Malta gambling industry officials say they are relieved at the country’s removal from the Financial Action Task Force's (FATF) greylist this summer, but remain disappointed with the European Union giving online gambling its highest risk level.
“The grey cloud has been lifted; that’s very, very good from a reputational perspective,” said Enrico Bradamante, chair of iGEN, which represents online gambling companies in Malta.
The main impact had been on outside investment and flow of money in and out of Malta, said Bradamante, who is also managing director of Pariplay.
Motti Gil, chief financial officer of gambling software company Aspire Global, said the greylisting made cross-border transactions more expensive, but overall the impact of the listing was somewhat less than might have been expected, he said.
Gil and Bradamante were speaking last week at the SiGMA Europe conference in Malta.
In June, Europe’s other gambling hub, Gibraltar, was added to the FATF greylist as Malta was taken off.
Some analyses have found that economic impact on Malta was limited, with the primary effect a drag on the island’s reputation.
But Gil said he was disappointed that the European Commission had placed online gambling at its highest level of risk for money laundering and financial terrorism.
The commission called for lower thresholds than a current €2,000 for due diligence checks to help prevent criminal activity.
It cited “the non-face-to face element, [and] huge and complex volumes of transactions and financial flows”.
The potential use of e-money and virtual currencies, as well as the emergence of unlicensed online gambling sites, worsens the risk, the commission said.
Industry officials in Malta said they were disappointed that the commission did not recognise the volume of compliance efforts the online gambling industry had undertaken over the years, especially since 2019, the last such report.
“It is not 20 years ago, the industry is well aware of what it needs to focus on,” said Carl Brincat, chief executive of the Malta Gaming Authority (MGA).
Representatives said the industry needed to “educate” EU officials on how the industry has adapted to standards.
“We work in such a highly regulated industry, with so many controls,” said Yanica Sant, legal counsel with William Hill and a former MGA counsel. “Many other industries are much higher risk.”
A final debate was over cryptocurrency and whether online gambling companies should consider accepting it, given the current disarray in that industry.
The MGA is currently conducting a consultation on proposed policies on “innovative technology arrangements” and “acceptance of virtual financial assets and virtual tokens”.
Its “sandbox” licensing programme, which gave two companies authority to accept cryptocurrency, expires on December 31, to be replaced with a new regime in January. The consultation closes on December 14.
Betsson chief executive Pontus Lindwall said he thought online gambling companies could consider using cryptocurrency “even though the industry has experienced some headwinds”.
But Bradamante wondered if combining two areas the EU considers high risk — cryptocurrency and online gambling — would be viewed as “very high [risk] to the power of two”?
It could be considered “the most explosive combination, when it comes to risk management”, he said.
But, Bradamante said, “in Malta, we will be able to find a way of explaining that risk”.