Joseph Borg has recently had an article published in the eGaming Review Malta Report 2015. Joseph explains why Malta’s gaming industry needs to act quickly to survive the next stage of online gaming evolution.
Malta has established itself as a pioneer in online gaming, becoming the largest online gaming jurisdiction in Europe and one of the largest in the world. It was the first member state of the EU to regulate online gaming in 2004. While other countries were debating how to ban online gaming in order to protect their local gaming monopolies, Malta was busy drafting new regulations and setting up the necessary framework to regulate this new phenomenon in a positive and forward looking manner.
In 2015, many other EU member states seem to have caught up and although the Maltese remote gaming regulatory regime is still relevant, it is undeniable that we have come at a crossroad – innovate or die.
The strong point of remote gaming regulation in Malta has always been the open and futuristic approach adopted in the legal text and the way the Malta Gaming Authority (MGA) has interpreted and implemented the legislation. That said, both the current legal text and the regulatory approach are way past their expiry date. In an industry that is continuously evolving at supersonic speed, this is very dangerous. It is high time that the gaming legislation in Malta evolves to cater for the developments of this industry and the speed at which such developments are materialising.
If Malta plays its cards well, it will once regain its solitary position at the forefront of gaming regulation in Europe and beyond. In my opinion, stakeholders need to embrace change in order to take the necessary steps in the right direction.
The challenge of adapting to change
The best way to adapt to change is by seeing this as an opportunity rather than a challenge. It is easy to sit back and keep doing what one has been doing all along. It is true that sometimes one feels that by changing, there is a risk of rocking the boat. However, now that we have come to this crossroad, we need to take the bull by the horns and, rather than making changes to survive, we need to embrace change as an opportunity to re-position the Maltese jurisdiction as the most advanced and futuristic jurisdiction for gaming regulation.
To achieve this, government needs to introduce legislation to cater for convergence of technologies and the constant introduction of new business models. Current legislation is too prescriptive in certain areas. It is true that it is somewhat technology and game neutral, but the way it has been interpreted and implemented over the years has limited the scope of its neutrality. Government has to listen to the MGA’s advice and feedback from stakeholders in order to come up with the most innovative and future-proof legislative framework possible, not just for the online gaming industry but for the gaming industry as a whole. However, a change in the legislation without a change in the mentality in the way it is implemented would give minimal results.
On the other hand, the MGA needs to take a courageous step to simplify its procedures and embrace a more risk-based approach by differentiating its procedures on the basis of risk. It should avoid any duplication of controls in its processes and must make the most efficient use of its resources by directing them to what is really important and critical. While player protection has always been at the centre of the MGA’s philosophy and procedures, it is also true that the MGA has not always managed to convince fellow regulators that it is strong enough in its enforcement when it comes to the player protection. Mostly it is a matter of perception but it should certainly aim at instilling more trust in players and other jurisdictions. The MGA needs to ensure that its resources are more focussed on critical matters relating to compliance and, through experience as much as possible, use its resources to pre-empt situations that pose a threat to player protection and react in a more timely and decisive fashion.
Finally, it is also important that the industry stakeholders adapt to the change. The MGA has already announced that there is going to be a major overhaul of gaming legislation and that new regulatory procedures will be adopted. It has also announced its intention to consult with the industry every step of the way. In such case, it is crucial for industry stakeholders to take the opportunity and positively participate in any such consultation.
Steps in the right direction
The fact that the MGA is consulting with the industry on a more formal and structured manner, is certainly a step in right direction. Over the past few months the MGA has also published a number of consultations.
In October 2014, the MGA issued a public consultation relating to cloud solutions for the gaming industry. In this consultation, the MGA has hinted at the possible regulation of cloud service providers. It has analysed and compared the risks of public vs private cloud solutions, and it laid a distinction between ‘critical components’ and other ‘non-critical’ components of the gaming system.
A couple of months later, the MGA published a consultation document relating to digital games with prize. In this consultation process, the MGA enquired with interested parties whether they would be interested in obtaining licences for games that are predominantly based on the skill of the player, in which a prize can be won. Interested parties were also asked as to what level of regulation they would expect and what they feel should fall under the definition of ‘game of skill’.
In April 2015, the Government of Malta also published the Cruise Casino Regulations that allow cruise liners to obtain an approval by the MGA to be able to operate their on-board casinos while berthed in Malta or while cruising in Maltese territorial waters.
Another positive step taken by the MGA was the announcement of a number of quick wins towards the end of 2014, which included the streamlining of several procedures and requirements which did not require legislative intervention. The industry is still waiting, however, for further quick wins that can be implemented by the MGA to simplify procedures, decrease unnecessary bureaucracy and to adopt the principle of non-duplication of controls under the current legislation as much as possible.
These are interesting times for the Maltese gaming industry and all stakeholders are looking forward to the next steps to be taken by the government and the MGA. The hope for the industry stakeholders is that government and the MGA will achieve a workable and reputable regulatory framework that will allow them to do their business without undue hindrances and as efficiently as possible.
The ultimate aim of the government and the MGA is to strike the right balance between maintaining and, if possible, lifting the jurisdiction’s reputation, raising the bar with respect to player protection and at the same time, providing the ideal environment for operators to operate with minimal bureaucracy and under an efficient and innovative regulatory framework.