Cementing Malta’s future AS THE DEFINITIVE GLOBAL iGAMING HUB
Malta’s reputation as the centre for iGaming in Europe shows no signs of waning and, according to Dr Deborah Vella, Client Relationship Manager and Head of Business Development at E&S Group, the future seems bright for those involved. Timothy Vella catches up with Dr Vella to find out where Malta’s iGaming sector is heading and what to expect in the years to come.
The European market is the largest for the iGaming industry and Malta is at the forefront of the pack, proving itself, time and again, to be among the best locations for gaming companies to establish themselves. With a gross gaming revenue of €16.5 billion in Europe, expected to rise to a staggering €24.9 billion by 2020, the market is experiencing rapid growth. As Head of Business Development at E&S Group, Dr Deborah Vella believes that, by preparing for the future, companies can secure their interests for the long term. This includes preparing for outcomes related to Brexit, which she describes as a landmark event that will affect the iGaming industry in an unprecedented way.
“Brexit is an event that is going to have a significant impact on our gaming economy,” remarks Dr Vella. “It will result in an influx of gaming companies seeking to maintain their stakes in the treasured European market, leading to an increase in registration and relocation of foreign companies to our shores, enticed to come here because of the well-developed gaming ecosystem that Malta offers. Whereas other countries have unnecessary bureaucracy and complex licensing processes, Malta has recently enacted the Gaming Act, with improved amendments constantly enhancing the legislation, which is helping to eliminate the former and simplify the latter.”
In such a dynamic sector, flexibility is one of the biggest advantages a jurisdiction can have. “Being in constant close contact with industry players, both the relevant authorities and clients, it is easier for us to identify issues before they crop up and solve the problems which clients face. We ensure a degree of flexibility when catering to new start-ups as well as current clients in relation to adapting to new legislations or operating rules.
Employees are the building blocks of successful companies. Dr Vella highlights the importance of training and investing time in employees as well as recruiting a diverse range of knowledgeable people, to keep staff up to date with relevant developments in regulations and industries, such as the recent developments in AI and esports.
“The fact that so many global tech labs are relocating to Malta means that law firms need to be well-versed in the requirements for setting up safe and secure IT solutions to protect players. Employees must adapt and learn new IT standards and player protection requirements so that all clients can be well informed when making crucial decisions. Businesses need to be proactive so that relocation to Malta is efficient and as effortless as possible.”
Despite the iGaming sector’s success, there are areas which Dr Vella believes need improving. “Banks, both locally and on an EU level, ought to work together for common goals and diligently provide a smoother process in opening both operational and client accounts for gaming companies set up in Malta or relocating here. Adding to this, the Malta Gaming Authority (MGA) should continue to address certain improvements, such as ancillary service providers, ensuring that Malta remains an attractive jurisdiction for innovation.
Furthermore, rather than relying on technical experts from foreign jurisdictions, Dr Vella believes that, if the University of Malta and other educational institutions were to increase the number of courses they offer relevant to this field, a larger workforce of technically-versed local employees would help the industry retain its roots here in Malta. While the academic education of such employees is of utmost importance, practical, work-related experience and hands-on in-house training, conducted by large companies aimed at tackling the skills gap, is also a must.
“The rise of the gaming industry in Malta has been an indisputable success. The introduction of the mentioned Gaming Act set new requirements for Anti-Money Laundering and Counter Funding of Terrorism (AML/CFT) standards. This shift to a risk-based approach has made the regulators’ supervision more efficient, creating a more secure environment,” Dr Vella asserts.” Furthermore, the upcoming introduction of the fifth European Union AML Directive, in January 2020, will bring about further changes to the industry, increasing the compliance of gaming companies. The fact that, adding to all this, Malta has a sandbox in place for DLT and crypto technologies allows for an unprecedented level of innovation testing, leading to an environment which promotes future technological development within this sector.
Dr Vella adds that Malta’s reputation as a reliable destination for various forms of gaming will continue to grow, “provided we make the process easier for clients. This can be done by identifying problems and using innovative technologies to come up with solutions.
Improvements to the degree of flexibility regarding administrative requirements for gaming companies are, of course, welcome but what degree of protection can individual players themselves expect? Dr Vella lists a multitude of options available to them. “The MGA is putting into place a new self-exclusion system for players, which gives them the power to block themselves from all Malta-licensed iGaming operators. While these tools are already offered by operators licensed with the MGA, this is the first time that a unified system with upgraded protection will be available. In fact, we look towards the future with the vision of a unified self-exclusion system across all of Europe.
Players will benefit from disclosure requirements on all pages on licence holder websites, as well as increased transparency measures such as a requirement to clearly display company links to organisations that aid persons with gambling problems on the gaming websites. “Changes to these websites and their agreements are fundamental to the protection of players,” says Dr Vella, “and the terms and conditions must be fair according to the Consumer Affairs Act, accessible at all times and any changes must be expressly agreed to beforehand.
Players will also be able to see any commissions or fees charged to their accounts, which the business operating the service must include, and their balance and currency must always be visible. “This degree of visibility of player options and transparency is unprecedented in this sector.
With the introduction of the second phase of the MFSA’s new regulatory sandbox, gaming companies may now test other innovative methods of payment. The regulatory sandbox intertwines the gaming industry with blockchain technology, envisaging a merger between the two industries in the future to create a far more secure system.
The businesses which have been and are still relocating to Malta today are the best pick of the bunch among all gaming businesses in the world, ensuring long-term success in a jurisdiction which has created the right framework for them to thrive,” she says. “While it is certainly a possibility that the regulators will become more stringent in setting up policies and procedures, operators and developers who truly have this business at heart will push themselves to reach and surpass these targets. I really do believe that not only will the iGaming sector grow even more in the coming years, but it will grow at a rate as yet unseen.”
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