31 Jan 6 Feb 2001
Malta Stanley Leisure Internet-based branch loses £1.4 million in half year
[ further losses expected over next two years ]
By David Lindsay
Stanley Leisure, one of the UK's top gaming groups running its Internet betting site, Stanleybet.com, out of Malta, this week announced group half year profits of £15 million sterling.
However, its off shore Internet betting business based in Malta had lost £1.4 million sterling over the period. The Malta-based business is operating from premises in Birkirkara, currently employing 21 staff, a compliment expected to be increased to 30 shortly.
Bob Wiper, Stanley Leisure chief executive explained that he expects two more years of heavy losses for its Malta institution, losing GBP3 million annually, before it breaks even.
According to Mr Wiper, the Internet attracts "a fundamentally different" type of gambler. He explains, "Our average bet in the betting shops is £5.50. The average online is £70."
Mr Wiper added that the UK reform of betting tax and further gaming deregulation could transform the industry as it stands today, adding, "Our industry could be in the dawn of a new era."
Referring to industry estimates of GBP1 billion of illegal bets being struck each year, Mr Wiper explained that the suggestion to abolish the current nine per cent deductions paid by betters would encourage people to bet more, while the move would also "remove the need to bet illegally".
The government's recently introduced e-commerce legislation is aimed at capitalising on the sector's potential. According to Finance Minister John Dalli, the Finance Ministry has taken steps to be part of e-commerce.
Minister Dalli recently explained that an initial step was the establishment of a competitive package, coupled with strong regulation and compliance procedures for companies choosing to set up a betting operation in Malta.
Betting via the Internet holds the promise of becoming one of the largest markets in the near future, with a current market turnover of over US$100 billion expected to rise to around US$700 billion by 2002.
Stanley Leisure was the first of 13 similar companies to be granted a local licence, with an further 22 in the pipeline all the more important, as a considerable number of job opportunities is expected to be created by these companies over the next two years.
The setting up of the e-commerce framework in Malta began around a year ago and, over the past 12 months, a considerable number of applications have been processed.
However, the e-commerce industry is dependent on telecommunications and if the new industry is to expand in Malta, it will have to face the challenge of removing capacity bottlenecks and providing high bandwidth infrastructure.
Another problem is the stiff tariffs in the sector locally, compared to other competing countries. However it is expected that the implementation of telecommunications liberalisation measures will lead to competitive schemes.
Stanley Leisure UK employs around 6,000 people in various sectors of the gaming and betting industry, operating 30 licensed casinos and over 600 betting shops throughout the UK