A draft legal notice for the licensing of digital games of skill with prizes is being sent to stakeholders for feedback after it was approved by Cabinet – and could be enacted as law as soon as September.
The head of the Lotteries and Gaming Authority Joe Cuschieri said there was considerable interest from companies wanting licences but there was as yet no legal mechanism for these to be issued.
“It is a €5 billion market globally and it will grow as young people are very interested in this form of entertainment. For Malta, it is a very important way to diversify from online gambling to a new sector, even though it is not as lucrative. It will certainly mean more jobs: although you tend to have smaller companies, there will be more of them. And it will have a large multiplier effect,” he said.
Malta Enterprise is concurrently working on attracting digital games development, which would complement the LGA’s efforts as it tries to “future-proof” the industry, currently under pressure from other member states trying to protect their own gaming industry.
Indeed, the LGA is looking at a wide variety of options, including the possibility of linking up with Asian and Latin American markets where there are “huge” opportunities.
“These are enormous markets of hundreds of millions of people but gaming is very restricted. For example, online gaming is banned in China and only digital games of skill are allowed.
“I believe that these countries will eventually open up and I want Malta to be a pioneer, to host companies from these countries and eventually to also have access to these markets. We have started dialogue with regulators there and I have commissioned a report on these markets. Once this is done, it could perhaps be followed through at diplomatic level.”
At a recent seminar in the Philippines, contacts were also made with companies specialising in casino tourism – especially for very high net worth individuals – which is already being spearheaded by casino operators in Malta but which the LGA will also help to promote.
Malta has been careful to remain a user-friendly jurisdiction for the numerous operators here, which are being squeezed by new regulations and directives, such as the need to have a licence in each member state in which they operate. The latest onslaught is coming via the Council of Europe’s sports convention, with the European Commission claiming joint competence to establish that online or land-based betting would be illegal if it takes place in a country where the operator is not licensed.
It is a €5 billion market globally and it will grow as young people are very interested in this form of entertainment- Joe Cuschieri
“Cabinet has decided to take this very seriously and make our case with a certain determination. We are willing to take our position as far as we need to,” he warned. Malta has already tried to stop the convention without success.
“If an operator is licensed in Malta, they should not be illegal in another member state. The EU Treaty enshrines freedom of movement of establishment.”
In some cases, the LGA takes a pragmatic approach. For example, the UK has a new remote gaming regime which means operators need to be licensed there. It affects a considerable proportion of companies in Malta but Mr Cuschieri does not believe that the UK will succeed in enticing companies to repatriate there as there are still many other competitive advantages in Malta, not the least of which is the tax regime: companies here only pay a total of €26 million in tax. However, he opted to work with the British regulator in the interest of local companies and agreed on a simplified process so operators do not need to go through the entire due diligence process.
“For example, we will give the UK regulator a letter of assurance that we have already carried out certain checks,” he said.
Following consultations with a number of stakeholders including the Malta Remote Gaming Council and the Chamber of Commerce, Enterprise and Industry, the authority also launched a series of “quick wins” which came into force with immediate effect.
“They are not very major things but they are changes that the industry has been clamouring for,” he said.
“There is more planned. We are reviewing legislation covering a number of aspects – but it takes at least a year, given the consultation and drafting process. We are contemplating taking some aspects of it which are very important to the industry – like a multiplatform licence – to see if we can speed up the process. Big companies can have dozens of licences so it would be a great help to them.”