Gaming arcades' future uncertain

Finance Minister Tonio Fenech has warned the operators of the gaming arcades, mushrooming across the island, that their future is not guaranteed.

"If their places fall foul of the regulations (that still have to be issued) we will close them," he said, admitting he was worried about the social ramifications and stressing the law's introduction was his priority.

These arcades are exploiting the absence of a legal framework and opening in every village and town under the guise of amusement machine outlets, sometimes just metres away from youth centres.

Mr Fenech recognises this void and the pressing need to regulate the industry - both to avoid the country becoming a nation of gamblers and to minimise the impact the arcades were having on Malta's four casinos.

On Friday, casino owners filed a judicial protest against Mr Fenech and the Lotteries and Gaming Authority over the situation, which they said, is leading to losses due to unfair competition.

They complained that the proposed regulations had never come into effect and in the meantime the arcades were operating free of any restrictions, allowing people of all ages to gamble and not paying the 40 per cent gambling tax.

Contacted by The Sunday Times yesterday, Mr Fenech said: "I appreciate the casinos' position that they feel the situation is developing to their detriment. And, as a government, we don't want to see everywhere turning into a small casino, so we will be pushing the regulations forward."

The promised legislation has been long coming. In June, Mr Fenech had said that a consultation document, geared to responsibly control the gaming industry, had been published and the legal notices were expected to be issued before the end of 2008.

However, in the meantime, the authority chief executive Mario Galea, who was a well-known profile within international circles, resigned in October and to date nobody has been chosen to permanently fill his position, which delays matters.

Mr Fenech acknowledged the sensitivity and the importance of this post, both nationally and internationally, so the process to identify and appoint a CEO is underway and being "professionally handled".

Regulating the gaming industry is a very delicate process, Mr Fenech said, because the way the local laws were drawn up had to consider international laws.

When questioned about specific timelines for the regulations' introduction, he said: "I have the authority working on it and I'm pressing it to give me its conclusions as early as possible. However, this is a very complex legal issue and I'm hoping we can start seeing results in the not too distant future."

Could the government do something temporary to stop the arcades from continuing to open?

"The government is fast-tracking any regulations possible, within legal limits and without jeopardising jobs and business in the regulated sectors, including casinos and iGaming," he said.

"All I can tell the investors, who have put their money in these places, is that just because you have opened does not mean you have any legitimate right to remain there.

"We will issue regulations, even in terms of where they can open and how far they should be from certain places."

The present situation is further exacerbated because the arcades' lack of legal standing makes it hard for the police to enforce. Some had a permit from the Malta Environment and Planning Authority, others had a trading licence of sorts, and some operated without a licence.

"They are mired in a swamp of loopholes, so it a problem enforcing. When police did try to enforce they failed to hold ground in court so clearly we have to ensure the regulations are very clear," he said.

"Also, we want people to know that just because they have a Mepa permit, this will not entitle them to being licensed if they are breach of the regulations we are issuing. Therefore, I am not giving guarantees to anyone in terms of who will be accepted to remain open in the future. If their places fall foul of the regulations we will close them," he stressed.