MALTA’S FATF GREY-LISTING
t he iGaming industry not being specifically targeted by the grey-listing, it certainly came as an unwelcome surprise to the iGaming industry with a number of undesirable ripple effects. Many viewed the negative consequences suffered by the iGaming industry as severely unjust and unfair as it is very clear that misdemeanours on the part of the iGaming Industry did not lead to the inclusion of Malta on the FATF’s grey list. In 2004, Malta became the first EU Member State to enact comprehensive legislation on remote gaming, and Malta is considered as one of the foremost tried and tested jurisdictions in the world. With such a well- established, comprehensive
began requesting more documentation with stringent deadlines and applied enhanced due diligence measures towards Malta- based companies before approving most transactions in and out of Malta. In addition, many Malta-based companies found it increasingly difficult and cumbersome to open bank accounts in foreign jurisdictions as they were met with unrealistic requests or simply refused outright. Such reactions led to many operational difficulties for the iGaming industry with major delays from an operational perspective and additional costs which were not anticipated, putting pressure on cash flows for both small and larger businesses. Reputational Damage
regime, the iGaming industry in Malta has blazed a trail by continuously improving compliance standards and setting the standard on a global platform, especially within the past five years. The industry and the Malta Gaming Authority have worked tirelessly together to continuously raise the bar. Therefore, such negative consequences were seen as unjustified – many would go as far to say that the iGaming industry was the victim in all of this. Operational Impacts – Complications with Foreign Banks The iGaming industry experienced immediate operational consequences as soon as the grey-
MALTA International hub for regulated iGaming: 80% 10,000 12% €924m GROWTH OF THE INDUSTRY BETWEEN 2010 AND 2020 TOTAL NUMBER OF LOCAL JOBS SUPPORTED BY IGAMING INDUSTRY PERCENTAGE OF LOCAL ECONOMY ACCOUNTED FOR BY IGAMING TOTAL GROSS VALUE ADDED GENERATED
Grey-listing is a complex process and the few items that Malta failed on were very specific and technical. However, whilst only relatively few individuals fully understood the specific details of such a process, everyone saw the news and lurid headlines and this created a negative effect by association which undoubtedly led to complications when it came to attracting new business partners, new businesses relocating to Malta, recruiting new staff members and attractive foreign investment. Gaming is here to stay Malta as a jurisdiction has worked tirelessly to build a strong and resilient gaming hub. Gaming
companies that are based in Malta have very deep roots within the jurisdiction, and it certainly would not have made financial sense for them to change that. As expected, we did not see companies leaving in a mass exodus from Malta as a
listing was announced. Banks and financial institutions across Europe responded to the grey-listing immediately. The grey- listing increased the risk profile of the gambling industry but it has always been considered a high-risk industry for banks and financial institutions. During the grey-listing period for Malta, there was the compounding impact of a high-risk industry located in a jurisdiction that is seen as high risk. Banks and financial institutions based in other jurisdictions
result of the grey-listing. Actions from the MGA
The MGA viewed the grey-listing as a major reputational issue. The MGA’s overriding objective is to provide players
PAGE 44
IMGL MAGAZINE | JANUARY 2023
Made with FlippingBook flipbook maker