Government rakes in over €10m in tax from gambling

Tax collected from casinos in 2009 amounted to €9,595,440 while the income from commercial bingo in the same year reached €642,220, Labour MP Alfred Sant told Parliament on Monday. He warned, however, that gambling led to an effect on the economy and on society.

Speaking during the debate on the Bill amending the Gaming Act, Dr Sant said the industry had grown rapidly. The local market included casinos, lotto and sports betting while the global market featured remote gaming. These resulted in great economic and social changes.

On a local level, the change started when in 1996-1998, the Labour government had decided to liberalise casinos in order to help tourism. This was restricted to two casinos in Malta and a further casino in Gozo. After 1998, however, the Nationalist government had led to the current situation of four casinos in Malta and three further casinos which had permits to start operating. Dr Sant believed this had been a dangerous decision.

He called the casino in Vittoriosa “a social sin”, encouraging people to spend money on gaming instead of investing it.

The government had also privatised national gaming and let betting shops operate without any regulation for a long period. This had led more families to take up gambling.

At a time when everyone was highlighting the importance of safeguarding the values of the family, no one was acknowledging the negative impact of this sector on families. This situation could lead to great social problems. Dr Sant hoped that the new Permanent Committee of Family Affairs would analyse the effects of gaming on the status of families.

The government had benefited greatly from the gaming industry. It was vital that the government gave the correct information on how this sector was faring. Much of the information presented had been fragmented to hide certain implications. The most recent reports published by the Economic Survey, the IMF and the Lotteries and Gaming Authority failed to give a clear picture on how this sector was operating and the impact it was having on the economy and society.

He said the authorities should have a sense of responsibility and be aware of the fact that gambling could break up families. On the other hand, one had to accept that this industry had created jobs and it was a business which would always be around.

In 2009/2010, some 5,053 persons were employed in the industry. Of these, 3,178 jobs were related to remote gaming with the remaining 1,875 were involved in local gambling. This was a substantial amount when compared to 10 years ago. It was, therefore, important to find the right balance.

The EU Commission recently published a Green Paper dealing with gaming in Europe. To date, there was still no European political control on the industry and member states had their own regulations set on certain established parameters. The Green Paper suggested a new regulatory structure which could be applied to EU member-states.

According to the Green Paper, the industry in Europe was estimated to be worth €6.2 billion in 2008, a sum that was expected to double by 2013. It was calculated that the local expenditure on remote gaming in Malta amounted to €5 million. Internet gaming on the island was divided as follows: 76 per cent casino betting; 16 per cent poker betting and seven per cent sport betting.

According to this paper, among all EU member states, Malta had the highest contribution from internet gaming. In 2008, this amounted to 7.82 per cent of the GDP. In 2009, the IMF had calculated that remote gaming amounted to between eight and nine per cent of the GDP. The Finance Minister had denied this at the time, yet the Green Paper was now reconfirming such claims. This was a considerable proportion of the GDP and it was wrong not to recognise it.

Although it was good that this sector was faring well, it was important to note that there had been a rapid change that was focusing the economy on one sector. This was not healthy. Countries like Ireland, Iceland and the UK had shown that it was detrimental when only one sector dominated the economy. Measures had to be taken to combat this imbalance.

One had to keep in mind that local gaming was restricting liquidity and families’ purchasing power. International gaming was not having a trickle-down effect to generate more work in other sectors. Although the economy seemed to be growing, this was masking the fact that the self-employed and those in the manufacturing industry had less income.

The EU had increasingly been evaluating the effects of corruption on gaming. Many sports results were being manipulated to obtain huge illegal gains. The government was being too complacent on such issues.

Malta had to be at the forefront and ensure that the regulation for this sector was serious and honest. There should be a distinction between the regulatory and promotional aspects of this industry and these should be controlled by different agencies, Dr Sant said.