12 Dec 2016
Dr Joseph F. Borg LL.D, Senior Advisor and Dr Samuel Gauci LL.D, Senior Associate of WH Partners answer some of those tough questions and give us their insights on new trends in the igaming industry.
Our legal framework is deemed to be well rounded when it comes to the regulation of online gaming in general. Do you think that such a ‘superior’ position to other jurisdictions can last for a long period of time? What major changes do you envisage could occur within the next 5 years?
Given that Malta was the first jurisdiction to regulate the remote gaming industry put us in a position where we understood the industry before other jurisdictions and we have since built the required skills and expertise to service this industry. These are elements which will continue to give Malta that edge over other jurisdictions because an operator can find in Malta all that is required to help it operate in a professional and compliant manner irrespective of which country such operator is licensed in.
The Remote Gaming Regulations have been tried and tested and mirrored in legislation throughout Europe which is testament that it is a successful framework. However it is now time to upgrade our legislation in order to adapt it to the lessons that Malta, through the Malta Gaming Authority (MGA) and all the stakeholders, has learnt. We need to simplify processes for licensees and remove requirements which may be superfluous and add little or no extra value to achieve the regulatory aims of the MGA.
New technologies and business models must be embraced to ensure that Malta remains at the forefront in the regulation of remote gaming in Europe by favouring innovation while ensuring high levels of player protection.
All this is important considering the fragmented legislative framework which has evolved in Europe and which will not change into a European Union harmonised position any time soon, if ever. Such a situation necessitates that Malta ensures that it adopts a risk based approach to regulating which also takes into consideration the multiplied and differentiated compliance requirements that operators face in today’s legal landscape.
Corporate tax and Maltese tax framework is often scrutinised by the EU institutions and more recently by the UN. Would an overhaul in the taxing framework in order to be more akin to other EU jurisdictions harm the gaming industry?
We must start from the position that it is important to continue to ensure that Malta remains competitive. The Maltese tax framework is one of the factors that has contributed to attracting existing operators and therefore ensuring that we remain competitive will keep the current operators in Malta whilst also attracting other operators and start-ups.
Malta has its unique characteristics and realities which are not encountered by other EU Member States hence it would be difficult for a harmonised tax framework to cater and address the realities of all Member States. Malta needs to safeguard the structure that it has legally established whilst continuing to keep an open and positive dialogue with its fellow Member States on this matter.
Since the industry is considered to be ‘big’ in Malta, do you think that more academic programmes should be set up in order to maintain the workforce and ensure that they possess the necessary skills and knowledge?
Developing skills is always something which should be invested in, irrespective of the industry. It is becoming extremely difficult for gaming operators to find qualified skilled workers locally. It is therefore no surprise that a substantial number of people working in the gaming industry are foreigners, even though this industry has been a reality of our economy for over ten years. This is still a positive aspect for the economy as the relocation of highly qualified persons to Malta generates a significant ripple effect. However this is also an indication that we require more investment in our academic institutions to develop the necessary skill sets.
The industry requires more technical and IT professionals who specialise in cloud computing, games development, mobile and web technology as well as in Fintech and blockchain technology. These can be addressed with specific courses in these areas.
We also however need to instil certain skills in our students which will help them adapt to the requirements of today’s working environment. Students, amongst other skills, need to be accustomed to being efficient time and project managers, to be analytical, to work within a team and to be technology savvy.
This would be beneficial not only for the industry itself, who would have a better choice of skilled candidates for their roles, but also for future generations who could be employed in an industry which is innovative and rewarding.
This is also an essential piece of the puzzle in making sure that Malta remains competitive.
Fantasy sports games have surged in popularity over the past few years. What do you think has caused this?
Fantasy sports generally attracts a different kind of consumer from the traditional players that participate in casino games and fixed odds betting. Furthermore, we are seeing an interesting shift to games which have an element of skill involved in the game.
Fantasy sports, although similar in certain aspects to sports-betting, is a skill based game which requires the player to be more informed and knowledgeable of the game he is participating in. This element of skill is attracting players to fantasy sports games because it gives players who are attracted to such games greater satisfaction and a bigger entertainment factor. One must keep in mind that fantasy sports is usually more popular with sports fans and usually those that participate in fantasy sports are extremely knowledgeable about their favourite sports.
Since fantasy sports is played against other players, possibly also amongst friends, there is also an element of bragging rights between them which adds to the fun-factor of the game.
What are your concerns (if any) with regards to the MGA’s recent stance that fantasy gaming activity is not a licensable activity?
The current MGA position is of a temporary nature which will be changed once the Skill Games Regulations are enacted. These regulations are currently going through the European Commission’s TRIS notification process for review by the European Commission and the Member States. Once the compulsory stand-still period lapses, the government will be in a position to enact these regulations into legislation.
Fantasy sports will fall within the remit of these regulations since they are a game of skill. Malta is to be commended for taking the initiative to review and understand the nature of fantasy sports in order to confirm that fantasy sports is a game of skill and will be the first jurisdiction to adopt this position in legislation.
Operators of skill games are of a different nature to operators of games of chance and currently operators of games of chance do not cater for skill games as well in their portfolio of games. This however is a situation which could change in the future given that skill games is a market which is constantly growing in popularity.
The regulation of skill games, whereby the specific requirements of such games are addressed, has the potential of being another niche market which will attract operators to Malta to benefit from the knowledge and skills available here.