Issue link: https://maltatoday.uberflip.com/i/1233417
09.04.2020 9 INTERVIEW How has the iGaming industry in Malta been impacted by COVID-19 and the measures put in place by the government to limits the spread of the virus? e biggest impact on the industry hasn't come because of the govern- ment-imposed measures. Rather, iGa- ming has been most strongly affected by the fact that sport events around the world have been cancelled, and consequently sports betting has all but ceased. is has not had the same de- gree of impact on all gaming operators, because some are more exposed to the sharp drop in sports betting. For those dependent on sports betting, the im- pact has been dramatic. If we take a closer look at online gam- ing products such as poker and esports, the majority of such services are net- work/software based. ese are still functioning because gaming industry employees are working from home in- stead of at the office, and companies offering these products can therefore continue to operate. Since the gaming industry is fundamentally a tech in- dustry, it is very flexible from the per- spective of remote working. Almost all companies which provide these kinds of services have migrated their operations from working at the office to working almost 100% remotely. A few compa- nies have kept their office open and are allowing employees to come to work while observing social distancing. ere are however also live casinos which rely on physical dealers. e three main live casino operators in Mal- ta are Evolution Gaming, NetEnt and Portomaso. Between them they employ around 1,000 people. Currently, the government has not imposed a total lockdown, so these employees are still able to go to work. Should a lockdown be imposed, however, this would mean that staff would be prevented from go- ing to work, and products which re- quire physical dealers, such as live ca- sino, would not be able to operate. In this regard, we are holding discussions with the government to ensure such a scenario does not materialise, or, if a lockdown is imposed, that we mitigate the repercussions as much as possible. Several measures have been put in place in gaming studios to protect employees and ensure businesses continuity. In the past year, the iGaming industry has contributed to over 13% of Malta's GDP. What do you predict in terms of whether gaming's contribution to the economy will decrease in 2020 due to COVID-19? If we focus on Malta, I envisage the following dynamic: overall, the coun- try's GDP will go down. Revenue earned by gaming companies in Malta will also be slightly down, but not by much, be- cause the local industry's overall expo- sure to sports betting is lower than that of other countries. In light of this, I ex- pect the industry's contribution to GDP to grow. Other major contributors, such as tourism, will decrease. Construction won't increase its share of GDP, because of the uncertainty which currently ex- ists. erefore, overall revenue from the gaming sector will decrease slightly, but the percentage share of the industry in terms of the country's GDP will rise. On a global perspective, the situation is different. In countries like the UK, for instance, sports booking is very im- portant, and all the big players, such as William Hill, have issued warnings in this regard. So, it's a very different pic- ture than Malta. ey are much more exposed to the fact that sports events are all cancelled, and their revenue will decrease dramatically. e Spring Edi- tion of the Online Gambling Quarterly reported that 66% of industry insiders in Europe believe their total revenues will decrease because of COVID-19, and 96% expect a considerable decrease in betting revenues. e majority (38%) said they believed revenues would be down by over 50%. Many businesses in Malta have had trouble retaining their employees. How are gaming companies geared up for this scenario? A small number of employees in the gaming sector have been made redun- dant, but, by and large, most employees have been retained by their respective companies. Of those which have been let go, some have already found new jobs, and it is expected that the rest will find employment quite quickly. Before the COVID-19 outbreak started, there were around 700 vacancies in gaming, locally. With the current slowdown, one can imagine that half of these positions will be put on hold, but there are still hundreds of unfilled vacancies. is is because the demand for qualified staff remains, since there is a significant skills gap in Malta. erefore, I expect the 20 or 30 employees which have been let go to find another job very quickly. The interest in online gaming services appears to be on the increase since people are stuck indoors and are looking for entertainment on the internet. Is this trend real? Is it translating into any meaningful increase in revenue for the industry? Since sport events have been can- celled, sports betting players are explor- ing other avenues and gaming products, be they virtual sports, esports, live casi- no, poker, and so on. Players who usu- ally participate in sports bets are trying these new products instead. But, since they are new to such games, there is a learning curve, and these players are in an exploration phase so they're not spending as much as they used to pre- viously when betting on football teams, for instance. is means that, while new registrations for such online games has increased, it hasn't yet translated into a rise in revenue for companies. In recent comments to BusinessToday, you said that most iGaming foreign professionals working in Malta had chosen to not leave the island in view of COVID-19. With this considered, and considering all other economic factors, do you think the iGaming industry can quickly get back on its feet once this pandemic has passed? Yes, I am positive it can get back on its feet. At the same time, I'm aware this situation will have an impact on the economy. Whether it will trigger a worldwide recession depends on how long the situation lasts. e industry will bounce back, however. Overall, the sector has taken a hit, but some areas, specifically anything to do with on- line gaming, are doing relatively well. I expect these areas to become even stronger going forward. In this sense, what is happening now will likely have some lasting effects on people in terms of their gaming behaviour. I would also like to highlight how flexible and resil- ient software and hi-tech industries are – and online gaming is a hi-tech indus- try. We are very fast and agile, and this is a strength. iGen chairman Enrico Bradamante gives us the low-down on how COVID-19 is impacting the gaming industry 'Gaming's share of GDP could increase post-coronavirus'