Posts

SiGMA meets with Hon. Jose Herrera

When asked whether he thinks that Malta can lay claim to the title of the Silicon Valley of remote gaming, the Hon. Dr. Herrera starts off by reminding how Malta established itself a major player in the industry in just fifteen years, partly thanks to its competitiveness in offering the type of financial services remote gaming companies seek.

The basis of Malta’s success can be found in the quality of the human resources available locally. In fact, the gaming the industry employs approx. 8,000 people, not counting the variety of secondary services used by gaming companies, including marketing and data hosting. The effect this has on the Maltese economy is significant. Gaming contributes to 10% of the GDP, two-thirds of which is accounted for by remote gaming.

Moreover, the igaming industry injects more than €50 million annually to the national coffers through direct taxation. The Hon. Dr Herrera reassures companies and potential investors that Malta takes the needs of the igaming industry very seriously. There are currently discussions underway between the LGA and the industry on the possibility of setting up an Academy of Gaming, which will provide specialised training courses in igaming to supply the industry with the skilled workforce it requires.

Besides investing in the local workforce, the Maltese government intends to set up Gaming Malta, an organisation tasked exclusively with the mission of promoting Malta abroad as an igaming hub and attract quality investment to the islands. Its objectives will be focused exclusively on promoting the igaming industry in Malta and encouraging more companies to establish themselves in this country.

The Hon. Dr Herrera emphasises that Gaming Malta will not impinge on the regulatory aspect of the business, an aspect which will remain firmly within the LGA’s scope. The two institutions will therefore complement each other, and igaming companies will be able to benefit from more personalised attention to their needs. This situation parallels what has already been done very successfully with Malta Enterprise, which focuses on attracting foreign business, and the Malta Financial Services Authority (MFSA) which regulates the sector. In the course of the interview, the Hon.

Dr Herrera also touched upon the role of the Responsible Gaming Foundation. This institution has two main scopes: to help various NGOs in Malta using funds donated by gaming companies, and also to embark on education campaigns that raise awareness about illegal gambling and help vulnerable people who are who are addicted to gambling. Furthermore, during the past months The LGA has initiated a number of consultations with the industry in order to identify and address a number of key priority areas warranting special focus. These include amongst others, the administrative collaboration with other gaming jurisdictions, tackling cross-border regulatory & operational challenges, the development of policy in consonance with other related sectors (e.g. ICT, communications), evolving social considerations in regulatory practices, fraud prevention, consumer protection and fighting match fixing in sports are to be actively pursued.

To this effect the LGA has embarked on a reformist strategic exercise identifying key objectives and policy updates for the coming years in order to propose to the Maltese Government a number of initiatives which primarily include a new regulatory framework to be launched in 2015. This new framework is intended to revamp and consolidate all gaming activities under one law. The need to overhaul and consolidate the gaming regulatory regime in Malta is long overdue when one considers the developments which took place over the last decade particularly in consumer demands, technology and the broader regulatory landscape globally.

Therefore, the consolidation, restructuring and re-scoping of the Maltese gaming regulation is expected to give both the LGA and the operators more legal certainty, consistency, and clarity. It will also modernise the Maltese gaming regulatory framework to a model which is growth focused, innovative and cutting edge. Malta’s success as a gaming hub is attributed to a number of factors which make Malta a distinctive gaming jurisdiction of international status. The package of incentives includes a robust ICT infrastructure, an English speaking population, a strong education system and a regulatory framework that focuses on consumer protection, fairness of games, strict compliance and the prevention of money laundering and other crimes.

The remote gaming industry in Malta has a bright future ahead and should maintain a positive growth trend through the efforts by the present government, together with the Lotteries and Gaming Authority and the private industry. When asked if he thinks that Malta still has potential to grow its reach in the igaming market or whether a saturation point is imminent, the Hon. Dr Herrera replied that there is still a lot of scope for expansion left and that an outreach program has been set up to entice more investors from Asia and South America to move their operations to Malta.

