Johann Schembri | Land-based gaming in Malta – an untapped well?

Pinnacle Gaming Group has been active in the local gaming industry since the late 2002. What changes has the company gone through in this time, and where is it today? How large is the company and what operations is it involved in?

Pinnacle Gaming Group was set up in 2002 to invest and hold shares in subsidiary operating companies. Over the years the group managed to build strong business relationships with the world leading gaming operators and technology providers including International Game Technology, Novomatic and the Lottomatica Group that incorporates GTECH Corporation and Spielo International.

In 2009, Pinnacle Gaming Group through one of its subsidiaries partnered with the Novomatic Group and successfully participated in an international call for tenders for the management and operation of the Dragonara Casino that is the leading Casino in Malta, with a 50% market share. In 2011, Pinnacle Gaming Group also partnered with GTECH in a consortium for the management and operation of the National Lottery of Malta. 

The Group is also involved in the operation of commercial bingo halls and Video Lottery Terminals (VLT's). Subsequent to the issue of the Gaming Devices Regulations (VLT's) in March 2011, the group will be operating 24 VLT outlets by November 2012 and these will increase to 32 VLT outlets by February 2013.

Today the group employs over 325 full time staff through all its subsidiaries.    

 How would you describe the current situation of the Maltese gaming industry?

Whilst I fully understand the importance given by the Authorities to the remote gaming industry, I believe that there is a lot of room for improvement in the land-based sector. 

We are still very weak in the fight against illegal gambling, until today we still have a de facto monopoly in land-based sports betting.

Our laws need to be streamlined in a way as to eliminate any discrimination between different land-based gaming operators operating in different sectors.      

In recent years, Malta became a haven for betting and gaming companies, who have relocated and started operating from Maltese shores. Has this affected the local gaming industry? How so?

Firstly, these are two distinct markets. Secondly, the remote gaming industry had very little impact, if any, on revenues generated from land based operators.

Also, another fact of life is that all land-based operators will soon have an online offering in the very near future.

 Did the emergence of online gaming and gambling games, such as poker, detract from the popularity of traditional casino venues? Has there been a drop in popularity in this regard?

Not at all. Local Casino attendance and revenues are growing year on year. However every land-based Casino feels the need of an online presence today.  

 The local gaming industry had to weather a period when there were a number of unlicensed gaming and gambling halls sprouting all over the island, which were undermining larger operators. What effect was this having on the Maltese gaming industry?

A number of temporary approvals were issued in 2007/8 to reputable operators and VLT manufacturers. Unfortunately, a number of irresponsible operators took advantage of the situation, and started operating without these approvals.

The situation became untenable and Government had to react. In fact, in August 2009 all operations, whether approved or not, were shut down until new regulations were published in March 2011.

Today, the industry is very well regulated, and the majority of operators strictly abide by the rules.

The Lotteries and Gaming Authority is aware of a number of deficiencies in these regulations, and we hope that these are addressed in the near future to secure a sustainable market in the best interest of all stakeholders.  

Complaints suggest that the new regulations have made it harder for such gambling halls to be refused licences, especially in areas where they might cause social problems. Is this the case?

The regulations are very clear in this regard. The zoning policy is very strict (as it should be), and a lot of non-compliant locations were refused a licence.

Is the current licensing environment conducive for the gaming industry to flourish?

'Flourish' is not the right word. The capital investment required to enter the market is very large.

It is important to have a balanced licensing environment to secure a sustainable industry otherwise it can very easily go underground again.

What plans does Pinnacle Gaming Group have for the future?

Our biggest priority at the moment is to fully roll out our VLT project by February 2013.

We are also working on an extension of the Dragonara Casino that host a state of the art poker area that will host major international tournaments, a sports bar, a nightclub, additional dining areas and other gaming activities.

We will also be entering the online market in 2013 and we are looking forward to the liberalisation of the sports betting market and other games.