SPEECH BY THE MINISTER OF FINANCE, THE HON JOHN DALLI, ON THE OCCASION OF THE OFFICIAL LAUNCH OF STANLEY LEISURE ELECTRONIC SPORTS BETTING BUSINESS IN MALTA - THE BUSINESS CENTRE FOYER, HILTON HOTEL

Ladies and Gentleman,

Government is working very hard to create as much economic expansion as possible. It is putting into effect what it is continuously preaching – that is, the generation of good quality jobs for our young people. As you know, we have recently passed through Parliament, legislation concerning e-commerce. We have done this not only to create jobs but also as a stimulus for our young to understand that by becoming more computer-knowledgeable they will be guaranteeing good jobs for themselves.

Electronic commerce presents enormous potential and opportunities not only for job creations but also for our consumers and businesses. We consider its expansion in our country as an urgent challenge for our commerce, industry and government, as this is a fast moving sector that will have considerable impact on our competitiveness in global markets. Driven by the Internet revolution, electronic commerce is dramatically expanding and undergoing radical changes.

Electronic commerce is engendering a wide range of innovative businesses, markets and trading communities – these will eventually create new functions and new revenue streams for our financial institutions. Electronic commerce encompasses a wide spectrum of activities such as retailing of goods and also provision of services such as hotel and airline bookings. Other services, such as medical and legal services are very new, while others such as betting, are making a rapid transition from an old way of doing business - the traditional betting shops to a new way of doing business - online betting. Internet gaming has taken off in the global market, as the Internet and web activity is quickly embraced world-wide.

Betting on the Internet has the potential to become one of the biggest markets in the near future. From a current market turnover of over 10 billion dollars the turnover is expected to rise to a total market of around 700 billion dollars by the year 2002 with Europe enjoying the greatest market share. This means that 1.5 % of the market will be online driven.

We have not been oblivious to the development of e-commerce and my Ministry has taken prudent steps to be part of this development. As an initial step we have established a competitive package coupled with strong regulation and compliance procedures for companies who wish to establish a betting operation in Malta.

This whole process started around a year ago and over the past twelve months we have not only been able to prepare the regulations and generate interest in companies to establish operations Malta, but we have also been able to process a considerable number of applications. It is therefore with pleasure that I welcome the opening of Stanley Leisure Trading (Malta) Ltd. Stanley Leisure was the first company to be granted a licence. We currently have 12 companies in receipt of a licence. I understand that the Gaming Board is considering another 12 applications and another 10 are in the due diligence phase. The number of new job opportunities to be created by these companies over the next two years is expected to be considerable for our country.

However, this rapid development in the space of almost one year since we started working on the regulations meant that we had to learn the requirements of this industry, particularly in the quality of our telecommunications and of our human resources. I am glad to see that Stanley Leisure is now operating successfully, and I thank them for patiently working with us to overcome all the initial teething problems. It was a very steep learning curve for both of us, but it will certainly help us to put the other companies in the right direction.

The e-commerce industry is dependent on telecommunications removing capacity bottlenecks and providing high bandwidth infrastructure is a challenge that we are facing if this new industry is to expand further in our country. We also have the problem of rather stiff tariffs compared to our major competitors, however, we expect that the implementation of the package of telecommunication liberalisation measures will lead to competitive schemes.

Ladies and Gentleman, what we are creating today are high value jobs compatible with our educational system in a clean environment for our working population. We must therefore all ensure that this industry will find adequate local human resources.

It is thus important that our young acquire information technology skills. This equally applies to workers in government and other industries where re-structuring is required. Furthermore, we in Government must also ensure that the regulators have the necessary manpower and human resources to regulate the industry. We have no intention of relaxing our regulations for the sake of creating a few extra jobs and some additional revenue. We have no intention of throwing away what we have been painstakingly creating, for we know, that betting companies are seeking to establish in Malta because they are looking for high standards of regulation.

Finally we, in Malta, can marshal a number of specific strengths in the field of technologies, content creation and linguistic and cultural diversity required. It is with these thoughts in mind that we endeavour, next year, to expand our e-commerce strategy into the field of electronic payments. We believe that this field of activity will also create additional revenue streams for developers of office space, telecommunication companies and other service providers.

I wish Stanley Leisure every success.