Ultimately, Malta has to be a leading force in finding innovative solutions to present and future challenges facing the industry. The Hon. Dr Herrera is positive that this is already the case and, thanks to the local political consensus on the importance of the igaming industry, Malta’s success story has far from reached a conclusion yet.

The shift to VAT taxation at the point of consumption

Global tax policy and trends are seeing a focus on digital supplies and a drive toward ensuring appropriate taxation at the point of consumption. In the area of indirect taxation, specifically, VAT, the drive toward taxation at the place of consumption will culminate into a significant change for digital supplies consumed within the EU effective as of 1 January 2015. This date will mark the entry into force of changes to the taxation of electronically supplied services within the European Union, which were announced back in 2008 (Directive 2008/8). This change, which will essentially complete the transition to taxation in the country of consumption, will impact the VAT liability of cross-border supplies of electronically supplied services, which, by definition, include online gambling games and games of chance.

Today, EU B2C supplies of electronic services are treated for VAT purposes as supplied in the country in which the supplier is established, therefore the VAT rules and rates applicable in the country of the operator determines the VAT treatment of such supplies, irrespective of the location of their customer. An exception to this rule currently applies to electronic services when supplied to EU consumers by non- EU suppliers, who are required to charge and collect VAT in the country of their customer.

As of 1 January 2015, electronic services supplied by EU and non-EU operators alike to private consumers within the EU will become taxable in the country where the consumer is located. This means that the VAT treatment of the relevant electronic services in the country of the supplier will no longer be relevant, and suppliers of these services, wherever located, will in principle have to charge VAT at the rate applicable in the Member State of consumption, unless an exemption applies in that Member State. To a Malta-based online gambling operator having customers across the EU, this means a shift from a VAT exemption on ‘sales’ to potentially VAT (at different VAT rates) for the same service in any one or more of the 27 other Member States. Whilst in terms of the EC VAT Directive, an exemption applies to gambling and betting activities, Member States are permitted to apply such limitations and conditions to the exemption as they deem fit. A review of the VAT treatment of online as they deem fit. A review of the VAT treatment of online gambling and betting activities across the EU has shown that not all Member States apply an outright VAT exemption for online gambling and betting, with certain (limited) Member States levying VAT on most categories of online gambling and betting.

Whilst the term “Electronically Supplied Services” may appear obvious and self-explanatory, as in all things VAT, interpretations may vary from one Member State to another, and such a variation may prove to be the first, and definitely not the last, of the issues which cross-border operators may face when adapting to the 2015 changes. The existing and proposed draft legislation does contain definitions of the terms however, these are non-exhaustive, and in particular in the case of electronically supplied services, leave room for varying interpretations. The current definition expressly brings within the scope of ‘electronically supplied services’, services relating to gambling games and games of chance. Notwithstanding the drive toward the harmonisation of interpretations across the EU Member States, whether any or all categories of online betting and gambling would classify as an electronically supplied service in a given EU Member State, ultimately depends upon the interpretation applied by that Member State.

For online gambling and betting operators, the 2015 changes will require an assessment as to whether their activities classify as electronically supplied services in the EU markets within which they operate as well as the VAT treatment in those Member States. If VAT is chargeable on services supplied to players in a given Member State, the question of the ‘taxable base’ arises, one which may not be straightforward, given the difficulty in identifying the ‘turnover’ derived from such activities. Once again, this may vary from Member State to Member State, since ultimately it is the rules and practices in force in the country of consumption which would apply.

The 2015 changes will render a number of factors, which are currently possibly only considered relevant by operators from a commercial perspective, relevant, if not to say key, from a VAT perspective. In the context of overall VAT exposure, the changes could, for certain markets, impact pricing and margins. From an operational perspective, service providers will need to identify where their players are located, specifically where the customer has his “permanent address 0r usually resides”. The EU Commission has proposed legislative provisions which provide guidance on the criteria to be followed when determining a customer’s location, and the proposed provisions also list evidentiary details which may be relied upon for the purposes of determining the customer’s location, such as bank details or an IP address.

