GPWA Times Magazine - Issue 32 - June 2015

The future of iGaming in Malta O ver the course of the last 10 years, no country has been identified with the online gaming industry more than Malta. The tiny island nation is the smallest member of the European Union, yet it has become one of the most influential and re- spected licensing jurisdictions for online gaming. Malta regulates hundreds of gam- ing operators, including Betfair, William Hill, Bonnier Gaming and Unibet. As new jurisdictions begin to regulate online gam- ing, they frequently consult Malta or for- mer Maltese regulators before launching. But as the regulatory landscape in Europe shifts from recognizing any EU or EEA license to country-by-country regulation, Malta's place — along with other offshore jurisdictions — is being threatened. On a trip to Malta late last year, GPWA Editor-in-chief Vin Narayanan sat down with Cybergaming Consultants CEO Tony Axisa to discuss how Malta be- gan regulating online gaming, some is- sues facing online gaming right now and Malta's future in the online gaming indus- try. Axisa is a key figure in Malta's online gaming industry. He co-authored Malta's original remote gaming legislation, which provides the regulatory framework for the nation's online gaming industry, and was the legal and enforcement director of the Lotteries and Gaming Authority of Malta (LGA). Now, he provides advice to online gaming operators as a consultant. The population of Malta is slightly over 400,000. That’s really small. So how did Malta become iGaming central? In 2001, Malta had the online betting of- fices regulations. Under that regulatory regime, it attracted most of the traditional U.K. bookies. So you would find that most of them had a Malta license at that point in time. WilliamHill, Blue Square — some other companies that weren’t U.K. book- ies, such as Expekt, Unibet — all had a Malta license. What happened after that was that the U.K. government, presumably not very happy that bookies who were more English than the Queen had left the U.K. to come to Malta, gave them the golden handshake. You come back, you don’t pay taxes — really and truly. Overnight, all of them disappeared, with very few excep- tions. Expekt stayed, and until recently Expekt still held Malta licenses. Unibet stayed, and Unibet is still in Malta, but the others disappeared. In 2004, Malta made a second cyberspace venture, so to speak, and published the re- mote gaming regulations. You helped write them, right? Yes. At that time, I was at the lottery au- thority. And Malta was the first European member state to publish specific regula- tions for the remote gaming industry. It was a novel concept. The regulatory re- gime was innovative in more ways than one. In 2001, we spoke about online bet- ting offices. Remote gaming regulations were technology neutral. We didn’t bother to say, "we’re happy to give you a license if you take telephone betting," or "we’re only happy to give you a license if you’re online." It was very important at the time that we came up with the technology neu- tral concept. Because you didn’t know where the industry was going to evolve? Yeah. That’s why the regulations were called the remote gaming regulations, as opposed to online gaming regulations. The concept was then taken up by sev- eral other jurisdictions. We’ve seen other jurisdictions, most notably the U.K., who made their regulatory regimes technol- ogy neutral. Let’s keep in mind that in 2004, the (online) gaming industry was still in its infancy. The first real online casino gaming software was only de- ployed in 1998. So in 2004, by and large, the online gaming industry was still a cottage industry. I think the industry was affected by the idea that finally there was a jurisdiction, and most importantly, a new member state, that (wasn't) saying, "we’re happy to take your money, but we will never li- cense you," (or) "we want to regulate you, but we will never tell you how we’re go- ing to regulate you." The future of iGaming in Malta