Gaming CEOs warn high rent costs risk damaging gaming industry’s edge

The high rent costs in Malta are making it hard for the gaming sector to maintain its jurisdictional competitiveness, industry insiders have warned.

A number of gaming companies’ CEOs have stressed that, if the Maltese gaming industry is to remain sustainable, the high rents issue has to be dealt with.

The CEOs formed part of a discussion panel at an iGaming Next conference earlier this week about the future of the industry in Malta, with the subject of rent prices dominating the debate.

Betsson Group CEO Jesper Svensson, who was on the panel, told BusinessToday on Wednesday that the industry was very concerned that the island’s increased cost of living, mainly driven by higher rent costs, was putting a burden on the salary levels required for their employees.

This, he underlined, was making it less viable to scale up operations locally.

“The price of rent has increased significantly since we started operating from Malta in 2004, which means that the cost of living for our employees has gone up at a fast rate,” Svensson said, “At Betsson we employ 60+ nationalities, with the largest cohort being Maltese. A too high rent level risks to affect Malta’s competitiveness for scaling up further operations in Malta.”

“The island has a lot going for it – a robust gaming regulatory framework, a huge talent pool of gaming professionals, and much, much more, however the increased cost for salaries due to the higher cost of living is something that concerns us,” he emphasised.

Asked whether the government was being receptive to the industry’s concerns, Svensson said that the gaming industry representative body, iGen – which represents most of the large gaming operators in Malta, including Betsson – was one of the stakeholders which was being consulted regarding the proposed rent reform.

“I believe all involved understand that it is important that the cost of living does not increase at too high a rate,” Svensson added.

Government addressing rent challenge

When asked for a reaction to the concerns, Digital Innovation parliamentary secretary Silvio Schembri insisted that the government had been addressing the issue through the rent Bill.

“This government is not shying away from addressing the challenges the rental sector is posing, and, to that end, a reform in the sector was tabled in Parliament following a wide consultation period with all the stakeholders involved,” Schembri said.

“To date, the government is still open for dialogue and is conducting discussions with different segments of our society including gaming companies’ representatives,” he added.

The new rent laws, which still have to be approved in Parliament, would come into force in January 2020. They lay out that annual rental increases are capped at 5% and set a minimum residential lease term of one year. They also establish a system of tax credits for landlords who give long-term contracts, and make it obligatory for all rent contracts to be registered.

The Malta Gaming Authority, whose view on the matter was requested by this newspaper, said that, as a regulator of the gaming industry, it was not within its remit to be directly involved on such an issue.

It acknowledged, however that discussions about the problem between the industry and the government were ongoing.

“As the Regulator we do not get involved in discussions related to rent laws,” an MGA spokesperson said.  

“Our role is to make sure that companies in possession of an MGA licence are compliant with the laws and regulations governing this industry.

This said, we are aware that through the industry representative associations, this area was discussed with GamingMalta, and suggestions were put forward to the respective government entities,” the spokesperson said.