Watch out for iGaming liberalisation in Germany

Published on The Malta Independent¸ issue 21 August 2011

Not many people appreciate the economic contribution yielded by the iGaming industry in Malta. The island prides itself as a microcosm of Europe and as such is a good testing ground for products/concepts with an infrastructure that is generally good¸ cost-effective and constantly improving¸ particularly in the ICT sector. They say that the proof of the pudding is in the eating and the taste is first-class – Malta prides itself with over 300 active licensees. It is a proven fact that the iGaming industry is encouraged by government initiative and the state-of-the-art telecoms infrastructure that the island offers as one of the most progressive environments in the world for IT¸ remote gaming and e-Business activities.

Investment in ICT is increasing at a rapid pace. In terms of data links¸ in 2003 Vodafone Malta took a strategic decision that it must own the links from Malta right up to a central point in Europe and therefore decided to have its own submarine data cable between Malta and Sicily. Commissioned in 2004¸ this doubled the number of international data links connecting Malta to the rest of the world. With hindsight one recalls how¸ at the start of the iGaming community in 2001¸ data traffic was rather thin¸ in the order of a few tens of megabits¸ but it has grown exponentially since then. Three operators are competing to provide quality and reliable bandwidth via a submarine cable to the Italian mainland. In terms of technology¸ the fibre-optic submarine data cable remains an important – and extremely sensitive – link between Malta and the rest of the world.

Opposition spokesman on the economy Charles Mangion said that this sector has been a successful base operating out of Malta¸ generating some €50 million annually in revenue without the burden of new taxes (a low carbon footprint). Furthermore¸ he reaffirms that the sector also provides quality employment for a good number of people¸ mostly with excellent salaries .These include a mix of nationalities¸ but quite a few Maltese have also been recruited. In the iGaming sector¸ Malta has registered a gross added-value per hour of almost €36¸ the second highest in the EU. This element has made the sector competitive with other elements¸ with the potential for further development. All this is thanks to the hard working team at the Lotteries and Gaming Authority¸ which has excelled in monitoring a quality regulation.

All this has been confirmed in a recent study by Prof. Joseph Falzon of the Department of Banking and Finance at the University¸ who has produced an analysis of the productive sectors of the Maltese economy in comparison with EU member states. In his study¸ Malta ranks fifth in the group in terms of gross value added per hours worked in 2007. In all the other sectors (including financial intermediation) Malta ranks sixth. Where Malta excels is in the personal services sector¸ where we were ranked first¸ thanks to the high gross value added per hour of the e-gaming sector.

Obviously¸ one could ask if this is perhaps too good to be true: there must be a catch in such a story of unbridled success. The fact is that¸ really and truly¸ Malta needs to be vigilant in its continual effort to beat the competition. It can do this in a number of ways¸ but definitely by keeping up-to