The formula leading to success in the iGaming industry

Capstone Advisory’s Kris Baron recently addressed the MiGS 2012 seminar at the Hilton Malta and spoke about how the Gaming Unit within Capstone is ideally backed with the right legal expertise and human resource experience to assist clients in the gaming industry who are interested in setting up operations in Malta. In this interview he explains more about Capstone Advisory’s services and the gaming industry in general.

How long has your Gaming Unit been set up and what led your group to set up this unit?

The Gaming Unit within Capstone Advisory Co. Ltd has been set up since the inception of the company in 2010. As a former Financial and Compliance Auditor at the Lotteries and Gaming Authority I have gained considerable experience and knowledge about the dynamics of a gaming operation, and at the time considering the healthy regulatory set up in Malta and the financial incentives in place, it did not take much to acknowledge the potential for growth of such an industry. Our company now boasts a fully fledged gaming unit offering various services to clients such as the handling of all regulatory aspects of the licence application process, the drafting of documents to meet LGA requirements, key official services, corporate services, advisory, accounting,and also through Fenech Farrugia Fiott Legal Legal we now also offer legal services to our clients.

How do you personally view the local igaming industry?

The local igaming industry is experiencing a boom uplifted by the regulatory and financial incentives that have been put in place by the government. This, coupled with the dedication, skills and technological expertise offered by Maltese workers,has put Malta in pole position in the igaming scene. Malta currently hosts over 240 remote gaming licences and the number of applicants is ever growing. Despite the initial discouragement that operators may have felt by the Maltese licencing process, many are now relocating to Malta as they are recognising the benefits of the stringent conditions and periodical checks and audits carried out by the Lotteries and Gaming Authority in Malta which offer foreign jurisdictions and their respective authorities a degree of comfort when dealing with Maltese licenced operators.

What in your opinion are Malta’s strengths in this sector?

Without a shadow of a doubt the formula leading to the success of the igaming industry is composed of three vital ingredients:

Firstly,the ability and eagerness of the Maltese authorities to develop the igaming industry, together with the authority’s flexibility to adapt to market changes has created a healthy and attractive regulatory environment which has lured operators from other jurisdictions into Malta.

The participation and endorsement of the Lotteries and Gaming Authority of MiGS is evidence of the benefits offered by the Maltese jurisdiction to gaming operators.

Secondly, the optimally balanced overall costs applying to Malta based and licensed operators has been a huge driver of our economy. Gaming taxes may vary depending on the gaming licence class one holds however one can rest assured that our taxes are amongst the most competitive. In addition to gaming taxes, the beneficial tax regime in place in Malta has been a compelling factor for many companies to set up here or even re-domicile. Moreover, the full imputation system used in Malta means that the dividends will not be taxed again once received by shareholders.

Lastly, since salaries in Malta are lower than in other igaming jurisdictions this envisages a reduction in operational costs for gaming operators based in Malta.

You recently addressed the MiGS 2012 igaming seminar held in Malta. What are your observations following this event?

These kinds of activities enable stakeholders to remain abreast of the latest developments in igaming and enhance business relationships amongst operators and service providers who have a product to offer to the igaming industry.

The success of yet another MIGS seminar demonstrates the willingness of individuals and companies to invest in the igaming industry. It was an opportunity to gain a first-hand insight of the latest technological developments, to discuss the latest trends and share best practices, and an opportunity to address representatives of the Lotteries and Gaming Authority. Challenges surrounding the gaming industry were presented and discussed while a number of speakers made resounding recommendations to gaming operators to unite and make their voice heard in the parliamentary process of relevant laws and regulations. The harmony achieved between the authorities in Malta and the business community is proof of why Malta is an outstanding jurisdiction.

In your opinion, is the local igaming sector still flourishing or is it approaching a saturation point?

In my opinion the igaming sector in Malta is moving from strength to strength with the number of licencees operating under a Maltese Licence rising year after year. Moreover, the number of persons resident in Malta engaged in the industry has more than doubled over the past four years evidencing that gaming operators are not solely operating under a Maltese licence from overseas but rather also set up shop locally using local workforce. The technical ability of the local employees and their understanding of the gaming industry have placed Malta as a global hub for igaming, leaving many other jurisdictions astounded by the country’s success and wanting to adopt Malta’s approach as a model for their jurisdiction.

Malta’s jurisdiction has been described as a very sound and straightforward one especially when it comes to setting up or relocation of igaming companies in Malta. What do you feel are the aspects that still need to be polished in order to serve the industry better?

In my opinion, for as long as the MFSA, the Registry of Companies and the LGA maintain a positive approach to the igaming industry in Malta, more and more companies will continue to apply for a Maltese licence or even relocate to Malta to benefit from the incentives that characterise the success of the professional services industry in Malta.