The administrative issues resulting from the 2015 changes are not inconsequential, the foremost being the obligation to register for VAT in the EU Member State where the supply takes place. No threshold has been introduced, which means that one single taxable (and not exempt) supply to a consumer in another Member State, even if that supply is of negligible value, would trigger the obligation to charge and collect VAT there, and to comply with local invoicing and reporting requirements. The potential administrative burden that multiple VAT registrations would bring about, is addressed by the introduction of the so-called Mini One Stop Shop, an optional scheme which permits B2C suppliers of electronically supplied services within the EU to register for VAT in one EU Member State and to report and pay all of the EU VAT charged and collected in one single Return which will be submitted to the Member State of registration. The Member State of registration will then distribute the VAT received to the various EU Member States of consumption. Notwithstanding the simplified reporting option, VAT compliance will take on an entirely new dimension, and the added administrative burden, and resulting cost, cannot be avoided.

The EU legislative framework for the 2015 changes to the VAT rules is, for the most part, in place, and Member States should now already have their Mini One Stop Shop system up and running (by October 2014). Of course, the practical issues and considerations will only come to the fore as and when the legislation enters into force and operators begin to

The 2015 changes to the VAT rules invariably add a completely new dimension to the VAT reality currently enjoyed by Malta-based online gambling operators (and those established in other EU jurisdictions). Whilst these changes will essentially extend, to EU-based operators, the rules which have already applied to non-EU operators for a number of years, the new legislation and guidance concerning the compliance system and the audit process is expected to result in an enhanced level of monitoring of supplies of electronic services to EU consumers, with a view to collecting any VAT due thereon, thus arguably rendering the 2015 changes to the VAT rules for electronic services equally as relevant to non-EU operators.

Dr. Sarah Aquilina is a Senior Manager, specialising in indirect tax at Deloitte Malta [saquilina@deloitte.com.mt]. For further information on the 2015 changes to the VAT rules visit http://www.deloitte.com/mt/vat2015.

Re-inventing Malta’s Remote Gaming Industry: MGA

By Mr. Joseph Cuschieri, Executive Chairman, MGA

The remote gaming industry is one of the most dynamic economic sectors in the world, generating billions in revenue for the operators quite apart from the multiplier effect it creates in other sectors servicing this industry.

As far back as 2004, Malta was the first country in Europe to identify the potential of this lucrative industry and enact the appropriate legislative framework in order to position Malta as a leading global player in remote gaming regulation. With the regulatory and financial incentives in place, the portfolio of companies setting up their operations in Malta started to grow at a fast pace and today the Malta Gaming Authority (MGA) hosts a remote gaming industry which directly contributes 8% of GDP, employs more than 8,000 people and its direct and indirect economic benefits have created a multiplier effect impacting many businesses like for example property, ICT services, hospitality and corporate services amongst others.

Malta’s huge success is underpinned by a package of incentives and hygiene factors which when put together make Malta a unique gaming jurisdiction of international repute. The Malta package includes key elements such as corporate and personal tax incentives, a robust ICT infrastructure, an English speaking population, a strong educational system and a regulatory framework which focuses on consumer protection, strict compliance and the prevention of money laundering. In fact, other European jurisdictions have looked at Malta as their role model when developing their national legal frameworks for remote gaming. More than 250 remote gaming companies and 400 licenses are currently on the MGA’s books and the numbers keep growing steadily.

But what got us here won’t get us there and past successes are not a guarantee for the future. In order for Malta to stay at the top of the game, we need to innovate and re-think our strategy in a much more challenging and competitive environment. We need to rethink what Malta as a gaming jurisdiction stands for. What makes us different from the rest of the jurisdictions? What do we need to do to future proof ourselves for the next decade? To this effect, the MGA is currently undergoing a broad reform exercise targeting the way it operates, its organisational structures, processes, positioning, IT infrastructure but also the recalibration of its long term strategy so that Malta’s position as a gaming jurisdiction is consolidated and the sector keeps growing at a steady pace.

