Speech by Finance Minister Tonio Fenech, during the iGaming conference organised by the Chamber of Advocates in Valletta last Friday.
I am delighted to be opening this iGaming Conference.
It also gives me great satisfaction to have such an event organised by the Chamber of Advocates. This demonstrates that our government’s long-term strategy is successful and is now bearing fruit. Back in 1998 we felt that Malta should excel in various industries that would best suit our economy, size and infrastructure. We chose to take up amongst others the Remote Gaming industry.
Government’s objectives to attract remote gaming operators were not simply to generate direct revenues from taxation, but also to attract foreign direct investment and create job opportunities and high-value careers. We have managed to make Malta an attractive and quality jurisdiction, leveraging the number of assets available to us. Critically, one aspect that adds to our attractiveness is the quality services to industry provided by professional people and firms like yours.
When the Remote Gaming Regulations were published in April 2004, we were aware that by opening up the market to cyberspace gaming, we would have to face many challenges that lie ahead. However we were confident that by following socially sound principles, and with the ongoing cooperation of all parties concerned, we could overcome most obstacles and face these challenges with a high degree of success.
History has taught us that the risk of not regulating by far outweighs any other risks. A well-regulated gaming industry is our safest bet for success. We believe that the strong regulatory framework coupled with Malta’s expertise in the gaming industry has put our jurisdiction on the forefront in this industry.
The key success factors for Malta’s remote gaming industry can be summed up in three words: Reputable, Responsible and Responsive. Malta took a bold step from the outset to introduce remote gaming regulations that were far superior to any other jurisdiction in terms of strict licensing procedures, strong monitoring controls and player protection mechanism.
Regulation is imperative to protect both players and operators alike. The advantage of a licensee domiciled within a robust regulatory regime like Malta is consumer trust. As operators know full well, consumer trust can make or break a business. In a virtual environment, with intangible geographic boundaries, customers want to feel adequately safeguarded before parting with their money. Therefore our brand and the operators’ brand are intertwined and we need to protect both.
Back in 2004 when Malta became a full member of the EU, Malta was the first EU Member State to adopt specific regulations for remote gaming. The Remote Gaming Regulations, as part of the entire legislative framework, are in line with EU Directives. Malta’s membership in the EU allows us to build robust systems to monitor and supervise operations, and actively support the licensees.
Indeed since 2004 Malta has steadily built a reputation as an ideal gaming jurisdiction with European exposure. The country has reaped the rewards of a highly regulated remote gaming business and four years down the line Malta has become an enviable base for quality. Malta is continuously reaching new milestones by attracting new Tier-1 operators and start-up companies alike which undoubtedly boost the country’s foreign direct investment.
Over the past four years the Lotteries and Gaming Authority has processed over 500 applications for a remote gaming license. The industry has become a significant contributor to job creation and to date more than 4,500 works in the gaming industry: 2,300 of whom are directly employed with the remote gaming industry. This year the country will have generated €16.1 million in revenue. This means a percentage increase of 46 per cent from what the Government received in year 2007.
Allow me to end with this. We are not resting on our laurels. It is now time to move to the next level. We are undertaking a major effort to review and improve our legislative and regulatory frameworks to bring new technologies and business models within the regime. We understand that whilst it is increasingly hard to distinguish between terrestrial and iGaming, we are in the process of fleshing out a regulatory model that introduces far greater social responsibility without shackling the international aspect of operators’ licences and ventures. As we achieve greater depth in this model we will open this to public consultation. At this point it is my intention to tap your experience here and to invite you to serious discussion.
I thank you for your attention and for your commitment to this dynamic and significant industry.