Issue link: https://maltatoday.uberflip.com/i/820803
maltatoday, SUNDAY, 7 MAY 2017 16 News Malta gaming industry leaders unfazed by Swedish incursion MATTHEW VELLA A shot across the bow. At least, it is how one industry insider describes the latest move by the Swedish government seeking to capitalise on the success built by Scandina- vian firms who sought out Malta's licensing jurisdiction and set up one of the island's major service industries. A Swedish governmental inquiry has proposed in a new report that the country's regulated gambling firms should be allowed to offer online casino gambling to their customers, in an effort to increase competition in the industry. The report calls for the creation of a licensing system which would allow gambling operators to ap- ply for licences for specific areas of casino gaming. It also proposes allowing Swedish casino opera- tors to offer online casino gaming, something which is prohibited un- der monopoly rules. State-owned casino Svenska Spel have already expressed an interest in adding online casino gaming to its casino offering, with many other firms tipped to follow suit should the proposed system be im- plemented. Today Sweden's online gaming market is dominated by overseas firms like Bet365, Unibet and Bets- son. According to media consul- tancy Mediavision, an average of between 200,000 and 230,000 gamblers are using these casinos every month. Many of them also have a Malta presence: Betsson alone employs 1,800 – at least 1,000 in Malta at its headquarters at the Ta' Xbiex waterfront – a place that offers a glimpse into a world of work that offers new val- ues, team-building holidays, and better salaries. While Sweden's current laws give Svenska Spel a monopoly over online gambling, which laws have been declared to be in violation of EU treaty law, companies like Unibet spend more on advertis- ing in Sweden than Svenska Spel. If the government accepts the report's conclusions, the Swed- ish Gambling Authority will gain the authority to issue licences to operators such as Bet365, Unibet and PokerStars with licence fees that will range from $6,600 to $77,000, annual fees from $3,300 to $110,000, and gambling taxes set at 18% of gross gaming revenue. That is still not as competitive as Malta, with its maximum €8,500 annual licence fee and remote gaming tax capped at €466,000 per licensee and just 0.5% of gross amount of bets for a remote fixed- odds betting licence. At least for now, it seems that Malta's gaming leaders can study well what is about to happen and plan their next move. "This is a new proposal by the Swedish government, and there is still a long process to be carried out," says George Debrincat, who chairs Malta's Remote Gaming Council, the industry body repre- senting gaming companies. "The gaming industry wants to operate in regulated markets where clear guidelines exist, since regulated markets protect the con- sumer and set a base for competi- tion which provides the best ser- vice and prices to the consumers. The MRGC is aware of these new proposals, but the industry is not bound by geographical borders, and this means that, companies which have a licence issued by other countries, can still continue to operate from Malta." This alone suggests that the Maltese framework for gaming companies derives its strength not just from its licensing body. Today's gaming companies enjoy low fees and generous tax advan- tages, and Malta's low inflation levels have enabled them to keep high salary increases at bay. This has allowed gaming companies to employ Scandinavians at lower, if competitive salaries in Malta, who in turn are attracted to the island's quality of life. PokerStars, which offers the larg- est online poker cardroom in the world, operates from both the Isle of Man and Malta, with other sup- port offices in other locations. Eric Hollreiser, Vice President Corpo- rate Communications, says that the company remains fully com- mitted to its Malta base. "PokerStars welcomes the on- line gaming legislation that has been proposed in Sweden. We are strong supporters of smart and sensible legislation that protects consumers, promotes regulatory oversight and provides choice. We are fully committed to our opera- tion in Malta, which is a key office with hundreds of employees from which we operate the PokerStars EU licence across much of Eu- rope." Christian Sammut, the chair of Gaming Malta, which is the Mal- tese government's investment promotion arm for the gaming in- dustry, is also cautious about this warning shot from Sweden. With an industry that benefits from a lack of EU harmonisation, Malta has profited from what he de- scribes "an articulated patchwork of gaming national rules which dif- fer from one country to the next, from the prohibitive to the more liberal systems." "We monitor jurisdictional de- velopments from a gaming per- spective and gauge our competi- tiveness and outreach thereafter. It is too early to comment on this upcoming development and one would have to analyse the legal framework being proposed once it gets notified under the required European process and whether it respects European law." The reason behind Malta's suc- cess in this industry today is per- haps illustrated in a 'national package' of technology, human resources, and licensing and taxa- tion rules that have turned the is- land into the primary jurisdiction of establishment for gaming com- panies. Sammut dubs it "second to none" and that Sweden's baby steps into opening its market, will not bring forth a new gold rush. "The opening up of a new juris- diction would not be the catalyst for a company or operator to re- locate his operations to this new jurisdiction, unless that operator is totally and solely facing this single market," Sammut says. In fact, he adds, it won't just be an open mar- ket in Sweden that will entice an operator to relocate their business. "They may still opt to service their newly licensed operations in and from Malta in view of the single market principles and free- doms, together with all the incen- tives Malta offers… Envisaging an adverse impact of sorts would be very premature at this stage." Debrincat adds that the Maltese industry carries out a regular anal- ysis of the country's laws and the added value of the sector's invest- ment. "The remote gaming indus- try represents over 12% in gross domestic product… Malta should not be afraid to raise awareness of its regulatory framework and the risk based ongoing compliance ef- forts undertaken to address legiti- mate policy concerns. "I am sure you appreciate that although we are involved in busi- ness of odds, no one knows what the future holds. The best war- ranty against companies moving out is to ensure that Malta remains competitive and the best place for companies to establish themselves successfully." George Debrincat Christian Sammut