Our current legislative framework is in the process of undergoing a major overhaul in order to put in place a new legal framework which is innovative, cutting edge, growth focused and one which raises the bar in consumer protection, innovation and technology. Furthermore, the MGA is evaluating entry into new geographical markets such as Asia and Latin America where Malta can be positioned as the gaming jurisdiction of choice. The regulatory scope of gaming shall also be widened as well to include other forms of remote gaming licensing like social and digital games of skill with prize. This will ensure that Malta taps this growing market globally. Another key initiative which we will be launching soon is the setting up of Gaming Malta.

The latter will consist of an independent foundation tasked with promoting Malta as a gaming jurisdiction internationally. This move will separate the promotional activities from the regulatory function of the Authority. In the area of human resource development and knowledge, we are working on the setting up of a new Gaming Academy with the aim of building the necessary skill sets required for the gaming industry both land based and remote. This institution will have the necessary educational accreditation and partnerships to become a centre of excellence in training and development for the gaming industry. Our management ethos is based on the continuous engagement with all stakeholders to make sure that our decisions and strategic initiatives are grounded on evidence, performance, research and quality information. Our ultimate objective is to make Malta the most respected jurisdiction of choice for the gaming industry globally. The latter can only be achieved through the creation of a unique eco system which differentiates Malta from the rest whereby all the players in the industry can develop, grow and sustain their businesses within a serious and transparent regulatory environment.

I and the entire team at the MGA are very excited by the future. We have the drive and resolve to make a difference and future proof Malta’s gaming industry for the next decade.

Gaming Bonanza for Malta at ICE 2015

As anticipated, ICE 2015 was a big success, exceeding a strong 25,000 delegate participation, with hundreds of exhibitors focusing on both land-based and online gaming.

The Malta Gaming Authority (MGA) participated in the annual ICE Gaming Expo 2015, which was held between 3 and 5 February, 2015, at the London Excel Expo Centre. Exec Chairman Joseph Cuschieri received the Gaming Intelligence Award after being listed as one of the Hot 50 Backstage Heroes for 2015, merely one year into his tenure as the chief regulator of Malta’s gaming industry.

In the words of Gaming Intelligence, “He (Mr. Cuschieri) has had a huge impact since being appointed as Executive Chairman in 2013. He has impressed both employees and licensees in equal measure. Some of his key achievements included cutting licensing time and player support time by 50%. He has instituted the Responsible Gaming Foundation and is set to follow that with a new Gaming Academy. He is hell bent on making the regulator the very best it can be on every single level.”

Throught the same days Bit8 had the opportunity to unveil a commercial and strategic partnership agreement with Intralot. In the words Bit8 CEO, Angelo Dalli, “Bit8 is pleased to be entering into a global alliance with the INTRALOT Group, enabling us to provide our solutions in more than 50 countries worldwide. Our solutions and innovative technology will benefit from the years of experience and global reach of INTRALOT, giving us an exceptional combination of technical excellence combined with customer service expertise. This alliance is in line with achieving our vision of having the industry’s best online gaming platform, across multiple product and channel verticals.”

The MGA’s stand, which was prominently set on two-levels, featured the Authority’s new logo and brand. Around 550 companies from 60 countries displayed their products and future innovations at ICE 2015, in an event which attracts thousands of people from all over the world.

Political parties in Malta towing same igaming line

The Leader of the Opposition and the PN Simon Busuttil spoke highly of the strong reputation that Malta built in the gaming sector with good laws that operate as a key factor behind the success of this industry.

The gaming sector was discussed during a visit which the Leader of the Opposition made at the headquarters of the company Maltco in Lija, where he was welcomed by CEO Ioannis Katakis.

Busuttil said that over the years, Malta has managed to build a positive international reputation in the field of gaming. Malta implemented legislation to combat serious illegal betting. In this context, Simon Busuttil talked about the importance of strong legislation, even in the social context.

The Leader of the Opposition went on to elaborate that in recent years, the field of online betting has developed into one of the important sectors for the local economy, attracting a large number of foreign companies.

In this sector, said Simon Busuttil, Malta managed to win against fierce, international competition. This was also due to the ability of workers of Maltese to adapt to the industry needs. He concluded that in the European Union, Malta will continue to defend the online gaming sector to remain a leader in the industry.

