Editorial | Sunday, 25 October 2009

Bookmark and Share

Fairness in regulation

The ongoing debate about the new gaming regulations has been largely played out in the House of Representatives as a discussion on whether the proliferation of gaming halls – a creation of this very government – has soiled community life to the extent that it now necessitates radical pruning.
The finance minister, recently outed for having accepted a freebie trip aboard the private jet of a businessman involved in the casino industry, has declared himself “a committed Christian” who believes gambling is “intrinsically wrong”. At face value, this is careless talk from Tonio Fenech, whose ministry is the architect of favourable tax regimes for the gaming industry, particularly the online gaming phenomenon.
The reality is that the Maltese economy will rake in over €40 million in gaming licences and taxes this year – a figure that does not take into consideration the millions poured back into the economy by the population of ex-pats working in the online gaming business. If the Maltese islands are to remain a safe bet for the gaming industry, the finance minister should approach the gaming debate (and that of his ministerial conduct) with less confessional zeal.
There is no doubt that community life should not be threatened by the proliferation of these establishments. Residents irked by the mushrooming of gaming shops, which replaced corner stores over the past two years, are justified in being worried over seeing shops sprouting next to schools or quiet residential pockets. So there is a credible argument for the zoning of such business.
But this is not the only issue at stake. This particular sector is now of the impression that the government’s prospective amendments to the gaming law could be a prelude to putting them out of business. Their indignation is particularly justified, because it was this very government that created the legal and technological architecture for them to set up business – even encouraging them through fiscal incentives.
The transition from simple gaming machines to what are now known as video lottery terminals (VLTs) was an opportunity to regulate gaming halls and their owners, by hooking them to a central system so as to be monitored by the Lotteries and Gaming Authority.
However, between 2007 until the abrupt closure of the gaming halls in June this year, the gaming regulator neglected a crucial part of its remit. The authority was expected to issue licences that would set out the conditions – spelt out in Schedule 5 of the gaming law – for the operators of these gaming halls. Applications for the licences from operators were received at the authority, but never processed. In the meantime, operators were still allowed to set up shop simply by applying for a trading licence and a MEPA permit. Clearly, this apparent free-for-all was blessed by the government.
Now the gaming hall sector is fearing that it is about to be inflicted with new and more onerous licence conditions, that could effectively throw them out of business. The gravest insult is the fact that they were encouraged to invest in VLTs, costing thousands of euros each, by being offered a discount on their registration fee on each machine. This so as to ensure faster compliance to the new regime.
The operators fear that higher registration fees on each gaming machine they own, a limit on the machines inside their halls, and restricted opening times (unlike the after-hours licences owned by casinos), will make it impossible for them to carry on their business. They claim that they will be unable to recoup their investment and repay commercial loans.
Arguably, there is a case here for ensuring a level-playing field for the gaming sector. Without going into the merits of the new gaming laws, isn’t the finance minister keen on ensuring the fair application of free market principles for this industry, while respecting residents’ rights to be shielded from the vice of gaming? Does this exercise have to happen at the expense of a business community that was, in the first place, encouraged by the government to make its transition to the VLT gaming hall?
With the gaming halls now firmly shut since June, it is all too clear that revenues have been diverted to the casino business.
And in the light of the ongoing tender competition for the Dragonara casino, perceptions of impropriety have been fuelled by Tonio Fenech’s freebie aboard the private jet of George Fenech, whose company is tendering for the casino.
So it’s not the crusade to clean out gambling halls that we should be all worried about. It is the spirit of fair play, both in politics and in the management of the economy, that we should be losing sleep over.

Any comments?
If you wish your comments to be published in our Letters pages please click button below.
Please write a contact number and a postal address where you may be contacted.



Download MaltaToday Sunday issue front page in pdf file format

All the interviews from Reporter on MaltaToday's YouTube channel.


Copyright © MediaToday Co. Ltd, Vjal ir-Rihan, San Gwann SGN 9016, Malta, Europe
Managing editor Saviour Balzan | Tel. ++356 21382741 | Fax: ++356 21385075 | Email