Regulation: friend or foe?
The Regulation Conference brings talks on the new Gaming Act and Gaming Law
by Gerald Fenech
The role of regulation in economic growth has become a central point of discussion. The emergence of blockchain and crypto currencies has brought this topic back on the agenda with many discussing the need for regulation or actually the need for no-regulation. The remote gaming sector is another of those sectors that has received mixed treatment by regulators with some countries banning and some embracing it, like Malta.
To discuss the element of regulation, we caught up with JP Fabri, an economist and Director at ARQ Group who heads both the Digital Economy and Economic Advisory Units. JP has acted as a Technical Consultant to various governments of small island states round the world on building economic resilience through good governance. Ahead of his participation at SiGMA , JP said that “regulation is a cornerstone for economic growth and development and it is only by embracing regulation, designing effective laws and ensuring the right supporting infrastructures that countries like Malta truly prosper.”
Speaking about the gaming sector, JP spoke about the first-mover advantage that Malta enjoys and guarded so well,”the new regulatory regime that came into force early this year shows that the Malta Gaming Authority is in-tune with the latest trends of the industry and being proactive in ushering a new era for the sector. It is thanks to the foresight that the Authority has always had that the sector was able to contributed close to 20% to Malta’s GDP over the past five years. This is no mean feat considering that growth averaged 8.5% between 2012 and 2017.”
When asked about the sandbox environment that the Malta Gaming Authority launched, JP remarked that “sandbox environments are increasingly become popular amongst authorities in both advanced economies and in emerging economies. Over 20 authorities have created regulatory sandboxes only in the last few years and have acted as catalysts to innovation and to new FinTech companies that have introduced significant innovations and benefits to consumers around the world. It is therefore a very positive step forward by the MGA to enact the sandbox and I do believe that other regulators, particularly the MFSA will follow suit if we truly want an innovative FinTech sector to develop.”
Commenting on the future of the sectors, JP believed that both remote gaming and nascent blockchain sectors face numerous challenges which include the constant need of new specialised talent and also the stabilisation of rents in Malta which can damage the island’s attractiveness. JP added that, “ecosystems are not only based on regulations but they very much exist on supporting infrastructure including Human Resources, infrastructural carrying capacity, a deep and integrated financial system and an effective enforcement element which safeguards the reputation of the jurisdiction.”
Looking ahead, JP expressed his optimism that the Maltese authorities and regulators will continue driving forward Malta’s regulatory innovation and through constant consultation with industry representatives, authorities will be able to remain a step ahead of the curve. His parting statement, “success should never lead to complacency,” is food for thought.
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