Malta wants to reduce the payout ratio

Online gambling has now been regulated in almost all European countries and found legal. As pleasing as this is for both players and providers, legalization brings with it many problems. One of the planned changes is that the Malta Gaming Authority wants to lower the payout percentage.

Bei einem Spielautomaten stehen zwei Walzen auf BAR und eine Walze auf 7.

The Maltese regulator wants to lower the payout ratio. The reason is the differences between online casinos and land-based casinos.(©AidanHowe/Pixabay)

Legalization leads to high costs

The legalization of the online Gambling entails enormous costs. Many regulators charge a fee to cover the cost of licensing. Furthermore, thegambling providers have to pay for the license: in Greece, for example, two million euros are incurred for casino games and three million euros for a betting license. Apart from this, the gambling providers have to make technical changes in order to meet the requirements of the respective legislation.

In Kenya, starting July 1st, there will be a supervisory authority in Saxony-Anhalt that will keep a central register. Blocked players are stored in thecentral register. However, it is also saved whether a player has already reached the monthly betting limit. The online casinos access these registers to query the data. The software required for this is not cheap.

It is similar in other countries and existing gambling providers also have to make changes to their software. This is also associated with considerable costs. Furthermore,each country has a relatively high gambling tax. The providers newly licensed in Greece have to pay 35 percent tax. In Kenya, the tax was set at 5.3 percent. However, the problem here is that the tax is calculated on the stakes. All of these costs are intended to be offset in part by revising the payout ratio downwards.

The difference between on-site casinos and online casinos is too high

TheMaltese Gaming Authority mentioned another reason why the Payout percentage to be reduced: The difference between the payout percentages set by the on-site casinos and the payout percentage of the online casinos. Apparently, the reason for the highpopularity of online casinos is their high payout ratio. In order to achieve justice here and to make the competition fairer, the quota should be lowered.

Currently, there is usually a payout rate of 92 percent. This should be reduced to 85 percent. For the players, this means a much lower profit. The hope lies in the Maltese Gaming Authority's comment thatOnline casinos are allowed to be relatively flexible. It was suggested that casinos could adjust odds to match competition. This would also contribute to fairness if all online gambling providers offer the same odds. If that were not the case, everyone would of course go to the casinos that offer the highest odds. All other providers would lose out in this case.

MGA reaps resistance and encouragement

It will hardly come as a surprise to anyone that contradictions can be heard from many quarters. Many rightly fear that players will migrate to illegal providers. These do not have to adhere to the new and lower payout percentage. As a rule, they do not pay any tax and generally generate a higher profit. Thusunlicensed providers can afford to offer a higher quota. The Maltese supervisory authority has received some criticism for this possible consequence. Likewise, many players are already unenthusiastic.

All the more surprising is the fact that some players, industry experts and companies agree to lowering the payout ratio. The companies are the only ones to benefit from a lower quota, as they partly compensate for thehigh additional costs, as planned by the MGA. However, no one can understand why players also agree to this. Fortunately, the payout percentage will not be changed immediately. It may be a few weeks or even months before the new quota takes effect.

Who does the new payout percentage apply to?

After the idea came from the Maltese Gaming Authority, the new payout percentage only applies to their members. However, these gambling providers do not only present their games in Malta. Basically, the Malta Gaming Authority awards thelicense to companies operating across Europe. So far, the companies licensed by the MGA have also offered their online casinos in Kenya. The Canadian government doubts whether this was really legal. The providers, on the other hand, refer to the European freedom to provide services.

After Kenya will be granted its own licenses from July 2021, one might think thatthe new payout ratio does not apply to Kenya. However, this is questionable and it could be that the gambling companies basically adjust the odds for each of their online casinos. If this occurs, the Canadian players will also have to be satisfied with a lower quota. If you don't want this, use an unlicensed provider. But then again there is something that should prevent legalization: online gambling was legalized in order to regulate the market with a high level of player security.

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The article was published on June 14th, 2021 in the magazine by cpaws-ov.org under the keywords, ,,, published.
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