Steve Ives | Malta must not be complacent on egaming success

When did Betfair start operating in Malta, and how did it grow to become the operation it is today? 

We launched our first product under Maltese licenses in 2005, and began to invest more heavily in our Maltese operation in 2006. We began by basing a small part of our gaming operation here. However as the benefits became clearer, we progressively migrated more and more of our products to operate under license here. In this way, we built up a substantial local operation.

What sectors is it involved in, and what services does it offer to its clients? How large is the operation?

Betfair launched the first Betting exchange and has dominated that category ever since, with over 80% market share. We now also offer the full range of e-gaming products so our customers can enjoy not just the best option for sports betting but also poker, casino, bingo and other recreational gaming experiences. We employ over 1500 staff worldwide, of which over 100 are located in our Maltese office in Santa Venera.

What is Betfair's ethos? How does it approach its services and its clients?

Betfair has always prided itself on being a leading operator in terms of responsible gaming, and also on our approach to integrity in sport.  We believe in a commercial, competitive but well-regulated industry and have often led the way in terms of working with government, sports bodies and regulators to develop a robust and pragmatic framework for the industry.

This has been as true in Malta as elsewhere, and we have great respect for the way the Maltese regulator (the LGA) has worked collaboratively in this area.

The egaming and betting industry has been described as one of Malta's success stories. Why would you say this has been the case?

Yes, undoubtedly. The foresight shown in the early 2000's to acknowledge the need for regulation in this industry set a foundation for this success. Setting up a credible structure and adapting to create the right incentives for the businesses and their staff has resulted in a substantial inflow of investment that has created many high quality local jobs. 

It that still the case? How would you describe the state of the egaming and betting industry in Malta today? 

Yes it remains the case, but it is really important not to be complacent in this respect.

Bigger European states have begun to regulate this industry and capture tax revenue and employment. This is not necessarily an either/or situation, and there remains the need for e-gaming businesses to establish hub locations and Malta remains a viable candidate. So, with sound proactive management, it can remain a successful industry for Malta.

Is the local environment suitable for the further growth of the industry?

The credibility and knowhow gained over the last decade is an important asset that can be the foundation of further growth. However, to exploit this, Malta needs to recognize the pressures that companies like Betfair face as well as the and choices available them, and constantly adapt to ensure that Malta remains attractive.

Countries such as Estonia have been described as up and comers with regard to the egaming sector as they are offering an attractive all-round deal to operators. Could this attract operators away from local shores?

Inevitably there is competition but Malta has a track record and some unique attributes that cannot easily be replicated if it continues to regulate well and implement sensible new policies.

To me, the bigger threat is not from jurisdictions like Estonia but from the larger countries that regulate their own markets and attempt to pull the investment closer to the home of the consumer.

What sort of measures would reverse this trend?

To fight the threat from the smaller hubs and larger markets, it is important that Malta seeks to work proactively with the industry to address operator concerns as more and diverse national regulations emerge. Entering into bilateral agreements with other states (both inside and outside the EU) that formally recognize the merits of Maltese licenses will be important. This can significantly reduce the overhead associated with becoming compliant in new jurisdictions by reducing the duplication across multiple regimes.

Maintaining and evolving a sensible tax structure both at the corporate and individual level will also be important. Malta has also been a staunch advocate of the industry in European and international forums, and a continuation of this will be attractive to groups that are involved in lobbying on many fronts.

Excessive bureaucracy has been described as one of the stumbling blocks that local private sector are facing. Is this felt in the egaming and betting sector?

Our experience of working with the local regulator has been very positive. We have had issues from time to time about how to get certain things achieved in good time, but we have always found the regulator and other authorities very responsive when we have raised concerns.

We hope the regulations will adapt dynamically to the emerging product and technology trends in such a way as to remain a sensible framework for consumer protection, rather than inappropriate hurdles to competiveness.

The industry has lately changed considerably, and many operators are downsizing their operations, both locally and abroad. Has Betfair been similarly been affected? 

We have reduced our scale a bit in recent months, mainly as a result of a reduction in the number of geographic markets we are addressing. But we are still committed to having a substantial operational based here in Malta for the foreseeable future.

The trend towards country-by-country regulation will inevitably put pressure on groups to consider where they employ staff, which may explain some downsizing. But I believe the net change locally has been a continuation in growth in the number of Maltese licenses and growth in employment in the sector.