As Charles Darwin once observed “it is not the strongest that survive, nor the most intelligent, it is those who are most responsive to change”.
The Malta Gaming Authority’s annual report for 2015 was themed ‘regulation for innovation’ and we are moving into the new year with this theme in mind. This past year virtual reality in gaming has taken a step forward towards becoming a reality with more to come - the possibilities are endless.
Bearing these range of possibilities in mind what should governments and regulators do to stay relevant and ahead of this wave of change?
Just a few weeks ago I had the pleasure to address the Malta iGaming Seminar (MiGS) and the Summit of iGaming - Malta (SiGMA) which have become two of the most important gaming events in the industry’s calendar in Malta. Both SiGMA and MiGS have established themselves internationally, placing Malta prominently on the map in the conference and expo gaming arena.
Furthermore, the quality of both events is second to none, hosting a prestigious line-up of attendees, speakers and participants alike.
The theme I chose this year for both my speeches revolved around “Efficacy, relevance and sustainability in a disruptive environment”. I was motivated by the unprecedented period of rapid change impacting the industry driven mainly by innovation which is becoming increasingly mission critical. This is being enabled by new technologies, distribution platforms, a wide network of cross-sectoral service providers, outsourcing and game innovation like virtual reality games. Added to this, the increased convergence between games, channels and markets (the delineation between online games and games provided through fixed terminals is becoming increasingly blurred) coupled with the advent of virtual currencies and block chain technology brings with it a number of regulatory challenges which need to be addressed.
On top of all this, the higher costs of access to markets particularly in Europe is expected to increase merger and acquisition activity for the foreseeable future driven mainly to address cost efficiencies, synergies, dominance and market access obstacles.
In this evolving scenario, the obvious question is: how can Malta remain a relevant jurisdiction in the gaming sector? The answer to this question lies around essentially four key pillars which are critical to navigate amid the changes ahead, which are:
The Malta Gaming Authority as the organisation regulating the gaming industry; Malta as the trusted jurisdiction with its reliable and sophisticated ecosystem; long-term strategic repositioning and integrity in our regulatory ethos; and the future proofing and strengthening of our legal and regulatory framework.
There is only one constant in our regulatory ethos – and that is change
Having an open, fair and transparent regulator is key in regulating markets in modern economies and gaming is no exception to this. The core principles and values underpinning the government’s regulatory policy in gaming are non-negotiable and will never change.
The transformation which took place at the MGA in the last three years and is set to continue, was motivated by a recalibration exercise aimed at creating a robust organisation underpinned by a strategy to future proof our framework for the years ahead and allow for future growth and sustainability. While this could have been considered disruptive in the short term, it was nonetheless critically important.
The need to have a stronger regulator equipped with the necessary resources, tools, skills and technology to be effective and agile in the execution of its functions has become mission critical for effective decision-making and long-term sustainability. Our continuous improvement programme should lead to more efficiency, efficacy and proactivity in an increasingly disruptive environment in the years ahead.
Most regulators fall into the trap of retaining conventional wisdom as a safe, justified and comfortable zone. Having new people within the organisation coupled with our outreach programme and involvement of experts and consultants in the field brought about alternatives to the status quo, paving the way for creative thinking and alternatives in the tools and processes for change management resulting in revamped internal systems and processes, thereby creating a differentiating factor from other peers.
Pre-empting such requirements, underpinned by the years of experience and skilled workforce, avoids us being driven by external forces to drive change. There is only one constant in our regulatory ethos – that is change.
We started off with a new brand/corporate identity and completely overhauled our communications and public outreach. We are striving to bring in new gaming products and services under the governance of the authority in order to evolve with the times and needs of the businesses and operations we regulate and supervise.
We believe that if we embrace new technologies with the support of the industry we can master the right approaches and remain relevant. This will not happen at the cost of cannibalising our core values.
We remain committed to retain consumers (players) and their protection at the centre of everything we do through effective regulation and adequate responsible gaming parameters.
As we look to ride the wave of change which 2017 will surely unfold, it is important to keep track of the end game. The government remains committed to this, coupled with the belief that regulation is the better option than prohibition for a healthy ecosystem which is crime-free and built on sound consumer protection policies.
A do-nothing approach is not an option. We must therefore anticipate and prepare for the technological change and developments ahead through technology neutral regulation which will improve the effectiveness of decision making with flexibility for the regulator, together with the possibilities of growing convergence between channels and cross-sectoral businesses no matter how disruptive or challenging this may be.
The industry is on a healthy growth trajectory. This is no coincidence but the result of the trust and integrity enjoyed by our jurisdiction and also the strategic repositioning which has taken place over the last few years. Furthermore, the government’s unrelenting support and keenness for change with respect to the gaming industry has motivated and strengthened the authority to aim for new heights and build on past successes.
With the support of all stakeholders, I have no doubt that Malta has a bright future ahead not just as a place of establishment but as a thought leader and innovator in gaming regulation.
Joseph Cuschieri is executive chairman of the Malta Gaming Authority.