mr Galea said he will be looking into the matter.

The authority was focused on the entertainment part of gaming and it was bent on creating a balance between economic benefits and consumer protection, Mr Galea said.