Issue link: https://maltatoday.uberflip.com/i/779073
maltatoday, SUNDAY, 29 JANUARY 2017 II Gaming How would you describe the current situation of the Maltese gaming industry? The remote gaming industry is now mature and, although we are still seeing a continued interest and submissions of gaming licence applications, we are no longer witness- ing the large number of new operators applying for licences that we had in the initial years of our licensing regime. This is due to the fact that many operators are already licensed and operating in Malta and we are now seeing more consoli- dation between operators with an increasing number of merg- ers and acquisitions. This trend has however not deterred Malta's appeal as a jurisdiction which also offers the right environment for start- ups to create and launch their new and innovative products. The gaming industry finds in Malta all the services it re- quires to successfully operate its business, which is definitely still one of Malta's main attrac- tive features. The land-based industry is functioning and operating as best as possible under the current legal framework. The legislative structure currently differentiates between the vari- ous gaming channels, although they may be very similar in their nature, hence creating a situation where the opera- tors are not always operating on a level playing field. The legislative structure requires a complete review to ensure that the industry is given the possibility to further grow and innovate. The land-based in- dustry is of utmost importance, however at times we may lack to contribute to it the required importance, overshadowing it with the attention given to the remote gaming industry. This however does not mean that all is rosy and there is not more we can do. The industry is not only dependent on the gaming regulations and envi- ronment but is also affected by Malta's general infrastructure and perceptions of the jurisdic- tion. We need to continue to ensure that the country's infra- structure is upgraded whereby banking services need to be more business friendly to this well regulated market; we need to have more adequate schools for the children of the foreigners that are choosing to relocate to Malta; traffic, roads and public transport need to be improved; the perceptions and realities which lead to foreign- ers deciding on whether or not to start their business from Malta or relocate here need to be positive and more competi- tive to ensure further growth; and unnecessary bureaucracy needs to be minimised where it still reigns. What are the current land-based licences available and what is the process of applying for a land-based casino licence? The land-based gaming market is basically the physi- cal gaming outlets we have in our towns and villages. These are mainly the casinos, the national lottery points of sale, the gaming parlours and the commercial bingo halls. A person may apply for any of the above licences although there may be specific require- ments for certain operations. The licensing process is rela- tively similar for all channels of land-based operators whereby an applicant needs to satisfy the Malta Gaming Authority's ('MGA') due diligence and fit and proper requirements for the persons involved in the structure and satisfy the technical requirements. The process is very similar, if not identical, to the remote gaming licensing process. Since there is a premises involved in the licensed opera- tion, an applicant also needs to comply with applicable premises requirements which may include distances from certain establishments, recep- tion and registration desk, cctv cameras, approval of devices and limitations on the number of devices, to mention a few. What differentiates between the various licences is that prior to applying for a casino licence or a national lottery li- cence a concession is required from the Government which is usually awarded following a call for tenders. The other channels do not have such a requirement. How are the realities of land- based gaming and remote gaming related? With the evolvement of technology we are seeing more convergence of games offered online to the land- based offering. The technology has developed in a manner whereby land-based operators have introduced more IT sys- tems into their operation and into the games which have re- sulted in many similarities with the remote gaming operation. Although there are still differ- ences between the operations, we are seeing that there is more assimilation between the two operations. We see an increasing num- ber, even locally, of remote gaming operators offering live casino games by either creat- ing specific studios with live tables or by having a direct link within an operational land- based casino. More recently with the introduction and development of virtual reality we are seeing remote gaming casino operators creating a reality similar to land-based casinos where a player experi- ences, to a certain extent, the feeling of being within a land- based environment. I am positive that, with further technological advance- ment, the similarities in the games and systems used by remote gaming operators and land-based operators will continue to be streamlined. From a technology point of view it is always becoming easier for one type of operator to converge into the other and this is confirmed by more and more operators offering both a land-based offering as well as an online offering. Malta has for several years been the jurisdiction of choice for betting and gaming companies, who have relocated and started operating from Maltese shores. Has this affected the local gaming industry? And what impact has the remote gaming industry had on revenues generated by land based operators? The convergence we have witnessed globally between land-based gaming and remote gaming has inevitably had a positive impact on our land-based operators given the large number of remote gaming operators located in Malta. The local presence of the remote gaming opera- tors means that it is easier to build business relationships between the parties since they are more accessible. The land-based operators have a vast choice of games and technology available to them from the remote gaming operators established locally which increases the opportuni- ties to develop their operation and business. The large number of foreign- ers residing in Malta who are employed with remote gaming companies enjoy playing in the casinos on the island and par- ticipate in the numerous poker tournaments held in Malta. They surely contribute to the healthy number of attendees in the casinos. Poker tourna- ments held in the local casinos also benefit from tournaments played online which culminate in the final rounds being held in a physical environment and Malta and the Maltese casinos are a popular destination for such tournaments. What are your expectations for the future of the gaming industry? The Government and the MGA have been formulat- ing an overhaul of the cur- rent gaming legislation which should update and upgrade Malta's gaming framework. We should have more visibility on this throughout 2017 and this is something which we are all waiting for to clearly under- stand the direction the gaming industry will take. The overhaul is surely positive news for the Maltese regime because it should put Malta back at the forefront when it comes to the approach taken for regulating gaming. The overhaul should simplify licensing requirements and adapt to the gaming environ- ment we live in today whereby operators are required to com- ply with numerous jurisdiction- al requirements which in some shape or other try to reach the same regulatory goal. We are also seeing the regu- lation of new markets which are evolving and growing year on year, such as fantasy sports, eSports and other skill games. These new markets need to be understood and their differences to gambling need to be addressed specifi- cally to ensure that they are regulated in a manner which guarantees seriousness but allows innovation to continue to prosper. Such new niches could also have a positive ef- fect on the Maltese economy in general if they are attracted to Malta under the right condi- tions. The land-based market will also inevitably benefit from the legislative overhaul whereby the current legislation, which was enacted a number of years ago, will be substituted with legislation which is more applicable to the current and future realities of this market. We expect to see less frag- mentation between the activi- ties and hence a more stream- lined approach. We should see here the possibility of innova- tion resulting in more attractive entertainment premises. The future therefore should hold for interesting devel- opments which should see positive changes to the current situation. We must ensure that the basic and fundamental pro- tections and requirements are still addressed whilst allowing the gaming industry to further evolve the existing business and offerings and also consid- er new growing markets. We should also see start-ups from within the new markets being attracted to Malta to benefit from the complete eco-system the island offers which should help them set a solid founda- tion for future growth. We cannot forget the pos- sible move of UK gaming com- panies to Malta when and if Brexit materialises. This is an opportunity which Malta needs to monitor in order to attract any possible investment. As a final note, gaming in Malta cannot be seen in a vacuum and we must always remain alert to the discussions in the international gaming environment to understand and influence such discus- sions and to act accordingly to any changes when necessary. We must always ensure that as a jurisdiction we evolve to continue to remain competitive and attractive and this means that all stakeholders need to strategically work for the con- tinuous growth of this sector. Betting in Casinos: Malta's latest craze Samuel Gauci, senior associate at WH Partners, speaks about the state of play and future for casinos in Malta DR SAMUEL GAUCI