Editorial
Betting on the future of online gaming
The future of the online remote gaming industry has been seriously threatened by a recent European Court of Justice ruling in favour of the Portuguese government's gaming monopoly and against Bwin, a major online Austrian gaming group that has a subsidiary in Malta.
The case was based on the contention on whether state gaming monopolies, in their pursuit to prevent crime, breach the EU's provisions on free trade in goods and services.
The judgement against Bwin confirms a previous sentence given by the ECJ in 2003 in the Gambelli case confirming that gaming state monopolies "can be justified only for reasons of public health or the prevention of crimes, like money laundering, fraud and game fixing". There are six other similar pending cases in EU courts. The outcomes of these cases are awaited with some trepidation by the online gaming industry.
Where does this leave the fledging and successful online gaming industry in Malta?
Malta accounts for 10 per cent of the online remote betting business. Employment in this sector is estimated to have reached 2,100 and is constantly growing, attracting many young professionals qualified in accountancy, risk management, IT and communications. It is indeed the rising star of the new economy industries that this country wants to foster.
The Achilles' heel of this industry is the lack of regulation that upsets many EU state governments. In fact, Bwin has already lost a number of lawsuits in countries like Germany where the state and federal governments defend their monopolistic gaming rights with ardour. Whether this is done out of moral conviction to protect the perceived victims of gambling from exploitation and abuse by criminals is, of course, very debatable. What is certain is that this latest decision is likely to encourage more EU countries to invoke the ECJ judgement to protect their own betting industries as a matter of economic expediency.
However, the court's decision may not be the final word that determines the future of the remote online gaming industry. In fact, after giving judgement on this case, the ECJ invited delegates of other EU member states to make representations on a number of aspects that may lead to a compromise between state monopolistic rights and the promoters of the liberalisation of online gaming.
The proper regulation of this industry by the EU Commission would go a long way to ease the tensions brought about by this case. Governments do have legitimate rights to defend their citizens from criminals. But business entrepreneurs too have rights to provide a legitimate service to EU citizens who opt for such a service.
The main challenge facing Malta's online gaming industry will be the uncertainty that is likely to surround the business from now on. Getting EU states to agree on proper legislation to regulate the industry will not be easy because every state will defend its own vested interests.
Moreover, as the judgments in the pending lawsuits start to be pronounced, any further confirmation of the right of governments to defend their monopolistic gaming rights is bound to dampen any desire for further investment. The fact that the anti-gaming liberalisation lobby includes influential countries like France, Germany and the Netherlands makes the task of dispelling uncertainty even more daunting.
Malta's representatives in the EU governing bodies need to start preparing the country's case for the defence of this important industry.
7 Comments
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Pierre Mangion
Sep 18th 2009, 11:07
I agree with the comments penned by Mr. Adrian Vella.
in commenting to the judgement given by the ECJ, the bwin lawyers stated that the biggest risk is that whilst protecting their monopolies, EU states would be pushing online gaming to unregulated jurisdictions.
the role of Malta within the online gaming scenario was that it was the first EU country to offer a regulatory structure with the main focus on the protection of the players data and funds. Malta does not promote online gaming but the regulation of such. Unfortuntely this is not seen in the whole perspective particularly when considering that online gaming has been around for more than a decade.
what Malta needs to do is to keep ahead of the other jurisdictions by being pro-active in updating and maintaining its regulations. This way the island could still attract those operators that are interested in offering an regulated product to their customers.
as for the talks relative to Malta promoting an adictive product, i have not seen any complaints relative to the local gaming operator promoting their products on a daily basis in the local media!!!!
Adrian Vella
Sep 17th 2009, 10:35
This issue has nothing to do with whether gambling is right or wrong. This issue is whether gambling should be run solely by monopolies, totally against the concept of free trade the European Union was built upon.
The court ruling stated that the monopolies, which have a conflict of interest, are more able to protect players than govermental authorities, which do not have a conflict of interest.
In our case Malta has fully fledged regulations which are enforced by the LGA, the regulator, whose reason of existance is to protect the players and not to make money off them as the monopolies do.
In my opinion the ECJ judgement is wrong and our Government should start making a noise about it before it is too late and the maipulating monopolies get their way at our expense.
For the holier than thou ones, gambling always existed and will always exist but that is not the issue in this case.
Paul Borg
Sep 16th 2009, 23:05
I have always been dumbfounded how a supposedly Christian Democrat Government like ours can preach from the parvis (zuntier) and then actively promote gambling. I know that they will say it's regulated in order to prevent those addicted to gambling but we all know that anyone addicted will find the way and means to gratify his/her addiction.
And what about the gambling dens that are mushrooming in every town and village, even next to schools, churches and Muzew.
marisa micallef
Sep 16th 2009, 18:40
amazing. a country that thinks divorce is immoral and breaks up families has no qualms about encouraging online gambling which leads to so much poverty, social ills and family break ups
Jos Vella
Sep 16th 2009, 18:29
betting is like drugs! it brings addiction! addiction brings destruction! illegal loans which lead to usury, thefts, violence and deprivation of freedom.
whether legal or not, all sort of betting including online gaming should be banned. why is it that mankind created money and money has taken control over mankind????
Kevin Pirotta
Sep 16th 2009, 14:54
I see Victor Caruna's point. Given what a grey area online betting is, coupled with the fact that court rulings are not exactly going the desired way, this could quite tragically turn out to be a case of more than 2,000 eggs in one basket. I honestly and earnestly hope that I am wrong here, if nothing else for my son's sake who is pursuing a career in IT.
victor caruana
Sep 16th 2009, 13:35
Quote: 'It is indeed the rising star of the new economy industries that this country wants to foster.'
CAN YOU BELIEVE THAT??????????????/