Since the hay-day of casinos in the 1960s and 1970s, colossal amounts of money were made by those investors who capitalised on the vulnerability of gamblers.
Many gaming pundits believe that most people find themselves weakest when provoked with the idea of leaving their own fate to chance. It is accepted by many that no other earthly pleasure provides the same thrill as betting.
Due to much tighter regulation, the industry has undergone drastic changes over the past years. The name of the game is no longer to speculate on people’s weaknesses, but rather to be responsible in offering a form of entertainment which people tend to find very attractive. The gaming industry is becoming fairer on the whole, as investors are now making less profit, albeit still generating very acceptable turnovers.
Results are in fact very healthy, and locally, the gaming industry is currently on a growth curve. Even during these times of uncertainty, iGaming investment in Malta kept increasing. There are now over 330 gaming licensees in an industry employing about 2,500 handsomely salaried staff. According to a number of retailers, many foreigners working in this field have an unusually high spending power – especially when it comes to consumer products and services, thus contributing substantially to the local economy and the national fiscal system. In public, government may have conveniently downplayed its success in attracting gaming investors to Malta – possibly due to moralistic reasons. What is sure is that we cannot afford losing any income derived from this booming industry. We will be revealing more details on this particular phenomenon in next week’s edition.
With foreign iGaming companies being most prominent among gaming licensees, there is no doubt that government must strive to ensure that this level of investment is retained, and possibly even increased. Unfortunately, it cannot do this by just offering favourable tax rates to remote gaming licensees. We have seen governments in ‘competing’ countries discount their tax rates to gaming firms before, leading to mass relocation from Malta. It took time until a healthy portfolio of companies was reestablished, and this experience made us realise that attracting gaming firms to Malta by entering into cut-throat competition is shortsighted and unsustainable. The secret seems to lie in progressive legislation and competent regulation.
As flawed as the Lotteries and Gaming Authority may be, there is no doubt that Malta has built an international reputation for being one of the most convenient countries in which to headquarter an internet gaming operation.
We must however ensure that this reputation is kept. How we are going to do this remains a mystery in the face of recent embarrassing government undertakings. Investors were first given the blessing to open gaming arcades, but these were closed down shortly afterwards - when mass proliferation of such outlets had already taken place. The finance minister is now proposing a tall order of fresh rules which will make the situation even more unfair for any gaming business involved.
Social justice is of paramount importance, granted, but it was up to the relevant authorities to see to such requirements before allowing private enterprises to throw away their money in projects which could have otherwise been very lucrative.
How the realities of land-based gaming arcades and remote gaming companies are related is very simple. First off, the two sectors are regulated by the same authority, and antics such as the ones displayed when the police went round closing betting shops do not usually go down well with foreign investors.
Also, if rules will be tightened so much for land-based gaming operators, will the Finance Minister not consider doing the same for remote gaming licensees? Will Malta discriminate against land-based betting shops in order to protect foreign investors?
For instance, if the finance minister’s proposal to increase the age limit of betting shops to 25 goes through, it would be unfair to keep an age limit of 18 for those gaming websites hosted in Malta. But if age limits are pushed to 25 for remote gaming too, there is no question that licensees will consider moving their operation to other countries where authorities are more sensitive to their needs.
It has never been easy to keep a healthy balance between responsible gaming and money-making, but even if so, it seems that we have been so far successful in controlling abuse while offering a healthy climate to foreign investors. If we are keen on keeping up this level of performance, we must ensure that our usual bulldozer style of politics is no longer applied to such vulnerable industries as gaming.
