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EGR Magazine meets with Alan Alden to discuss why Malta remains one of the most reputable jurisdictions for operators.
The economic situation in Europe combined with a series of new gaming regulations might not make it easy for operators, however Alan Alden (Director of Kyte Consultants and Contact Advisory Services) beleives that Malta remains the best option.
eGaming Review (eGR): Why is Malta a market of choice for gaming operators?
Alan Alden (AA): Since 2000 when Malta first started accepting online sportsbook operations, there has been a demand for Maltese licenses. In 2004 when the ground breaking Remote Gaming Regulations came into force Malta started to license all products, such as Casino, Bingo, Poker, Betting Exchanges, Lotteries and other innovative games. The Maltese license quickly gained a strong reputation and demand for the Maltese license exceeded all expectations. The main problems facing operators was the lack of knowledge and expertise about the gaming industry amongst service providers, and experienced staff had to be brought in from abroad. Over the years the industry has grown and with it the number of service providers, the level of skill and knowledge of the service providers as well as the pool of human resources available to the operators. Costs for co-location and bandwidth services have tumbled and continue to drop. We are now in a situation where an operator choosing to obtain a Maltese license can find all the services and staff they require and at very competitive prices. Anything an operator needs can be found and he can pick and choose. Furthermore, the Maltese license carries with it a reputation second to none, and the taxes and fees for maintaining a license are fair allowing operators to grow, diversify and become innovative. Compliance is essential and responsible gambling taken very seriously, but the operators accept this as they know it adds value and credibility to the license.
(eGR): What services do you provide for the gaming industry?
(AA): Contact Advisory Services Ltd is a partnership between Kyte Consultants Ltd and Gaming Consulting Ltd, behind which there are Angelo Vella, Trevor Axiak and Alan Alden who have been involved in the industry since its inception in 2000. Alan was also the first reviewer (when he worked with Deloitte) appointed by the Authority and was one of the first consultants to the industry. Angelo’s experience in corporate services for the industry is second to none as he has been providing these services to some of the first Maltese licensees. Accounting for gaming is different to accounting for other industries and its extremely important that the accountants and auditors understand gaming. Trevor has also been involved in the gaming industry since 2001 where he worked with Alan at Deloitte. Alan and Trevor set up Kyte Consultants Ltd to mainly carry out certification reviews for the Authority and continue to do so.
The three partners and their growing team provide all the services required by an operator to obtain and maintain a gaming license in Malta. Contact also have contacts with a number of providers of software, co-location and bandwidth services, servers, payment solutions, etc. Contact can also provide Internal Audit Services, Legal, Data Protection services, AML/CFT training, and through Kyte they can provide PCI DSS certification as they are the only QSA company in Malta.
(eGR): Which challenges will Malta be facing in the coming months?
(AA): The recent economic upheavals have not had a major impact on the industry, however, investors have held back and will continue to hold back until the recent positive economic results become more permanent. Should the UK and other countries decide to follow Italy, France, Denmark and Spain’s path and require operators to obtain licenses we could see operators abandon the Maltese license all together or reduce their operations here. If this happens the industry could shrink but we believe that the new licenses will possibly offset the loss of existing ones. Apart from Malta, its the operators that will be facing the biggest challenges! Decisions to obtain licenses or abandon markets could be crucial and have long term positive or negative effects on operators if the right or wrong decision is taken. This is not a speculative comment but is based on what is happening at the moment.
(eGR): How do you intend to cope with those challenges at Contact Advisory Services?
(AA): Contact has grown very quickly in a couple of years, and although we do focus mainly on the gaming industry we have extended our services to non-gaming related customers. Malta has a lot to offer, not only to gaming operators, but also to other businesses and we are tapping into this too. For example we are providing corporate services to marketing companies, payment institutions, software providers and agricultural companies to mention a few. Our main focus and expertise remains in gaming, however, we do not like to have all our eggs in one basket and continue to look for opportunities. Our customers are helping us a great deal as they are our best resellers and they are bringing new business to us on a regular basis. Therefore, even if the gaming industry does suffer some major setback, we are well positioned to lessen the impact through diversification and re-positioning ourselves in the market. The number of contacts we have, business partners, skilled and knowledgeable staff, should allow us to cope with any challenges thrown at us.
(eGR): Do offshore jurisdictions such as Malta have a future as an increasing number of European regulations regulate?
(AA): Malta has come too far and the industry too big for it to disappear totally from the scene. The current trend is unsustainable for operators and will collapse. Whether it will take one year or more for the collapse to occur is hard to say. However, what is definite is that no operator is going to go for licenses in small markets as the effort and the costs are not worth it and the smaller states will in all probability choose not to require licenses. Malta will be the only option. We will get to a stage where players will start to look for ways of by-passing any intrusive controls implemented by the states and will end up playing on websites regulated in less reputable jurisdictions outside the EU and we will end up with a situation as it was before Malta decide to regulate the industry. The money will start going out of the EU, instead of staying within the EU, and everyone will lose. Maybe everyone will then come to their senses! In the meantime, Malta will continue to survive as it offers operators cost-effective options in how they can run their operations. Operators do not only need a license they need customer support, payment solutions, data centres, marketing people, accountants, software developers, etc etc and Malta can continue to provide these services to them whether they have a Maltese license or not.
Prepared by Alan Alden, Director of Contact Advisory Services
Featured in EGR Malta Report 2012
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