Gambling Operator Control System in Malta

If we look at the gambling sector in Malta, we will see that since 2018, a new regulation has been introduced with regard to AML control (Anti Money Laundering). According to recent official reports, the MGA (Malta Gaming Authority) has revoked/suspended 12 licenses in 2018 and 24 licenses in 2019. That is, the difference is 50%. These are quite impressive indicators to conclude that the new AML regulation did not affect the normal operation of Maltese gaming providers in the best way for them.

So, let's figure out who is behind it and why it is so hard to meet the new requirements of the regulator.

In Malta, there are two main bodies that provide financial compliance and tax control of gambling operators:

• The MGA (Malta Gaming Authority) is the main regulatory body responsible for managing all gambling activities in Malta, including both offline and online games. It has been working since 2001.
• The Financial Intelligence Analysis Unit (FIAU) is a government agency created under the Law on Preventing Money Laundering, which is responsible for collecting, processing, analyzing and disseminating information to combat money laundering and financing of terrorism. The FIAU also monitors compliance with relevant laws.

The compliance of gambling operators in Malta is a whole system that consists of the obligations of gambling operators in paying taxes, submitting reports, internal audits and regulatory oversight of compliance with the requirements.

So, consider the obligations of gambling operators.

Audit.

A gambling operator that is going to get a license must undergo a series of audits. Only after successful passing and testing by the regulator, you can get a license.

Reporting 

A person holding a license is required to submit monthly reports and pay fees, depending on the type of license:

1. License fees for each of the 4 types of B2C licenses. The interest rate of the fee depends on the turnover of the company;
2. Annual License Fee, according to the type of the license;
3. Administrative fees.

Reports are submitted within 180 days from the end of the financial year.

Management of accounts:

• Management reporting covering the first six months of the financial year of the company must be submitted before the end of the 8th month of its financial year.
• The industry performance report (Industry Performance Return (Return)) should be compiled by all licensees on a semi-annual basis, providing key data on various aspects of the business (company revenue, opened customer accounts, closed customer accounts, operator policies, etc.) The Return should be presented in the correct, complete and accurate form through the Licensee Relationship Management System - LRMS. The Return must be submitted 6 months at the request of the regulator.

Monthly reports:

• Gambling Tax Report;
• Player Funds Report.

Money laundering and the funding of terrorism:

The Financial Intelligence Analysis Unit (FIAU) developed the Prevention of money laundering and funding of terrorism Regulations (PMLFTR) in 2018. The rules oblige gambling operators to introduce higher levels of customer due diligence based on risk analysis and impose strict sanctions in case of non-compliance.

The rules consist of two parts that describe the types of gambling business, the type of services provided, a classifier for classifying a company as a certain risk category, indicate possible financial transactions and charging options (money receiving and sending) from a gambling operator (types of payment cards, bank payment systems, cash) and so on. These rules set limits on transactions, as well as the rules for due diligence of customers.

Control of tax liabilities.

Accounts can only be opened in countries of the European Community (EEA) that exchange tax information with Malta tax authorities in an automatic mode.

Any person found guilty of violating financial obligations or paying fees and taxes is liable to a fine of 10,000 to 500,000 euros or imprisonment for up to five years, or both.

System of online monitoring.

On December 10, 2019, the MGA finally adopted the Enhanced Automated Reporting Platform (Land-Based) Directive. The directive applies to land-based casinos. The creation of an expanded ground platform for automated reporting is envisaged.

An advanced automated reporting platform is a tool that will allow MGA to receive standardized data on a daily basis from offline casinos and controlled gaming rooms. MGA will receive direct and immediate access to gambling data, and will also be able to receive real-time alerts for a timely response.

Testing of this program will continue until November 30, 2020, and regulatory authorities will assist land-based gambling providers in connecting to the system and testing its operation.

As you can see, the world centers of gambling business tighten their control policies and oblige gambling operators to play by the rules, which is confirmed in the official reports of the Regulator, where you can see the number of revoked licenses, the number of companies which have not received a license for the last year, number of checks performed.

This cleaning leads to the fact that the gambling business reaches a new level of legality and cleanliness in doing business and compliance with the law.