Malta’s ‘Silicon Valley’ of remote gaming
Malta’s future in the gaming industry looks bright and with good prospects comes the need for good regulation
The Malta Gaming Authority has restructured to enable itself to adapt to this dynamic business. What were the major changes you implemented when you started heading the agency?
We have put in place a stronger management and governance structure. The MGA is now split into essentially six directorates namely: Legal & International Affairs, Enforcement, Compliance, Authorisations, Operations (which include HR and IT) & Finance. Furthermore, we have strengthened the Chairman’s office to cater for programme management, stakeholder engagement, innovation, policy and strategy. We have also put in place an Audit Committee, a supervisory council and beefed up our Internal Audit function. Apart from this, we have also engaged more people in enforcement, support services and compliance to address gaps we had in our resources. More information can be accessed at: http://www.mga.org.mt/about-us/mga-structure/
Let us look at the turnovers in the gaming sector, what are the direct contributions to the economy and the indirect contributions?
The sector contributes around 10% of Malta’s Gross Value Added if one had to include the land based sector i.e. national lottery, casinos, gaming parlours and bingo halls. The sector’s contributions include gaming and income taxes, direct employment, property rentals & procurement of services e.g. ICT, corporate services, supplies and other services. Furthermore, the sector has an indirect impact on the entertainment industry and other support services the gaming industry procures to run its business.
Why do foreign gaming companies seek Malta?
Malta has a sophisticated and well-developed ecosystem that has built a high level of critical mass that is not easily copied by other jurisdictions. By ecosystem I mean the whole industry and the support services driving it, which are, in my opinion, world class. Apart from that, Malta’s regulatory regime is effective and transparent with a regulatory authority that is highly skilled and experienced.
Malta is in essence a role model for other countries to follow. Other facets of our attraction as a place of establishment include the underlying ICT infrastructure, Mediterranean lifestyle, strong banking system, English speaking population, agility, fiscal regime and skilled workforce. Putting all this together makes Malta the undisputed place of establishment for remote gaming. Our plans are targeted towards making Malta the “Silicon Valley” for remote gaming.
Are we selling ourselves cheap?
No. We don’t sell ourselves cheap and we never should. Malta is a jurisdiction of repute and our success should not be dependent on being a low cost jurisdiction. On the contrary, our unique selling point is the integrity of our jurisdiction and the manner in which we approach our regulatory ethos. Of course, competitiveness is critical but reputation and integrity are priceless. Our success is and should be based on that.
How do you promote Malta as a centre for remote gaming?
We participate in many gaming events globally where we showcase Malta and its attractiveness as a gaming jurisdiction. Furthermore we collaborate closely with practitioners in the field and other stakeholders. We have also built a strong social media and PR presence where we communicate our message and developments in the sector using a variety of channels.
What are the lacunas and issues we still face?
Our challenge is to remain relevant in a fast paced and dynamic environment. Our agenda for the future is based on innovation and growth. Plans to improve existing legislation to cater for new technologies, innovations and growth should leave the desired effect on the industry. I am sure that all stakeholders will appreciate what we have in mind.
Do you not believe that the participation of Maltese nationals in the gaming sector is still far too low?
It is low but having expats working in Malta is a positive thing. It has helped us build the right competencies and skills. It is a fact that two thirds of employees in the remote gaming sector are foreigners. What we need to do to increase participation of Maltese nationals is to create the right training and development institutions to build the required skills. The new Gaming Academy of Malta to be launched next year is designed to address that gap.
There are a number of concerns that the advantages we offer gaming companies may be at risk. How real are these?
Risks are always there, in any kind of business. What we do to address those risks is what defines outcomes. Most of the risks we face as a jurisdiction are not local but emanate mainly from outside Malta. I can assure you that we are on top of any such risks and dealing with them through the right channels with clearly articulated initiatives.
Remote gaming brings with it many ethical and moral issues, how do you respond to these justified concerns?
Consumer protection is key for us. To obtain a licence from the MGA, an operator needs to adhere to a number of consumer protection and responsible gaming requirements. Education is critical in ensuring that consumers play responsibly. The vast majority of people play responsibly and see gaming as a form of entertainment.
There are unfortunately a small percentage of people who gamble excessively and enter the realm of problem gambling. The latter category of gamblers needs to be tackled professionally by specially trained people. The Responsible Gaming Foundation, which was launched last year, has been set up to address such situations.
Malta has been the target of money laundering operations and some remote gaming companies have been investigated for their role. How do you ensure that such activities are curtailed?
Effective supervision and monitoring of the sector helps to minimise such risks. Furthermore, continuous improvements in our compliance activities and investment in cutting edge information systems improves the robustness of our supervisory mechanisms.
Are you happy with diligence procedures in place?
Yes. Having said that, we continuously keep our processes under review to optimise our governance mechanisms including our on-boarding process.
Looking at the next five years, how do you see this sector developing?
The sector is set to keep on growing but not necessarily at the same pace of previous years. This is because we have most of the biggest names in the industry already established in Malta. I envisage more consolidation and M&A activities in the market going forward. Furthermore, I believe that Malta can be the hub of adjacent activities to remote gaming such as IT development, game design, payments processing and back office activities. My vision is for Malta to be the “Silicon Valley” of remote gaming and our strategy is based on that.