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Same Game, new rules

eGaming Review talks to industry expert Alan Alden, Director of Contact Advisory Services Ltd about how operators can keep up to date with changing regulations and his view on how they will impact business.

 

eGaming Review (eGR): How has regulation for the egaming industry changed most significantly in the past 12 months?

 

Alan Alden (AA): In March 2011, Legal Notice 90 came into force which amended the Remote Gaming Regulation. There were some basic changes such as increase in annual licence fee to €8,500, and in gaming taxes from €1,165 to €1,200 per month which were expected. The most interesting change though is the fact that a Class 4 licensee (an operator that provides hosting and management of a gaming system) can accept, as a partner, any operator holding a licence in another EEA/EU jurisdiction.

 

This change demonstrates Malta’s commitment to assisting operators in formulating B2B relationships and is also a sign, in my opinion, that Malta accepts other licences in other jurisdictions. Unfortunately, not all jurisdictions will accept a Maltese licence. We still have to see how successful this measure has been and only time will tell. But as usual Malta is first in taking such a step and maybe, as they copied us before, they will copy us again. Apart from the legislative changes in recent months the authority has changes it’s licensing process in an effort to process them more efficiently. There was a lot of criticism about the length of time it took to process an application procedure. Furthermore, the authority has taken the necessary steps to increase manpower in order to clear the backlog. We have seen a marked improvement in this area over the past few months.

 

(eGR): How does Contact Advisory Services Ltd manage to stand out in such a competitive market?

 

(AA): Contact is made up of individuals whose combined experience in the egaming industry is second to none. The focus of our company is on egaming and unlike a number of other competitors we do not serve various industries together with egaming. Consequently, our customers recognise our commitment to, and our knowledge of the industry. We keep in constant communication with the authority and with other specialised service providers, such as data centres and payment gateways, and can provide our clients with anything they need.

 

But I believe that we owe our success to our client base and trusted business partners we are prous to say that most of our new customers come from referrals made by our existing clients or business partners. We are known for our knowledge, dedication and value for money services. We have experience working with various business models and requirements and can assists applicants for a licence or existing licensees in various areas of operation. People recognise this, appreciate it and reward us by referring us.

 

(eGR): How has the growing success of smartphones and tablet devices changed how fraud and payment protection is managed?

 

(AA): IN all honesty, I have never given it much thought, though I do not think that these new technologies change anything in the area of fraud and payment protection. A non-face to face transaction is always risky for the business irrelevant of which device is used to connect. Sure, IP address and so would probably facilitate or enhance fraud management. When the application for the smartphone is developed these things, from what I have seen, are taken into consideration and secure transmission of data is a key requirement.

 

(eGR): What testing services do you offer?

 

(AA): Contact Advisory Services through Kyte Consultants Ltd can review any gaming system with the exception of the Random Number Generator and identify any regulatory shortcomings or security weaknesses. All our staff are trained and certified IT auditors, and Kyte is also the only Qualified Security Assessor company in Malta validated by the major card brands to carry out compliance audits related to Payment Card Industry Data Security Standards. We can therefore test any entity that processes, stores or transmits credit card data and if they are fully compliant we can certify them on behalf of the PCI Security Council which represents the major card brands. We also can carry out data protection audits to ensure that a company us complying with the legislative requirements, including that the technical and organisational controls in place are sufficient for the type of personal data they handle.

 

(eGR): Are changing gaming appetities/player patterns affecting the services you offer?

 

(AA): The services we offer are not affected by player patterns or gaming appetities. What we have seen is a rise in the number of new ideas and concepts reaching our mail box. The customers come to us for a number of reasons, the main one being to understand whether their new concept is licensable or not. Thorough understanding of the concept and of the law is required for us to provide an answer and even then we normally recommend that we send in a proposal to the authority before commencing the licensing process. It has made life more interesting for us and we especially enjoy these types of projects. The customers are also very proud and protective of their ideas and keen to get them going. Unfortunately, although some brilliant ideas have been put forward, funding is sometimes an issue and the projects never take off. Another change is that the operators now all want to offer as much as players. In these cases we are requested to either provide contracts of possible partners and/or to assist them in obtaining the required licences.

 

(eGR): In terms of jurisdictions, which ones are currently facing the biggest challenges/going through the biggest changes?

 

(AA): In the EU at the moment there is a lot going on in relation to online gaming. It is quite evident from the laws put forward to the EU for approval that the intention is not to liberalise but to protect their monopolies. The EU is not accepting these laws but the member states are going ahead and ignoring the EU. In my opinion, it is the operators and the players that are facing the biggest challenges.

The operators do not want to have 27 licences but unwillingly apply for licences in the jurisdictions with a large player database so as not to lose out, but the cost are crippling. Players are being limited in choice and price as only large operators can apply for licenses. Furthermore, new ideas cannot be developed and start ups will stop if the current trend carries on. Players, especially those that enjoy peer-to-peer games such as poker and bingo cannot play with anyone other than their own nationals! I hope that someone see the light and online gaming does not become a pawn in the hands of tax collectors!

 

(eGR): What can you see the next 12 months holding for egaming industry?

 

(AA): Well, it all depends on the EU member states and how they act or react. The industry is here to stay, and is growing. The EU is not the only market out there and operators know that on the internet there are no borders. Therefore, operators keep coming for licences and start ups continue to try their luck in this industry. We always fear the worst, however, businessmen are risk takers and those that wait to see what is going to happen fall behind, and you can’t do that in this industry as it is very dynamic. We also have to see the responses to the Green Paper whose consultation period closed on 31 July. As of today we do not know how many responses there were or what the response were about. I know for sure that the Malta Remote Gaming Council, Contact Advisory Services and Kyte Consultants Ltd submitted responses that were against the concept of National Authorisation, or 27 licences! We know that the wheels of the EU turn very slowly so I believe that it will be a while before something concrete happens. Let’s hope that the Single Market for Services cry eventually prevails.

 

Prepared by Alan Alden Director of Contact Advisory Services Ltd

Featured in Jurisdictions Report 2011

 

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