Gaming sector: stickier than we think...

Gaming sector: stickier than we think...

Betsson CEO Ulrik Bengtsson

Betsson CEO Ulrik Bengtsson

There are a number of factors that attracted Betsson to Malta in 2005 and they would be unlikely to leave unless all of them changed dramatically, “which is unlikely”, chief executive officer Ulrik Bengtsson said.

In spite of the fact that Betsson (and numerous other gaming companies) have been here for years and are still investing – the company recently relocated to new offices in Ta’ Xbiex to accommodate its growing cohort – the Maltese still view the online gaming sector as “fickle”, fretting that companies could leave without a backward glance.

One of the main question marks is not local but external: the European Commission could pass legislation which would mandate a local licence for each member state.

“Companies do move to where they believe is most beneficial, but this is not done overnight. This is done over a five- to 10-year cycle,” he said.

“If we needed a licence for each member state, then we would not need the Malta licence. Would we leave? No, there are other factors that would probably be enough to keep us here.”

That the spectre of the departure of the gaming sector should send shivers down the spine of stakeholders is understandable. The sector, virtually unheard of just over a decade ago, has grown to one that employs 7,000 people directly and 3,000 indirectly, representing a staggering 12 per cent of the economy.

“There were many things which attracted us to Malta and many which have improved and are still improving, such as the skills base. Regulation is improving and has become more company friendly all the time, too. In fact, we welcomed the recent indication by Lotteries and Gaming Authority CEO Joe Cuschieri that he is considering a ‘super-licence’ which would make it easier to add new brands and products. The amount of administration and the cost for licensing is massive. It drives us crazy.

“But Malta has achieved a lot in this sector and it should be very proud of it.”

The figures for Betsson’s reach are impressive. Betsson started in 1963 with land-based casinos and then entered the gaming market. It was among the first to go online.It now has six million customers in 20 markets for its 20 brands.

There are many things which attracted us to Malta and many which have improved and are still improving, such as the skills base

But the company is very pragmatic about expansion into new territory. For example, it is not active in France, Spain or Belgium because the taxes there are too high. It uses its Malta licence for most jurisdictions, only using local licences in Italy, Denmark and Estonia.

But this might change if the new EU legislation comes into force – as seems quite probable. Gaming companies would need local licences for each of the jurisdictions within five to seven years.

“This is the discussion now: each member state will have its own regulation on player protection and its own tax regime. If these are attractive – like Denmark – then it could work. But if they are not, if member states are too greedy or the terms too onerous, then companies will simply not apply to register in that member state and it will lose out on the tax revenue, employment and indirect spending.

“And when that happens, then we will almost certainly see re-regulation in the longer term. The danger is that, in the meantime, players would not be able to access the games that they want as the service will not be available in their country. So they will drift to providers in jurisdictions outside the EU, like Curacao, which might not be as well regulated.

“The problem is that for Malta, this is a big deal because the sector is a big proportion of its GDP, but in other member states, there is no one who is really going to pay too much attention.”

Being located in Malta has its drawbacks. The turnover of staff is 20 per cent, twice what it would be in Sweden.

“It is in our DNA to treat staff well,” he said, a claim which is clearly justified given the mix of chill-out space, staff services and airy offices in the new headquarters in Ta’ Xbiex.

“We have staff from 39 countries but while the 200 Maltese tend to stay with us long term, the other 400 have more churn, especially in the call centre. These tend to be people who want to experience life overseas and it is very often their first job. So although they love Malta, they do not come here intending to stay for life,” he said.

This is no laughing matter for the firm, which spends “millions of euro” every year in recruitment and relocation costs.

“It is a big cost item, especially when you want to recruit world-class people. We do find many skills in Malta but some are very specific – like search engine optimisation and data analysis – and are hard to source from anywhere! We need leading-edge experience in these fields,” he explained.

“There are other areas, like engineers for software development, where we must import people although we believe that these could easily be provided from Malta. We would be happy to guide the academic institutions as to what this sector requires, as all the gaming companies are screaming for them! We have already met the Education Minister to discuss this and the government seems to be taking it on board.”

What lies ahead? There are new markets such as the US, which has taken a protectionist view but is now possibly opening up. Mr Bengtsson said Betsson had no plans to look at this market and is adopting a “wait and see” attitude.

There is also scant focus on Asia.

“We have an experimental joint venture in China but the problem is that the regulatory environment is not that clear. You are right. Europe has been our priority, but we will be keeping an eye on other areas. If the Maltese licence could be validated there, it would be fantastic and we would operate under the Maltese regulatory regime...,” he said.

Responsible gaming

Gaming companies face a lot of scepticism when they say that they are all in favour of responsible gaming.

“People think that we say this because it is the right thing to say,” Mr Bengtsson said wearily.

“We strongly believe that people with gambling problems are not happy customers and we want our customers to be happy. We want them to come to us for entertainment. It is not good for anyone concerned if they overspend.”

Betsson has numerous online tools to help players to help themselves and Mr Bengtsson believes that these are even more effective at helping players self-control their gaming than the remedies available for land-based gamblers.

“Having to go to seek help is a barrier for those with problems. Being able to use online tools helps them to set their own playing limits and, of course, we can also step in to stop them from playing,” he said, quoting from a Swedish survey last year which found that people who played offline slot machines were five times more inclined to have problems – in the widest definition – than those who play online.

“But this figure has to be taken into the context of the overall findings of the survey: Only two per cent of players had any kind of problem. Sometimes the facts get lost in the chatter...”

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