Under the Spotlight: Issues of Jurisdiction
The most important aspect of I-gaming companies is the jurisdiction. A Jurisdiction refers to the legal framework which gives legitimacy to the industry. As there are so many negative connotations with the industry, it is particularly important that the Jurisdiction is a seen as a serious one.
Non-US companies, which were dealing with US customers, were negatively impacted with the passing of the Unlawful Internet Gambling Enforcement Act (UIGEA) in 2006. This law made it illegal to gamble online and for companies to accept payment with respect to wagers or bets. Following the passing of this law, remote gaming companies, started looking at different countries in order to provide their service.
The main Jurisdictions of the World were places like Antigua and Costa Rica, which did not offer any credibility. Before the passing of the UIGEA in 2006, Europe was not seen as a lucrative market on its own. After the passing of the law, some countries went further underground to countries like Antigua and the Dominican Republic, where a company does not even have to declare its income. Others decided that they wanted everything above board and perfectly legitimate, thus they went to Europe. The three main Jurisdictions, in Europe at that time, were Gibraltar, Malta and Alderney in the Channel Islands.
Malta was not only physically in the European continent, but it was also in the European Union. This fact alone ensured that Malta was given serious considerations by companies at that time. There are other factors that have kept attracting new companies and retained the companies that were already in Malta. There have been Jurisdictions that have died off. For example Antigua has shrunk in number from around 300 to about 4. There is a very real possibility that a Jurisdiction loses all its attractiveness and loses its business. Malta’s EU membership is still attractive, even though it has lessened in importance, as other Member States are becoming Jurisdictions.
The Maltese licence allows clients from most countries from around the world. Some jurisdictions allow only clients from their own countries. A French license allows only French clients, and requires the input of a French Identification number and the Italian license allows only Italian clients and requires a valid Italian post code. Holders of a Maltese licence are not restricted and can target Chinese, Taiwanese, Australian and many other countries. The Far East is one of the main targets.
Gaming is being seen as high risk by a number of Payment Service Providers (PSPs) and acquirers. Thus even the Maltese licences, are not being accepted by everybody. This is not because it’s a Maltese licence but because certain service providers want to move out of gaming. For example, a large banking corporation does not accept gaming companies because of moral issues. This fact does not make business sense, but it is reality.
There are only a small percentage of clients who become addicted to gambling. Those types of people are usually prone to get addicted to something or other, as it is part of their nature, and thus cannot be totally avoided. The number of Maltese gamblers online is estimated to be quite a small number, but the number of younger Maltese people who gamble online is increase. As people play games on Facebook and other social sites, and become well versed in those games, they are more likely to play for real money.
Source: M. Azzopardi: A Study of Locality Choices by ICT and I-Gaming Companies in Malta, 2012.
Related vacancies:Analytics & BIdiscover Marketing & PR, Communicationdiscover Customer Supportdiscover Sales, Business Dev & AMdiscover IT Technologydiscover Reward Insight Team Lead | KindreddiscoverPoker & Bingo Marketing Team Lead | KindreddiscoverCustomer Service Team Manager - Belgium | KindreddiscoverGraphic Designer | SiGMA iGaming Maltadiscover(Senior) Sales Manager (m/f/d) | IDnowdiscover