Note – similarly, in a recent interview with SiGMA, Betsson CEO Ulrik Bengtsson, whose company employs over 800 people in Malta, argued that the political stability is a determining factor for gaming companies like Betsson.

Economy minister, MGA exec chairman visit Betclic

Minister for the Economy, Investment and Small Business, Dr Chris Cardona and the Executive Chairman for the Malta Gaming Authority, Joseph Cuschieri, recently paid a visit to the offices of the online gaming Operator ‘Betclic Everest Group’ in Sliema. The delegation was welcomed by the Group’s CEO, Ms Isabelle Andrѐs.

Betclic Everest Group is a European online gaming site operating a wide range of on-line gaming offers in more than 20 countries. It has a unique portfolio comprising of five diverse and complementary international brands, namely, Betclic, bet-at-home.com, Everest, Expekt and Monte Carlo Casino. Betclic Everest Group is owned equally by two European entertainment operators: Lov Group and La Société des Bains de Mer.

betclick image

 

Addressing all those present during the visit, Ms. Andres welcomed and thanked the Maltese Government and the Malta Gaming Authority for their visit and the support the Group has received locally. The group recently relocated all its trading and finance activities from Gibraltar to Malta, following an intensive period of consultation. This decision has also led to an increase in jobs here in Malta, which is now one of the Group’s largest office locations. Ms. Andres said, “Betclic Everest Group is delighted to be licensed in Malta and is committed in furthering its good business relationship with the Malta Gaming Authority”.

“These jobs reflect the Government’s proactive approach at creating new and better jobs.” said Minister Chris Cardona. “It is always encouraging to see the continuous investment from reputable international companies like the Betclic Everest Group in Malta. The Government is committed to supporting the gaming industry in order to keep up the pace of competition and continue attracting foreign direct investment to Malta.”

Joseph Cuschieri, added that having established itself as a major player in the iGaming field, Malta will continue to deliver innovative solutions to address present and future challenges faced by the industry. “The iGaming sector has proven to be very beneficial to Malta in terms of value add, quality of labour and additional business services,” he added

Image and article source: www.mga.org.mt

From LGA to MGA: Authority rebrands itself

The Lotteries and Gaming Authority has engaged in a re-branding exercise, reflecting “the Authority’s heritage, past successes, vision and values within the national agenda and in line with our strategic objectives”. Executive Chairman Joseph Cuschieri went on to elaborate that Malta is a pioneer in the remote gaming industry, hosting some of the world’s biggest operators and hailed as one of the top jurisdictions worldwide.

The launch of the Authority’s new brand was held under the auspices of Economy Minister, Dr Chris Cardona and Dr José Herrera, Parliamentary Secretary for Competitiveness. The event also saw the launch of the MGA’s new intuitive website at www.mga.org.mt, with a new, fresh look and feel as well as a stronger, more regular presence on social media platforms Twitter, LinkedIn and Facebook.

Hon. Silvio Schembri

Member of Maltese Parliament Hon. Silvio Schembri has been appointed Parliamentary Secretary for Digital Economy, Financial Services and Innovation. Before, he served as Chairman of the Responsible Gaming Foundation, an independent institution which was set up earlier this year with the aim of educating, assisting and preventing negative effects related to gambling.

Silvio Schembri has a Master’s degree in economy and teaches at the University of Malta on part time basis. He was a founding member and general manager of the Gal Xlokk Foundation, one of three Maltese registered action groups under the Leader program of the EU Common Agricultural Policy.

Schembri was President of the PULSE movement and president of the Students’ Council at the Junior College, p.r.o of the GWU Youths’ Section and Education Secretary at the Luqa Labour Party Local Committee. Silvio contested the local council elections for Luqa on the Labour Party ticket, where at the age of 18, he became Malta’s youngest councillor.

Relive the highlights from our last show and stay tuned for this year’s SiGMA. Watch out for what we’re branding as the ‘iGaming Village’ this year.

Are you an operator looking for top affiliates? Are you a top affiliate looking for a nice treat with like-minded affiliates playing at the same level?