Issue link: https://maltatoday.uberflip.com/i/1171482
26.09.19 10 INTERVIEW Malta at risk of losing MASSIMO COSTA You are currently the CEO of Maverick Gaming. When was the company set up, and what services does it offer? I am Italian, but I've led a very international life and career. I have worked in the US and the UK with big multi-national com- panies like Dell and Kodak. Sev- en years ago, I joined the premi- um gaming solutions company NetENT, and this was the point when I came to Malta. For most of my career, I had been involved in the corporate side of things, but, a year and a half ago, I left NetENT and started Maverick Gaming. Maverick is an online slots producer, working in the casino game arena and cur- rently engaged primarily in the Asian market. We are, however, in discussions to implement the second phase of our plan for the company, to take the products slots to the European market. You are also the chairman of iGen. What is iGen, what are its main goals and how many companies are members? One of the other initiatives I undertook when I left NetENT was to set up iGen, a Maltese as- sociation of iGaming companies. iGen holds a general meeting six times a year – every two months. In the first meeting, all the topics for discussion are placed on the table, and in between the meet- ings I drive a number of action points, conversations and also organise other meetings, de- pending on the issue in hand. One of the topics we are discuss- ing is the rent law, but we also discuss subjects such as banking support, technical issues within the gaming industry, transport, and other common problems which gaming companies op- erating in Malta experience. In each meeting I report on what progress and developments have taken place. Last year, the gaming sector accounted for over 13% of Maltese overall economic activity, and gaming makes up a 15% share of the economy's gross value added. What makes Malta attractive as a jurisdiction for iGaming? Malta has been a pioneer when it comes to iGaming. e first legislative framework was put in place 15 years ago, and this is when the country first en- tered the gaming sphere. Since then, it has gone from strength to strength in the right direc- tion as a jurisdiction. e MGA, over the years, has improved its processes and made them more stringent, by holding operators to greater accounts and tight- ening due diligence procedures and Know Your Client (KYC) requirements. In the past decade and a half, Malta has really become a hub for iGaming. Moreover, I would argue that in the past three years, since Brexit, the relative weight of Gibraltar, the Isle of Man and Alderney – which are the other important hubs when it comes to gaming – has lessened, while that of Malta has increased. Bet365, for instance, is moving hundreds of employees to Malta, and this goes to highlight the ju- risdictions positives. I think the island now has achieved the crit- ical mass for this industry. There are, however, a number of issues which come in to play when it comes to maintaining Malta's attraction as a gaming jurisdiction. One of the issues which iGen has highlighted is the cost of renting property in Malta. At a recent gaming conference, a number of CEOs in the sector said that the high rent costs risk affecting Malta's competitive edge. How big of a threat are the rent costs? Rent costs represent a big and growing problem, with different facets. Gaming industry em- ployees have a very wide range of functions, skills sets, ages and salaries. Employees range from those who don't have degrees - who might be undertaking their first job and are in their early 20s, working in customer sup- port or as live casino dealers or copywriters – to those who have more skills and experience – such as managers or executives. e vast majority of the work- ers in the sector are, in fact, those at lower end of the scale, and these earn a modest wage. e industry's business model is such that we pay these employ- ees a fair salary for their compe- tences, and within the gaming sector they are offered high- er-than-average salaries for the type of work they do. e gaming companies feel that they are paying these em- ployees generously, however, with the salaries which they are earning, it is still very difficult for them to live in the Pembroke, St Julian's, Sliema, Gżira and Ta' Xbiex area, because their buying power has been eroded by the rising rent prices. Both private and corporate rent prices have gone through the roof, and rent inflation has far outpaced the inflation of sal- aries, even within the gaming industry. is leaves individuals who earn lower wages in the sector with two choices. e first is to move away from this area of Malta, but, once they do so, they will still have to travel to the St Julian's or surrounding areas, be- cause that is where gaming com- panies are located. is means they have to either rely on public transport – which can be improved – or on private vehicles, adding to the traffic problem. e second option is to share a two or three-bedroom apartment with others in the in- dustry. is might be a short-term solution for young or single pro- fessionals, but it is not a long- term one, because once these individuals grow older and have families, such an arrangement no longer works. Another connected issue is that there is a shortage of one-bed- room apartments in this area of the island. Seven years ago, this wasn't a major problem because the price dynamic was different, so people could afford to rent two or three-bedroom apart- ments instead of a one-bedroom flat, but this buying power has been eroded over the years. Can you give us some details of the discussions iGen is having with the Maltese government on this issue? Will the new proposed laws be enough, or is iGen proposing changes before they are approved in Parliament? e government has acknowl- edged that there is a problem with the rental market in Malta. Last year, a public consultation took place which led to the draft Bill which is being discussed at the moment. As chairman of iGen, I have been involved in this process from the public consul- tation till now, including having sat through two parliamentary sessions where each article of the law was debated. I would say that the draft Bill as it stands at the moment is positive and a step in the right direction. ere are however aspects where it can be strengthened, and I think there is a particular area which represents the big- gest issue: the increase in rent demanded from one contract period to the next. When a rent- al period comes to an end, it seems that there is no connec- tion between the previous con- tract and the new contract, with landlords requesting very, very high increases on the rent when Enrico Bradamante, iGen chairman and CEO of Maverick Gaming, tells BusinessToday Malta needs to get its act together if it is to retain its edge in the gaming industry and achieve its aspirations in the blockchain and AI markets