The iGaming sector, like many industries across the globe, has seen COVID-19 shift the fundamentals it may have taken for granted, changing its revenue streams and altering its operations, despite its natural reliance on technology.

Yet, as the Junior Minister for Financial Services and Digital Economy, Clayton Bartolo, tells it, the industry is one of the economic pillars most resilient to the changes brought about by the pandemic.

In April, towards the beginning of the coronavirus crisis, the Malta Gaming Authority (MGA) conducted a survey among its licensed online operators to determine the repercussions felt by the industry as a result of the pandemic.

Released at the end of May, the survey revealed that the B2C division was hit hard, with the aggregate Gaming Revenue (GR) set to drop by 12 per cent by this December, driven by reductions in sports betting which was projected to decrease by 40 per cent.

Moreover, B2B licence holders could expect a 20 per cent loss in revenue over the course of the year. In addition, 66 per cent of firms – operating across B2B or B2C activities – were postponing investment plans, as land-based activities had been suspended completely through the Government’s months long National Health Emergency.

And, while there hasn’t yet been a more recent survey updating these results, the consensus amongst industry pundits is that the sector has been, and will continue to be, affected, though the extent to which this is the case may be difficult to fully ascertain.

Clayton Bartolo

Indeed, while today the economy has opened - with all its inherent risks – much uncertainty remains as virus numbers continue to rise, bringing unease and a sense that a tough winter lies ahead. Yet, according to the Junior Minister for Financial Services and Digital Economy, Clayton Bartolo, resilience characterises the iGaming industry, and he is confident the sector will weather the storm through its ability to adapt to the challenging circumstances.

“When sporting events were cancelled or postponed due to the pandemic, the sector started innovating and focusing more on products that could replace bets on live sport events, such as virtual sports,” he explains. “Nevertheless, the restrictions brought about by COVID-19 have still had an impact, due to the necessity for increased remote working and the rise in certain compliance costs, accompanying the growth in the need for monitoring responsible gambling.”

However, the Junior Minister continues to emphasise that iGaming’s reliance on technology and its take-up of sophisticated digital systems has meant it has been better placed than most to weather the storm.

“Government has been pleased to note that the industry is one of the economic pillars most resilient to the changes brought about by the pandemic, as the industry is forward-looking from an IT perspective, and, therefore, well-equipped to handle the required levels of remote working, for instance, that the pandemic has forced workplaces to implement.”

Despite this, remote working – as well as the decrease in travel – may have another unintended consequence: a drop in the number of job roles filled by staff willing to relocate, I point out.

This would impact upon Malta’s property sector, resulting in a drop in profits for one of Malta’s main economic sectors. Mr Bartolo does not seem overly concerned, however.

The number of vacancies in the iGaming sector in Malta is constantly substantial. However, the Government is aware that continuing to ensure a steady stream of talent available for employment in Malta is key to sustaining the ecosystem,” he explains, adding that, as a result, the authorities are continuously striving to implement incentives to satisfy human resource requirements. “This is always high on the agenda,” he underscores.

In the meantime, he also refers to the rise of other verticals and the increased focus on other revenue streams as an example of “how the industry continues to innovate and grow”.

Indeed, industry pundits and observers have seen live casino betting increase in popularity – replacing the physical experience – though Mr Bartolo believes it is still premature to establish whether this will continue in the long-term, saying that “when sport restarts, the pattern might revert back to the pre-pandemic situation.”

Yet, in the interim, and within the context of an escalating situation in Europe, will iGaming workers lose their jobs, I ask? I refer to comments made earlier in the year by iGEN chairman, Enrico Bradamante, who had said that “overall, the expectation of spend is down and expected to be less” and that “people will lose their jobs”.

In response, Mr Bartolo admits that it is reasonable to assume a decrease in entertainment spending, as disposable incomes become tighter. But he reiterates the authorities’ commitment to mitigate against any unemployment. “The Government is constantly keeping a finger on the pulse of the industry and monitoring its performance in order to determine whether action is required to avoid job losses in the sector,” he affirms.

And this is because the creation of jobs is also central to the overall sustainability of the sector, the Junior Minister says, underlining the need for the island’s educational capabilities to transfer skills to match the competencies required.

“The gaming industry is already based heavily on technology, and the resources required reflect that reality. Together with the Gaming Malta Foundation, the Government is working to bridge the gap between industry and Malta’s academic institutions, so as to ensure that the educational system equips students with the required skill sets to bring added value to prospective employers within the sector,” he explains.

Looking ahead, Mr Bartolo insists the Government will keep liaising with the sector, to ensure it has the resources and capabilities it needs to remain buoyant despite the difficulties.

“We have always kept an open channel of communication with the industry, and all the more so throughout these turbulent times. The current efforts to develop the Digital Strategy for Malta for the coming years will also take the effects of the pandemic into account. We are determined to ensure that the gaming and other digital sectors are supported in the best way possible,” he concludes.

This interview was first carried in the November edition of iGaming Capital

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Written By

Rebecca Anastasi

Rebecca is the editor of The Malta Business Observer and Business Agenda. She has interviewed stalwarts of the business community, and is interested in politics, current affairs and their effects on culture. On a parallel track, she is also a filmmaker, with over 16 years of industry experience. She loves food – though not necessarily cooking – and having passionate conversations about the latest film and book titles.