Regulator gave financial incentives to gaming arcades - defence lawyer

The gaming authority had given financial incentives to the arcades at the centre of a government-backed clampdown, a court heard yesterday.

"How could the authority encourage the operators to invest (in one case as much as €5.5 million) and give all the incentives and then wake up one day and say no, you cannot operate", lawyer Joseph Giglio argued in a packed courtroom yesterday.

His comments came as the authority's lawyer accused the eight gaming operators fighting a clamp down on such arcades of "clutching at straws". The operators had requested a temporary warrant of prohibitory injunction to stop the police from removing allegedly unlicensed machines from their outlets. The warrant was upheld on August 6 by Mr Justice Albert Magri.

The legal battle started after the police carried out a series of raids on gaming arcades across the island on August 6. Last March, Finance Minister Tonio Fenech had said it was difficult for the police to take action because of lacunas in the law and the ministry could not explain what had changed when asked what spurred the action this time round.

Dr Giglio's arguments in court hinged on this point. He pointed out that the operators were given a general exemption from a legal notice that came into force on October 1, 2007, as the former Lottery and Gaming Authority CEO Mario Galea testified on Monday.

But the authority's lawyer, Henri Mizzi, insisted there was never any general exemption issued and absolutely nobody could have granted one.

Dr Giglio however insisted that a central computer system needed by the authority to monitor the machines was not in place and this was the reason why the authority extended the dates by which the operators had to conform to new regulations and issued the general exemption.

The government was so sure of the regulations that in the budget it had included estimates of how much it was expected to rake in from operators, Dr Giglio said.

Dr Mizzi rebutted the arguments, insisting that the arcades were not regulated.

"Instead of waiting for the regulations to come into force, they (the gaming arcade owners) took the law into their own hands... and invested a lot of money when the legislator had not yet issued the regulations and specifications for the machines", Dr Mizzi said.

Mr Justice Magri is expected to hand down a decision either this morning or tomorrow.