Since its establishment as a remote gambling jurisdiction in 2004, Malta has seen remarkable growth in the number of operators licensed locally and, in the last couple of years an  influx of operators licensed elsewhere in Europe including Italy, Spain, France and Denmark. Despite continuing to attract more and more gaming operators, the island must increase its influence with its European partners and other regulators in order to maintain its position as a leading remote gaming jurisdiction.  

James Scicluna talks to eGaming Review about Malta’s developments as an egaming jurisdiction
eGaming Review (eGR): How has Malta developed since it was established as a remote gambling jurisdiction in 2004?James Scicluna (JS):
There are around 400 remote gaming licences issued by the Lotteries and Gaming Authority (LGA) of Malta to circa 250 companies. Many of these companies employ a not insignificant number of staff employees on the island. In addition to LGA licensees established locally, there are also several companies established in Malta which are licensed to provide remote gaming services in other European jurisdictions. These include several licensed by the Danish Gambling Authority, AAMS in Italy, the Spanish Direccion General del Juego and a handful by the French ARJEL.
I think that this critical mass of operators in Malta continues to contribute to a significant extent to attracting more operators to the island, together with the interesting licensing and tax regimes including a special tax regime for executives in the industry who move their residence to Malta.
The industry has certainly had an important impact at a macro-economic level and has also contributed to changing the demographics of parts of the island.
eGR: How do you assess Malta’s position in view of the continued regulatory developments in Europe?
JS: I think that my answer requires some context.
To my mind it’s perfectly reasonable for countries the world-over to be concerned about the protection of the weak and vulnerable and generally of all consumers in their territories.
The issue, certainly in most European countries, lies with the manner in which the remote gaming industry is being regulated. Any idea of mutual recognition of licences similar to that which occurs in the financial services industry in Europe has been almost entirely abandoned and several European states seem to approach remote gambling more with a view to taxing operators to the limit than effectively protecting the weak and the vulnerable.
At the moment the only exceptions when it comes to recognition of licences are  Greece and the UK. Both have in place systems which recognise licences held by operators from regulators of this industry in other European states. The UK also currently recognises remote gaming licenses issued by non EU “white listed” countries.
In the UK that will change and the UK will soon adopt a national licence requirement. The Greek system  should remain in force at least until Greece rolls out a licensing system of its own.
eGR: Most readers are aware of the proposed regulatory changes in the UK, but can you tell us a bit more about the Greek system?
JS: Today a licensee of the LGA which applied with the Hellenic Gaming Commission (HGC) for its licence to be recognised in Greece can offer is services to persons in Greece. In my opinion that is a good thing and it is my understanding that this has led to increased co-operation between the LGA and the HGC.  Greece still gets its taxes and if the regulators in both countries can agree on a mutually acceptable level and means of exchange of information then perhaps they can achieve a model which the rest of Europe chose to avoid.
While gaming taxes are high in Greece, recognising Malta’s remote gaming licences means that operators are not subject to duplicate licensing and compliance requirements. The sum of all of that in other European states such as France and Germany creates a very real risk which is probably not spoken of sufficiently. The risk is that businesses in Europe will have to fold operations on particular markets and others will fill the gap from outside the European Union.
eGR: If “others from outside” filled the gap as you say wouldn’t that be unlawful?
Of course, one could argue that that would be unlawful under the laws of one or more states but in practice we know that is very hard for those states to do anything about it. It must be borne in mind that the internet has brought about access to such a wide range of choices and a new breed of consumer, much more aware and making a greater effort to obtain the best deal. The European Commission has recognised this in a number of its communications.  I would certainly not condone unlawful behaviour but I suspect that many policy makers still do not realise how unlikely it is that a consumer would willingly opt for a worse bargain when to his or her mind all he or she is doing is freely clicking away online.
eGR: So where does Malta stand in all of this?
JS: Malta remains central to the operations of several well-known remote gaming operators. First, I would say that the European Union law rights which come with holding a licence in a European Union state like Malta should not be entirely dismissed and that is irrespective of the situation which I described with Greece and the UK; second, the critical mass of operators in Malta is attractive due to availability of knowledge and manpower; third, Malta’s fiscal incentives remain interesting; fourth, a knowledge base has developed in Malta in terms of regulating and servicing the remote gaming industry which can be exported, and fifth, Malta is exposed to the same risk which other European states face which is that due to the increasingly onerous conditions of doing business around Europe, business based in Europe will fade out and that gap will be replaced by remote gaming operators in the Caribbean and Asia. If that happened I think that it would be the complete opposite of what most European states wanted when they set out to regulate this industry at a national level.
Also, my sense is that if Malta is to remain a key jurisdiction for remote gaming in the mid to longer term it must seek to increase its influence with its European Union partners, the European Institutions and to forge better bilateral and multi-lateral links with other regulators in Europe and beyond.
eGR: Do developments in the US have an impact on Malta?
JS: The recent trend to regulate remote gaming at state level in the US has an effect on the industry as a whole. To my mind it has an effect on Malta to the extent that it presents new opportunities for businesses based in Malta to form partnerships, create ventures and provide expertise to markets which are new to the provision of regulated remote gaming. At the same time these businesses can and I think ought to take a page or two out of the books of some of the leading US land based operators and machine producers which are currently leveraging their might into the online world. These US businesses have plenty of  experience working in an environment regulated across state lines, often with common or overlapping regulatory elements
The interview was published in the eGR Jurisdictions Report.